Saturday, August 6, 2016
A valuable financial lesson learned
I'm in the process of updating our financial records. In the process, I'm getting very fed up with various flavors of accounting software. Most of the supposedly 'secure' online financial record-keeping software has proved, under rigorous testing, to be penetrable by hackers; so I've decided to keep all our data locally rather than in the 'cloud'. However, most of the software available today insists on working online, and is very reluctant to let you do things only locally. As a result, I've gone back to an old edition of Microsoft Money (which I used for many years, but it's long out of production). To my pleasure, I find it's still more than adequate for my needs, even while simultaneously managing over a dozen different bank and other accounts. (You can download a free, unsupported version of Money from Microsoft at this link, if you're interested. Try it. You might be surprised at how useful it is.)
I've noticed that there's a hidden danger in using heavily automated online services. They'll link to all your bank accounts automatically, download the latest transactions, and update your records accordingly - all very convenient, to be sure. However, because you aren't scrutinizing every single transaction, it's too easy for you to simply skim over them, confirm that your records agree with your bank statements, and then leave matters as they stand. You don't pay attention to detail, because you never have to!
By entering each transaction manually, as the older version of Money forces me to do, I find I'm forced to concentrate harder. It becomes second nature to check each transaction against a statement and/or a checkbook and/or my bank's Web site (often more than one of them), so that I never skim over anything. If something seems out of place, it's immediately visible - it doesn't linger, hidden in the background, to catch me unawares in the future. Already I've found five or six transactions that I couldn't identify to my satisfaction; so I've dug out old checkbooks, and checked records online, and dug deeper until I could reconcile each one. (Two are going to the bank for further investigation.)
Doing it this way is time-consuming, inconvenient, and sometimes frustrating . . . but it's also making me a whole lot more aware of our financial 'big picture'. Despite the drawbacks, there's a lot to be said for doing the nitty-gritty detail work yourself, instead of trusting automated services to do it all for you. I suspect Dave Ramsey would approve.
Just my $0.02 worth. YMMV, and all that sort of thing.