Reduce Debt Increase Wealth

Tracking Revisited

November 26, 2023 MIsterchuck Season 4 Episode 193
Reduce Debt Increase Wealth
Tracking Revisited
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Show Notes Transcript

Tracking for six months or longer and sometime may make mistakes in posting. What to look out for in the app. Setting up recurring posts and fixing older posts. 

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Charles McDonald:

Hello, I'm your host, Mr. Chuck, I retired accountant turned truck driver, I reduce my debt in a relatively short period of time, debt reduction, to achieve financial freedom takes commitment, confidence, determination, tracking revisited, tracking for six months or longer and sometimes may make mistakes and posting what to look out for in the app setting up a reoccurring post and fixing older posts. So you've been tracking for a while, or maybe he just started and you got 45 days. And because you're just getting started, you want back the previous month, put all that in, got yourself up to date, and he might have somewhere around 45 days, or maybe you've been doing it for a while not paying attention. Maybe you haven't set up any reoccurring entries that have do it for you, or will help you do it quicker. So what do you need to look for? Well, the important thing you must realize is consistency. Whenever you're posting to your app, for your tracking purposes, you must be consistent and get your same expenses into the same categories every time. So when you pay your utility bills, make sure they go into the correct utilities, you got natural gas, electric, phone, water, sewer, whatever you utilities gotta make sure that when you pay that bill is getting posted into the correct category. The other thing you must watch out for is do not post directly to the master account. And your categories. What is the master account, the master account is basically the heading account. So if you set up housing, for instance, and what I've done is put housing like a dash one, so that it's an alphabetical order, when I print out my categories list, so it matches my control center. So it comes out close every month to the same. So it's this a printed out and plugged the numbers, it's in a close enough order, I don't have to pay real close attention. I do that pay attention. But it's quick and easy. I'm not jumping out all over the place when I'm doing my control center. So you do not post directly to your master account or the heading account. But sometimes you might do it by mistake, I do it. You want to post directly into the category. Now when I set up housing I have housing is my master, then I have home furnishing home insurance, no. And that's put in any order you want. Home Insurance, real estate taxes, and then I have utilities as a sub account under the master. But then I have each individual utility company set up as a sub account under the utilities. So I don't post directly to housing, and I don't post directly to utilities. So that's easy to remember. But sometimes mistakes can happen. So how do you find a mistake? Well, I just done it I wanted to the app I use, there's a couple always things to look for instead of just scrolling down through all your transaction law under the category and looking for a heading account posted to that individual item. That's one way. Another way is to do a report by transaction and this scroll down and look at the name of the category. If it pops up now it's easy for me because I got a one b two B, you know, I got those A's and B numbers in there to put it in order. So I just scroll down through the report. If I see an a one or a b two or a C three or whatever, I know it got posted to the wrong account. It got posted to the main heading category or the master account. I just write down the date, the dollar amount and I looked to see which account it was As whether in my checking, was it in a credit card was it in a savings, and then I identified it, I can then go to that particular individual transaction, wherever it may be, and then do an edit and fix the category. And the reason you want to do it and may not throw off the totals of that particular category, but it could throw off the detail within that category. So for instance, if you would post your mortgage payment to the housing heading category, instead of mortgage payment, yes, the total amount for the everything added together would be correct. But if you would look at the detail, your mortgage payment won't show up. But the total, you know what I'm saying you would have a zero under that mortgage payment. So it's a got posted the generally the correct area, but it didn't get posted to the correct individual category that you've been using for this particular instance. So it's important to do that. Sometimes if you're doing your control center, and might be a glaring mistake, that jumps out at you, and you can go fix it right away. Sometimes they're kind of subtle, and you don't notice them for like bank fees $1 $76.26. That's what I just found, it was posted to the heading account. And it was months old. I never noticed it. But I did report I saw it, I fixed it. So it's a never ending process. Consistency is key. And in order to be accurate on your control center and have better control. You need to be consistent and accurate on your posting of your transactions and your tracking software. Another problem or way you might be able to find it it well, I'd set mentioned reports you can do budget reports where