Keeping a Financial Journal

Often I am approached by friends, colleagues, and relatives for suggestions on how to achieve numerous financial goals. Whether it be getting out of debt, planning for retirement, saving for a vacation or a new 60" plasma my first response is always the same: What is your current financial picture? The most frequent answer - Um, I'm not sure.

So many of us have very little knowledge of our financial picture. A picture is more than just a general awareness of what we can expect from the next 6-12 months relative to our income and bills. It is a clearly documented history of where we are now, what has occured in the past, and especially what is expected in the future. Most live in the moment and have yet to muster the discipline necessary to plan ahead financially.

There are many tools available to start making any financial decision stress-free, and any computer owner probably already has a form of money tracking software. I highly recommend Microsoft Money for individuals, couples and families interested in getting a firm handle on their entire bouquet of accounts, or for any beginner with 1 or 2 open accounts. My sister even has a seperate file for her 6-year old daughter to track college saving plans.

Microsoft Money 2007 is currently offered as a free 90-day trial at http://www.microsoft.com/money/freetrial_info.mspx Thereafter the Deluxe version is available for $30 after a $20 mail-in rebate. For those doing a lot of investing, splurge for the Premium edition ($50 after $30 mail-in rebate).



It's great for tracking all of your regular bills, adding one-time expenses, forecasting on-hand cash flow over time, interfacing with online accounts, forecasting next year's taxes, etc. It even has a debt reduction planner, a life planner, and an extensive list of reports to keep you well informed of you spending habits and other trends.

For small business I would recommend Quickbooks by Intuit http://www.intuit.com/ as that is the industry standard for most accountants and CPA's - whom you can expect to service your tax reporting needs throughtout the year.

Regardless of what financial goals you are interested in, a solid 'snapshot' of your status is required to make intelligent, appropriate, and safe choices. Remember that acquiring the software is just the first part. Regular use, input, and account reconcilation is key to accurate records. Set aside an hour once a week, or a couple every month to keep up to date. You'll find that knowing where you stand brings comfort, security, and will enable you to confidently make important choices about your future.