banking

Are Traditional, Low-Tech Ways of Handling Your Finances Better than Modern Ways?

Electronic banking, ATM and credit cards, leasing, online shopping, installment plans and subscriptions, and anything else electronic is the way to handle your personal finances nowadays, but is this better? In some ways yes, but many ways not so much.

Transactions are too easy to make nowadays, which causes us to be more impulsive. It’s not just Amazon that makes it easy to purchase products, but even your local grocery store has online capabilities to place orders at 3:00 AM. The problem with this approach is that you do not feel, either physically or mentally, that you are making purchases, especially when using ATM and credit cards, which in turn, makes you spend more money. Traditional ways required more effort to both purchase items and to pay for them.

In the past, you had to wait until you received your bank statement in the mail to see what your bank balance was. Because of this, you were forced to record each transaction that you made in a paper check register to know what your real balance was. Most likely, you actually reconciled your checkbook to your bank statements on a monthly basis. Ironically, since it is now so easy to check balances and transfer funds, most people tend to pay less attention to the details.

Almost everything can be purchased or rented with small or no down payments and monthly payments. You can finance your iPhone and also that cute little puppy. You  can also cut your cable service to save money, but use 23 different, $9.99/month services and spend more money. It might seem minor, but it really doesn’t make sense.

Please let me know if you still save up to make substantial purchases. Substantial is relative to your situation, but most likely you will take out a loan or use a credit card. Tell your friends and family that you paid cash for your car and they will ask a lot of questions to determine your mental health. Today’s mentality is that if you want something then you should have it immediately. The tactic of delaying purchases is very effective if you want to have strong finances.

I don’t think that we need to go back to the way things were not too long ago, but we should consider combining the best of traditional ways and modern ways. Automatic savings is a perfect example of combining the new with the old. Can you think of others?

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Do You Use QuickBooks? You Should Be Doing This!

QuickBooks is a very popular accounting software program for small businesses, and I use it personally for my practice as well. But, if you are using QuickBooks, there is one key step you should be taking – reconcile your bank and credit card accounts!

Why? When you reconcile your accounts, it helps to make sure that the data you entered is accurate. Everyone makes mistakes when they enter data, even when they upload data (uploaded data has a tendency to duplicate transactions when you have transactions between multiple accounts). This is okay, as long as you catch your mistakes by reconciling to your bank and credit card statements.

Reconciling your accounts will not only help you to make sure bank accounts are accurate, but it will also help you to make sure that your receivables from customers and payables to vendors are more accurate as well.

Fortunately, this is not a difficult task to do. If you have never reconciled before, it may take some work to get the first month’s reconciliation taken care of, but after that, the task become easier.

We offer ongoing QuickBooks support to assist clients with their books to insure they are getting the most from QuickBooks. Do you need help?