you're comparing one month to the next, if something is blaring way off, maybe or gasoline for the month for the current month is weighed low. And you know, well, I just filled up, you know, last two weeks, and it was $100 each, but yet it's only shown zero. Well, that means you might oppose that transaction to the wrong category all together. Maybe your categories are off, maybe your bank checking reconciles out to the penny, he just got it into the wrong category. So maybe your gasoline is way low. But another category is way high. Maybe it's something you don't notice. So you know, well, I know I want to this gas station. So look through your transactions and find and see where it got posted to and fix that. Fix it another way. It's something like that should kind of jump out at you after a period of time. Once you familiar with everything going on in your finances, you have a general idea what has happened in the last couple of weeks, you know that every time you go and fill up your cars, it's $75 or$95, or whatever the case would be. So you have a general idea of what numbers to look for. But they're not there. That means that one you did post it maybe or you hadn't entered it yet. That's another consideration. So if you've entered it, then maybe it got into the wrong category. And if it stays in the wrong category, it gets throw off your control center, it can throw off your reports down the line because you're not being consistent. One way to help you avoid these type of mistakes is to set up a re occurring entry. reoccurring entries are those that you pay every month no matter what the simple ones would be all your loan payments that stay the same every month, your mortgage, your car payments, your credit cards can change but you could set up the minimum bounce whatever it is today. And then maybe go back in a few months and make it zero if you paid it off or reduce it down as the bounce comes down. So it's occasionally you might have to update Add a bit, it's not anything that would be very time consuming. If you don't update it and every time you post it you got, you're gonna have to change some of these reoccurring entries, the dollar amount and the date anyway, so but it's like quicker than enter and everything, the you won't have to put in description you just changed the day to category should be there. If you set the category up correctly, the first time you have it under control, change the dollar amount, and everything is taken care of. Now on the software that I'm using, I'm not going to mention a name, they don't pay me to tell them about it. But they all kind of work the same. You can set up the reoccurring entry, you have to go to recurring transactions. And you can add one if you just enter in it. So the very first time, say if you're just getting started using this app is brand new, or you just starting to track, then every time you come up to an entry that you know you're going to pay at least once a month or more should be an interim setting it up in your reoccurring transactions. And then once you have them all set up, you just need to post them the next month, you just need to click Yep, the date changed the date, maybe the dollar amount and enter and it's gone. You should set it up to where you have to review it before post and you need it to come up at least four to seven days in advance. So you can look forward, it's important to know what's going on. So if you have set up seven days that come up to be approved seven days in advance, you have a general idea when your bills are coming due, you can look there. And you know in the next seven days, I got these to pay, you have X amount in your checking account, you can cover a new set to go. So those are some things you can use in your trapping, tracking application to help make your personal finances easier and work for you. That's the idea. So if you're looking forward on what's coming due, you're not going to go out and spend too much on a Friday or Saturday or weekend and then come up short and not be able to pay some of your bills coming up. Because you know, get paid for another week after you know, two weeks from this particular weekend. He can always plan ahead, look forward is very important. So being consistent on where you're posting to your categories. Looking forward is tracking application can help you do all those things. And it doesn't take a whole lot of effort. You'd been doing it for six months, maybe made some mistakes, you need to go back and find them and fix them. Maybe you've been doing for three months, same thing, maybe you're just getting tired to doing it's too repetitious, set up reoccurring transactions, make the program work for you. And you will be more accurate and better off in the long run. One of the ways you can look for mistakes is by doing reports and looking to see if the the total subcategories are more or less. Basically, you're looking for less than the total in that account. I personally didn't find anything in mind. So that means I had a pretty good thing. I did find a couple that was posted to the heading account or the master category. And I was able but they were small dollar amounts. So nothing that would be noticeable, but I fixed them. Because we want to be consistent. We want to have good reports. The reason you're doing all this is because maybe you have a debt problem. And how I do you have a debt problem because you're not planning for the future. You're living paycheck to paycheck. Why are you living paycheck to