Quicken Software Tips

What is Quicken and why should I use it?

Quicken is a brand of personal finance software that allows you to track your expenses and assists in the budgeting process. As many of you know, it can be hard to create a budget and even harder to stick to it.

The key to sticking to your planning is continuous monitoring. To do so, we generally recommend using software like Quicken that is designed specifically for expense tracking. Quicken allows you to easily download data from your bank account and other financial institutions that you use. Once downloaded, you can categorize each individual transaction so that you can create an accurate picture of where your money goes.

How many categories should I use and what are they?

Some common problems we see are trying to over-categorize and coding a large amount of regular expenses as one time occurrences. Simplification should be emphasized when creating your budget and categorizing each transaction. We recommend using the following categories:

• Clothing
• Communication (Phone, TV, Internet)
• Discretionary (Cash, Travel, Fun, Church/Charity Contributions)
• Food (Dining Out, Alcohol, Groceries)
• Debts (Mortgage, Equity Line, Car Payments, Credit Card or Student Loan Payments)
• Education (Books, Private School, College Tuition)
• Health & Hygiene (Gym Membership, Doctor Visits, Prescriptions)
• Household (Maintenance, Home Improvements)
• Investments (Roth/IRA Contributions)
• Risk Management & Financial Services (Bank Charges, Insurance)
• Taxes
• Transportation (Gas, Repairs, Car Insurance)

From these basic categories, you can create future sub-categories, but it is important to keep the bigger picture in mind when monitoring your expenses.

Should I be trying to hit the same number every month?

Comparing expenses on a monthly basis can be another source of frustration as there are many fluctuations that occur throughout the year (Holidays, Summer Vacation, etc.). Therefore, it is important to measure your progress against a rolling year period. For example: You’ve just finished January, so you will want to measure Feb 1st of last year to Jan 31st of this year against the calendar year amount of your budget. If the amount is more, then you know you are a little ahead of pace and you should scale back. Performing this exercise monthly can greatly improve your overall financial picture as it allows you to have greater control over your regular expenditures.