I’ve never been very good at managing my finances. There was a period of time back in college when I lived off my credit cards. Fortunately over the last few years I’ve gotten better at living within my means and have been gradually paying off my debt. Despite this I’m not exactly what you would describe as financially responsible. I just switched to using my debit card for things and I keep an eye on my available balance on my banks website. I’ve known for a while (and to the urging of my financial planner) that I really need to put together a budget and start saving money.
In the past I’ve tried Quicken and wasn’t too happy with it, I personally preferred Microsoft Money but even then I wasn’t happy with the way Money handled budgeting. Consequently I never really used either one and continued to live paycheck to paycheck. After getting an e-mail from Quicken the other day advertising a 50% off sale on Quicken Deluxe (normally $60) I decided it wouldn’t hurt for me to give it another shot.
Last night I bought my copy, got it syncing with my bank and credit cards and made sure transactions were categorized correctly. I have to say that Quicken has improved a lot since the last time I used it. Today I spent some time digging into it a little more, got my reoccurring bills set up and started to look into the “planning” section of the application.
The way the budgeting/planning section of Quicken 2010 works is once you have your reoccurring income and expenses in the system you can choose any number of categories to “watch” like dining, entertainment or groceries. When you watch a category you specify how much money you want to allocate to the category each month and as you spend money a little green bar moves across the screen showing how much of your allocation you’ve spent and how much is left. It also has a larger bar across the top of the screen that represents your expected income for the month and it breaks it down into three sections “Scheduled Bills”, “Categorized Spending” and “Left Over”. That way you can see right away how much money you actually have to spend as opposed to how much is in your bank account.
Then just now, I noticed a feature that made me so happy because it’s the feature I’ve been missing from these sorts of programs. Quicken calls it “Rollover Reserve” and basically that means that if you don’t spend your allocated amount that month, the remainder goes into the reserve so you can spend it in the future or reallocate it to other categories. This for me is a killer feature. If I allocate $200 to entertainment every month I should be able to hold back and not spend the full $200 for a few months in order to save up for bigger purchases like an Xbox 360.
UPDATE: I’m no longer using Quicken to manage my finances. Instead I found this awesome app that I love and wrote about in
my post My YNAB Budget