paycheck because maybe your debt is too much. Maybe you don't have control on your spending, maybe just are not looking forward far enough ahead to see what's coming up so that you can control your spending today. So he Have money available to pay your monthly bills tomorrow. That's all this is all about. It's a matter of you, gaining control of your personal finances and keeping control of your finances. Now that I've talked about where to look for problems and things, when you first get started, you need to set up your categories for those ones you use. Now, whenever you use an app, it's going to come with categories already set up, it makes life easy for you less thinking. But in order to make your budgeting or control center process easier, you need to rearrange your categories to look more like your budget, or your control center. A budget is a control center, I like to call it a control center, because it helps you control your finances, the categories are gonna be in alphabetical order, by the application, however they set it up. So it's gonna have like an alphabetical order advertising it from A to Z. So the your groupings for your control center is gonna be all over the place, you can go in and do like I did, I used a, I'd like to have my control center set up with my needs first needs are housing, transportation, and food, savings, and debt. That's not anywhere else. So pretty much five. So I want to put a, b, c, d, e, and in that particular order a is housing B is transportation, C is food, D is savings, and E is debt, you can do a numbers, like a one, a two, a dash housing would be the heading or the name of your master count for your housing category. Why am I doing that, I'm doing that. So now I can go through the alphabetical list of my categories, and fine real estate taxes, make that a two. So that now it's going to come up number two, a one is gonna be housing, a two is gonna be real estate taxes, a three might be my mortgage payment, then a four would be my master sub master of my utilities, and then I'll put all the utilities under that one. So then it would be a four would come up four, so it'd be housing. When you print it out, it's going to be in this order, a one, a two, a three, a four. And so some would say housing. Whatever I just said, utilities, or housing, mortgage, real estate tax, home insurance utilities, it's going to come up in that same order. Every time I print out a report by category every month, every time period I print out has gone out print out the same way every time. The only way it won't, is when I post something to something that's not in the correct order, but I want it there. So I'll go in and change it. And I'll do it by adding my categories list. That's how you make your life so much easier. And makes the updating of your control center on a regular base, clockwork, no problems all because you've gone to set up your control center, the exact same order that this report comes out. Occasionally, you'll have something in there that is once a year or something, and it might be a little bit out of place. But then you only have one or two items you're looking forward to plug in to your Control Center, and not every number where you might then miss something. So that's important. And it will make your life a lot easier down the road. It's kind of a pain setting up it. It's not too hard. I've done it. I did it is that whatever. If you can think of a different system that works for you to put it in order in which you want. Fine, go ahead and do that. That's while I figured out how to get it to work for me. I'll be back in one moment with my final thoughts. If you're interested in learning about an online software If that helped myself get out of debt, it does tracking, budgeting, and keeps track of all your assets and all your debt. It even tells you how much and when to transfer money into your savings account, and how much and when to transfer money to your debt, and which debts to pay off in order. First, it's not cheap. It's a one time payment. But it will definitely be an investment, something and yourself and an investment in your personal financial life. If you're interested, send me an email at reduced debt increase And I'll send you the information about this online software that worked great for me. One of the final items to talk about on your tracking program, is if you're entering your transactions directly from an online bank account, or your online credit card detail, where you're picking up the date. Oh, if you're out your checking account that that date is the date that that item cleared the bank, which is different than the date you actually purchase that item. Why does that matter? Well, it matters towards the end of every month. Because if you use the bank date, and it's in the next month, but it was purchased in the previous month, it could throw off your budget for the last month and future month. So in order to be consistent, which date are you gonna use? Well, for taxes that then mainly it's at the end of the year, is it for taxes is to date, you actually spend the money or purchased the item, which could be different than when it cleared the bank. So on December 30, you go out and you make a big charitable contribution cash, let's say or cheque. But it doesn't cleared the bank until January 10. Well, you want to claim that in the previous year, because that's when you made it, you keep your receipt. And that's your proof of when you actually did it. So for income taxes, it's when you