My father and father-in-law were at both ends of the spectrum when it came to managing their check accounts. Dad would spend hours, sometimes days, tracking a two-percent error in his checkbook register. It drove him bonkers when his checkbook did not balance against the penny with the bank statement.
My father-in-law, on the other hand, did not even keep a checkbook register. He could not care about balancing his account. His philosophy was, If I run out of money, the bank will let me know. Its a hands-off strategy that some of us can get away with, but it worked for a person who was born and lived in a city of less than 800 people. The bank actually knew my father-in-law when he was transferred. They have never, in my knowledge, charged him with overheads.
That approach can work in a small town in northern Idaho. However, most of us do not have that kind of relationship with our bank. In order for our personal finances to work smoothly, it is our responsibility to make lifestyle choices and to work on managing our daily economy. How we handle our checkout and credit card transactions are fundamental to keeping things well.
My approach is somewhere in the middle
My approach to managing our family checkbook register is somewhere between the two parent strings mentioned above. My wife, Lois, and I register all transactions in our register, and like clockwork, I balance my account every month. What I do not do is spend an unnecessary time trying to find fault when our account does not balance with the statement. If the error is within comfortable limits, I adjust my account balance and continue with my life.
What is a comfortable limit? It depends on your account balance. My wrong tolerance is directly proportional to how much money we have at hand when the error occurs. Balance errors do not happen so often. Often our checkbook is not balanced. Accuracy can be attributed to the fact that I use personal finance programs.
The point is that personal finance requires some work, but perfection may not be desirable. There are many involved in processing the various transactions that we all generate as part of our money. The millions of millions of transactions, big and small, are all subject to our own human error as well as the human errors that can be committed by all the people behind the scenes we rarely think about.
Thats why we keep tabs on the pulse of our personal finances that are recorded in our check and credit card accounts. This ongoing monitoring can be psychotic or a normal, healthy part of our lives. It is up to each of us to decide where we face this issue. Will we adopt a frenzy like one of my parents? Or will we keep it clean and simple K.I.S.S.?
Using tools determines lifestyle choices
Using a Cash Flow Tool forces you to make choices by specifying the lifestyle features required if the tool is to work as intended. It may sound scary, but for a well-written, user-friendly program, the necessary lifestyle moves are not an unreasonable burden. For those of us who are genuinely interested in having more money than a month instead of more month than money, we are developing a few, maybe not new habits need to be a tough adaptation. The repayment in economic sense of mind is well worth it.
Choice we do regardless
Lets first look at the habits that will make your financial life easier regardless of whether you use employee finance programs or not.
I think its very important that from today you keep a receipt from all your transactions for no other reason than unifying your monthly credit card statement. If you use appropriate personal finance programs, transactions will be charged as soon as possible. The program comes with correct information about charging to keep you informed of where you stand on your charging.