Thanks for the feedback everyone! I appreciate the responses and it was interesting to see the different approaches.
--
I do it as the expenses occur, but then I pay off my credit card weekly and I don't wait for the bill to come due.
Thanks for the feedback, we pay ours off every month but we do wait for the bill.
It's easier if I just put in the credit card amount owed on my spreadsheet, and not have to worry about when each expense was incurred and which category. I just need to know how much we spend on average per year. That's how I track our expenses, I'm sure a lot of people don't agree with the way I do it, but it's what works for me.
This is similar to how I feel, as I am not overly concerned where each dollar went if we are within our overall annual budget. But I do like having some categorization so I can see where we can tighten the belt if something is amiss or our priorities change.
I do it like you are currently because I use the credit card bill to figure out how much we've spent in the various categories we have in our spreadsheet. Then I pull info from the bank accounts in the same time frame as the billing cycle. It would be a pain to do it otherwise. I don't have cash flow concerns, so there's no advantage for me to do it differently.
What problem are you trying to solve by changing how you record expenses?
I think that is a big reason why I've done it the way I do as we don't have cash flow concerns and to do it more actively seems like it would be more work for me, versus the once a month I tend to do it all now. Your question is a good one, and I would say there really isn't a problem that I am trying to solve but as my wife and I sat down over the weekend to review our budget and planning for 2018 it got me to thinking. She tends to be quite hands off when it comes to managing the finances, and when I explained how I do it now it didn't make sense to her and she would enter everything as it occurred.
For now, I am going to continue doing it as I have been with my spreadsheets (and MS Money--yes I still use it as I just love that old app) but have also signed up with Mint and set everything up for more active tracking. My wife has installed the app so she can start getting more engaged as well, and I think she will connect with that view of things better than my spreadsheets and MSMoney.
I enter them based on the date they occur. I sit down after the end of each month and spend a couple of hours entering all bank and c/c transactions in one go rather than do it at different times during the month. I tried doing that and it got too confusing remembering what I had entered and what I hadn't.
As long as you're consistent I don't think it makes too much difference
You're right that the consistency is key, and therefore I think it is best to just keep doing what I've been doing as it works for me. I think having my wife get a little more involved as we reviewed our annual planning made me rethink things, and ultimately I want to encourage her participation and therefore was thinking what would click with her--hence why I signed up for Mint tonight.
I track as of when the expense gets charged to the credit card. I use YNAB and I try to enter each charge at the moment I make the purchase. Then every week or so I look at my account online and catch any that I've missed.
Thanks for the feedback, I thought of signing up with YNAB but opted for Mint instead right now as I think my wife will find it easier/better.
The way I see it:
- the date of purchase is just that, whether made by credit card, cash, or trading goats
- the payment of the credit card is a transfer from my checking account to the credit card -- not a separate expense.
Your method makes no sense to me as you're confusing cash flow w/ expenses (I'd wonder why, say, I had a bunch of "Christmas gift" expenses in January, for instance). but hey, I don't have to wake up every day and be you! Do whatever makes sense to you.
Haha, that is basically how my wife was thinking about it too. And I really can't say it is wrong as it is the way it logically makes sense. The way I have been doing it is largely out of a time / convenience factor and I don't mind seeing Christmas presents in January (or even February for those last minute gifts) or 4th of July groceries in August/September. The more I talk about it the more I realize it is pretty wonky, but it does work for me so I am going to stick with it for now as we start using Mint to supplement my spreadsheets.