spend the money, not when the money clears the bank, if you want to be consistent throughout the years, so you don't forget, you should do that every month. So if you're using your receipts, use the date on the receipt, because that's the day that you actually had that expenditure, not when it cleared the bank. The same thing with your credit cards is the date you do it not the date it clears. Now most likely, it's going to clear the same day in most cases, but it may not. If you go to restaurants, it may on a weekend, it may not clear till Monday, if you are doing it on a Tuesday, it might clear on Wednesday, which is no big deal. But let's be consistent on the dates we're using. I bring that up because I think most people, that's probably they're entering their transaction directly from their checking account online, or their credit card accounts online. So that's the only reason why you should keep a people paper receipt doesn't make a difference. Not really a whole lot. But it could and may make a difference on your income taxes at the end of the year. So definitely remember that at the end of the year, keep your receipts for income taxes, which you should anyway, so you can prove what happens. Now when you're entering transactions and every account like you could have two or three credit card accounts in your checking account in your savings account. Your your bank may do it one way where it could say pending transaction. And it's already deducted from your balance. That's what my bank does. But on a credit card account or a different company, which in my case is a credit card. It'll say pending transaction and it will show it there. But it's not a part of the balance yet. So how are you going to handle that? What I do since I know it happened, I go ahead and enter it in my application my app, but I might use instead of the current date I might use tomorrow's date so that it's above every thing out so that when I get everything entered, I can look on my Trent my roaster for today, their current day and see what my balance is to make sure it matches the balance on the line account or my my credit card account. For those, I'm good. And then the other two items are tomorrow, they might clear tomorrow, I may change them back to today, because that's when I actually spent the money. But I don't really have to unless one at the end of the year, or close to end of the month. That's the only two times that really matters in the middle of month, it's not gonna matter much, because it's not going to affect anything. The important part here is be consistent. And you need to make sure that when you do your entries, you're matched to the penny to your application that you're entering in, and what the application you're getting the information from, make sure both are the same, the balances should match. If not, you need to find the problem, go back and find it and fix it. For me, the most common thing is I might enter a transaction one day, and then a week later think I didn't do it, enter it again. And then my balance is off. I take the difference I find $1 amount I go down through Oh, that's in there twice. And I was there two days apart, or week apart or a few days apart. The same place, same dollar amount, just different dates. I delete one I'm in bounce I'm everybody's happy and we're good to go. That's my most common mistake, or I make a thing. Or I might just be off a penny, I might enter the wrong amount because I'm not paying close enough attention. So I look for pennies, I look for dimes, and even, I think good lately and hadn't had a whole lot of problems. But occasionally, I have some bad times where I make a lot of mistakes. So let's recap. You're doing the application and you're doing your tracking so that you can take control of your money, and most importantly, your spending. And you can do your control center or a budget to see where your money is going. That's the reason you're doing all this. If you've been doing it for a while you should look for errors, make sure he didn't post directly to a heading account, or a master account. It should always be posted to a sub account, you can do a report and scroll down through the report to see where you might have gone wrong. Or he can just look through your check register. But I just do all transactions on their own. On the rest are just do all everything. So includes all my my checking my savings and my credit cards. And I just scroll through it. And I'm just looking for anything that don't look right. I see it, I fix it. And I keep going as you do your weekly entry, make sure you're always in balance with your bank and or the credit card statement that you're working from. Make sure your dollar amounts match. Be aware that sometimes depending on the company that it might show, and it might show as pending, but it's not a part of the balance yet. Or it hasn't been deducted from your checking account yet. Every bank is going to do it a little different. My bank shows it pending but it's already deducted from my account. My but my credit card shows pending and it's not included in that account. So they're all they all could be different. So watch out for that. Yes. On a regular basis, review your work and make sure everything is as accurate as possible because then that makes your control center more accurate and more detail originated and you'll get good information from this little bit extra effort you put into it. You'll get a lot better consistent information, and you'll be glad you did so