When I first started using Quicken, I was doing pretty simple stuff — mostly just balancing my checkbook and planning upcoming expenses. Of course, back then my biggest expenses were gas, pizza and movies, so it wasn’t too challenging to keep track of everything.
Twenty years later, though, and I’m still using home accounting software like a teenager. Today I use iBank, since Quicken has all but abandoned the Mac. And though my finances have gotten more complicated with multiple credit cards, a mortgage, investments, assets and more, my difficulties using the software remain unchanged.
For example, when I make my mortgage payment, I try to split the transaction to account for escrow, interest and the principal. But I never know how to allocate the funds until I get my statement a month later. That means I have to guess and then go back and fix the data at a later time.
That wouldn’t be a problem, except I have to the same thing for multiple bills and I can’t keep up.
I also fail to adequately make proper tax associations, split up my paycheck, track interest, categorize properly and more.
I’d love to know the best practices others have for their home accounting. What do you do? What have you learned? What pitfalls should I avoid?
Of course, there’s a simple answer to all of this: get rich and pay off all my debts. Then again, keeping track of investments is no easier.