tracking your finances

blue.peter

carolinerunner wrote: »

You've all got me thinking there... is that the point of my planning? Actually I'd find it quite hard to say what the point of it is, apart from feeling more comfortable when I know I'm in financial control and I can deal with most situations which might arise.

The point of financial planning is to help you achieve your financial goals, whatever those goals are. They can change over time - I know that mine have evolved. Circumstances change, and plans change with them. Sure, funding for retirement is a common one, and a very important one for many people. However, it is far from being the only one. It doesn't even figure into my thinking now that I have retired. That's a goal that I achieved, and can now forget.

Over time, goals might include:
- getting out of debt;
- buying a house;
- getting children through school/university;
- funding for a comfortable retirement;
- having sufficient money to pay care home fees, if they're required in old age;
- building an inheritance for children/grandchildren/whoever.

I'm sure that there are others that I haven't thought of: my list isn't intended to be exhaustive. And more than one can apply at the same time. Sometimes goals conflict with one another, and have to be prioritised.

So what are your own goals? "Know[ing] I'm in financial control and I can deal with most situations which might arise" is a worthy goal, and you'll get no stick from me if that's all you care about. But is it all? Do you have longer-term objectives? Only you can answer those questions. (And, for the avoidance of doubt, I'm not expecting you to answer here unless you want to.)

Herbyme

blue peter, thank you, I'm now thinking!

blue.peter

carolinerunner wrote: »

blue peter, thank you, I'm now thinking!

Good - that's exactly what I intended!

getmore4less

carolinerunner wrote: »

You've all got me thinking there... is that the point of my planning? Actually I'd find it quite hard to say what the point of it is, apart from feeling more comfortable when I know I'm in financial control and I can deal with most situations which might arise.

An essential feature of control is knowing where your money is going so you can prioritise any changes you want to make.

enthusiasticsaver

Financial planning is something we always did to calculate savings goals, when to retire, when to invest over and above our pensions etc. I do it over a calendar year rather than tax year as we are both Paye so do not need to submit tax returns. If we did I would probably calculate income and expenditure to the tax year instead. Our investments are all in SIPPs and ISAs and tax affairs simple at the moment.

blue.peter

enthusiasticsaver wrote: »

[W]e are both Paye so do not need to submit tax returns.

I hate to break it to you, but this isn't always the case. You shouldn't assume that HMRC will never want a tax return from you.

I was always taxed entirely under PAYE. However, I was still required to submit tax returns. Admittedly, this only happened twice over the course of my working life. However, I was also required to provide certain information, calculated on a tax year basis, (mostly about my pension contributions) to the Inland Revenue/HMRC for, if memory serves, every tax year from about 2000 until I ceased work in 2015. In effect, this was a sort of short tax return. They also habitually got my taxable benefits in kind wrong, with the result that they overtaxed me. This one was relatively easy, because my employer gave me the necessary form P11D.

Jami74

I switched from calendar year to 01st April to 31st March a couple of years back when I first had to do self assessment. Those few days at the beginning of April annoy me a bit but I do calendar month stuff and couldn't cope with shorter Aprils/longer Marchs, or starting each month a few days in.

MDMD wrote: »

One complication I have is I use the accrual method of recording expenses (so if I use a 0% CC I record the cost as “spent” even though the cash may not leave the bank for weeks, months or even years).

Me too! I record every spend as I go, even if it's on CC, but also keep a running balance so I always know exactly how many pennies I would have left over if I paid everything owed at that moment in time. The numbers don't match and it's driving me crazy. I'm thinking of opening another account and transferring every single credit card spend to it straight away so the positive balance equals the credit card balance. It'll effectively return my credit spending to debit spending without losing the benefits of paying by cc.

LobsterMemory

Do you have to be right to the penny every day?

I have that setup but chuck #700 into the savings account at the beginning of the month and then top it up if needs be once a week.

Jami74

LobsterMemory wrote: »

Do you have to be right to the penny every day?

:eek:

You mean...I don't?

I'm fairly new to regularly having a positive net, positive balance and savings. Maybe the novelty will wear off and then I won't mind so much.

blue.peter

Jami74, what do you use to record your income and expenditure? I operate a similar system to you, recording everything in AceMoney. This gives me the correct figures for each account and a running overall balance.

Accounts are categorised separately, with a total for each category as well. The categories that I use are bank accounts, credit cards, loan accounts and savings accounts, but you can define your own. Operating this way means that everything matches and balances. It shows negative figures for the credit cards and positive ones for everything else. (The loan account is postive because it represents money that I've lent to a family member rather than money that I've borrowed.)

The Accounts page shows a list of accounts with the current balance for each, a total for each category and an overall total. Clicking on any account here takes you to a list of transactions for that account. There's also a Schedule page where future transactions - single or recurring - can be input. Future transactions are visible, but greyed, on the relevant account page for a user-defined period. I set this to one month ahead.

If I remember rightly, AceMoney can be trialled without payment on a version limited to two accounts(?). Other users here favour MS Money - which is free - but I don't have any experience of it and so can't comment on it. It might be worth your while investigating this.