Home audit or how to start accounting finances

In this article I will talk about my experience in financial accounting and what has changed in my life with its appearance.

Decision-making

In 2010, when changing the city of residence, I decided to start accounting for my cash expenses. I did not keep the checks from the stores or write down my expenses in a notebook, I wanted to store the data in electronic form. At that time, the phones were still push-button, mobile applications have not yet had such popularity as they are now. After surfing the Internet, I was surprised to find that the choice of programs for conducting finances is not so great, and I could not find a suitable program for myself, so I decided to write my own. At first, I considered only expenses, then I began to record incomes, then there was an account of debts, holidays, business trips.

Where to begin?

1. It is necessary to determine the goal.
   Decide what you need financial accounting for? Understand where the money goes, become more financially literate, optimize your expenses, save for a car / apartment or something else.
2. Create multiple accounts in the program.
   Add to the program all your cash accounts (wallets): cash, bank cards, credit cards, deposits, e-wallets, and more. When accounting for income and expenses, specify which account it relates to.
3. Types of income / expenses.
   It is necessary to determine the types of income and types of expenses. There is no need to spare time, you need to think in details about the types of income and expenses that are relevant for you. I do not recommend using standard views that offer existing programs. If it is interesting, I will write what types of income / expenses I used at the beginning of financial accounting and what I use now.
4. Family accounting.
   If you have a husband or wife, it is desirable that both of you keep records of finances. But if your significant other is categorically against it, then you should not strongly insist and bring to quarrels. In one article read that it is ideal to keep records in one program for rallying the family. I believe that this is not so important, from my own experience I will say that my wife and I kept records of finances separately. The program was the same, but each had different accounts, types of income and expenses. I created an expense in the program, transferred money to my wife, my wife created income in the program. I note that his wife enthusiastically reacted to the idea of ​​financial accounting.

We start to enter data

1. Everyday.
   Try to spend 2-3 minutes every day to add income and expenses to the program. If there is a transfer of funds between accounts (for example, they have withdrawn money from an ATM), make a transfer between accounts. Do not save the unlisted data, otherwise there will be a chance to forget something. In my experience, I note that it is desirable to pay in cash as little as possible, because it is always easier to enter data from an Internet bank statement, the probability of error is minimized. Do not discard checks until the data is entered into the program. If it is not possible to enter data for several days, write it in an electronic notebook. Alternatively, you can carry a program to account for finance with a flash drive.
2. Reservation.
   Be sure to periodically make backup copies of the database. If possible, configure automatic backup. I specifically set up in the program so that before each launch, first a backup copy of the latest version of the database was created.
3. Password.
   If you need to hide your finances from prying eyes, set a password for the program.

What you need to analyze

1. During the period.
   Analyze the total values ​​of your income and expenses by week / month / year.
2. By types.
   Analyze income and expenses by type. What type of expenses is the most costly and how much interest does it take from total expenses. From my own experience and on the recommendations of specialists, I will say that housing expenses (mortgage, rental housing, utility bills) should not exceed 30% of monthly expenses.
3. By bills.
   Analyze as a percentage your income and expenses in the context of accounts.
4. Balance.
   Analyze daily changes in your balance ( all income minus all expenses for a particular day). Such information for a long period of time will make it clear in what month you were aground, and in what month you managed to earn extra money. In my program, I made it possible to look at the balance chart for each account.

What gives financial accounting

1. Where does the money go?
   Allows you to immediately see where and in what quantities money is spent. Try to keep records at least a month and, I assure you, you will be very surprised when you analyze the data.
2. Balance is always in sight.
   You can always see the available balance on each account and see the total balance.
   From my own experience I will say that there were cases when I discovered in time that my salary was not enough for a month, the accountant was mistaken in counting the number of hours worked. There was a case when I immediately noticed that when making a loan, they wrote off additional money, and this turned out to be insurance.
3. Disciplines.

A few rules for reasonable savings

1. Avoid impulsive purchases.
   Ideally, in principle, unplanned purchases should be kept to a minimum. Try with every unplanned purchase, especially if it is quite expensive, ask yourself the question: " Do I really need this? ".
2. Do not always buy in one place.
   Try to buy in different stores, compare prices, buy some of the goods via the Internet.
3. Plan your vacation in advance.
4. Always plan your expenses.

Finally

Having recently reviewed the popular finance accounting software for desktop computers today, I never saw a decent option. I was surprised that the programs that I considered in 2010 remained in the same form. Some of the applications were extremely slow, some of them were very difficult to master, one application generally crashed with errors. Still Steve Jobs spoke about mobile devices:

The program must be intuitive, in any menu you can get with a minimum number of clicks.

I spent a lot of time optimizing and speeding up my program.

I note that there were software products with bookkeeping on the Internet through the browser, there were types of expenses in Internet banks. Most pleased with mobile applications, there is a very large selection, a convenient beautiful interface, there are free versions. But in the modern world, phones do not live long and the data entered is easy to lose, so I still trust the desktop version more, otherwise I could hardly have collected data in 7.5 years.