May 08 2012

Making Money Behave! Use Your Computer for Better Cash Management Skills

Making Money Behave!


There’s a saying that “You can’t improve, what you don’t measure”. Before setting up a budget or deciding what spending areas to change, you need to get an accurate picture where your money goes. Forget pen and paper, that’s too time consuming and messy.

I recommended either Intuit’s Quicken, Microsoft’s Money or Quickbooks because most banks allow you to download your transactions directly into these software packages.

I’ve used different versions of Quicken for nearly 10 years and as a business owner, you must track spending anyhow, so this type of program has been a good choice.  You can go with the full blown version but if you just want to track your finances (not your portfolio or home inventory), keep it simple and use Quicken Cash Manager version. It costs about $50.

Once the program is installed, add your online bank account(s) and download transactions. Again, keep it simple, download only the last full month.

Here are some other set-up tips.

  • The first month is a bit painful because you do need to set-up “categories” such as “groceries” or “gas” and payees such as “No Frills” or “Sunoco” but each successive month gets easier because you can “memorize”  transactions and payees. For example, if you memorize “Sunoco” as a payee and “gas” as the category, the next time you have a transaction with “Sunoco”, it remembers it’s for “gas” and all you have to do is verify the dollar amount is correct.

  • Use the “split” feature for stores like Walmart. The “split” allows you to allocate the bill into multiple categories such as “groceries” and “clothing’.

  • Do you do a lot of ATM Cash withdrawals? If so, you’ll need to keep track where you spend that cash manually and set-up a “cash account” for tracking.

  • If you write checks, the program will show the check number but you’ll have to pick the category that the purchase applies to.

  • I recommend updating the program once a month. Simply pull out all your receipts,update the program by downloading the online transactions and do a “reconciliation” of your account. This is the same as balancing your checkbook.

  • The key is not to over-categorize your transactions.  Don’t break your grocery bill down into steak, bread and apples just have a category called groceries.


Finally after a couple of months, you can start running “Reports” and get a real handle on your finances. Making your money behave is the first step in getting your financial management house in order. It’s not hard but does take commitment on your part.

Best of luck.

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