My wife is a coupon freak.  Each week we buy the Sunday paper and she can barely wait to pull the leaflets of coupons out and scan through them.  An hour each week is spent cutting and clipping, until we have a pile of coupons awaiting a trip to the local grocery store.  She even clips coupons for friends and relatives, and collects coupons from other folks who “don’t need to clip coupons” (aka lazy people, in my opinion).

After the trip to the store, my wife makes me guess how much she saved in coupons.  Some weeks it’s a LOT, other weeks it’s not as much, but I can usually estimate by the size of the smile on her face.  I typically congratulate and thank her for saving the family some money by being frugal with the groceries.

But it recently hit me that while she is saving our family money on items we would buy with or without the coupons, we are not actually saving any money (my fault, not hers).  The $10, $20, or $30 she may save just goes towards some other expenditure and we never “realize” the savings.  I can’t tell you (as evidenced above) exactly how much she has saved us over the years.

So, I’ve decided to create a new category in my Quicken file called “Coupon Savings”.  After each trip to the grocery store, I’ll take the receipt, note the amount saved with coupons, and transfer that amount from our checking account into our savings account at ING.  We’ll be “feeding” our savings account with the coupons savings while feeding the family.

It will take one additional transaction in Quicken, but I’ll then be able to track our coupon savings and boost the amount saved each year.

DK

The sermon series at Hope Pres about money management and financial peace continued this week.  Last week was a summary of sorts, and this week Craig started to delve into specific things you can/need to do in order to achieve “financial peace”.

While most of the suggestions are old news for me and my family, they do prompt some new ideas on ways to save, be more frugal, and manage money as a family.  Perhaps the most important thing that keeps coming up is the necessity of good communication within the family unit.  That’s something I probably don’t do as well as I should, but we’re working on it.

A nifty little tool developed by Dave Ramsey called The Gazelle Budget was showcased.  For those of you who do not have a budget, this is an easy way to get started.

The Cliff Notes from the sermon are as follows:

• Use a written budget.
• Take control of your credit cards.
• You have got to communicate.
• You have got to learn to say NO!
  • Wait 3 days for purchases < $100
  • Wait 1 week for purchases $100 - $1000
  • Wait 1 month for purchases > $1000
  • Spend the time praying about the expenditure…if you still want/need it after that time, go ahead and buy it.
• Create a debt snowball.
• Reduce debt.

One man pretends to be rich, yet has nothing… - Proverbs 13:7 (NIV)

From a Quicken perspective, this sermon seemed to be related to the Debt Reduction Planner and Budgeting tools provided in the software.  I plan to do a short post in the next couple of days about these two powerful tools.

DK

But this post isn’t about why you should check your credit report.  I wanted to share how I use Quicken to help remind me to check my (and my bride’s) report, and then store the data within my Quicken file for future reference.  This method will insure you stay current with your credit history every four months, and have the data available electronically if you should need to reference it again.

Transaction Setup

1. Create a Category called “Credit Reports” or something similar.  This will allow you to easily search for past “transactions” by reporting on that category.
2. You’ll need to set up a Scheduled Transaction for each of the three credit agencies.
   1. Payee:  the name of the agency
   2. Category:  “Credit Report” (or the category you established in step 1)
   3. Memo:  Use this to store info particular to this credit check if needed
   4. Account to Use:  doesn’t matter what you put here
   5. Method:  doesn’t matter what you put here
   6. Amount:  $0.00 (because it’s FREE!)
   7. Scheduling Start On:  Pick three different dates that are four months apart from each other.  For example, TransUnion may be on 11/1, Experian on 3/1, and Equifax on 7/1.
   8. How often:  Yearly, on the dates you establish
   9. Schedule the transaction with no end date

Credit Check

After this, you’ll need to actually go check your credit report.  Visit annualcreditreport.com and follow the links.  At one point you’ll be prompted to pick the appropriate credit agency which will take you directly to that agency’s website.  You can also create user id’s with each of the agencies for future transactions, purchases, etc.

Once you get to the web page where you’re able to see the report, you’ll need to save the page and store it in Quicken.  I’d suggest just storing the Summary page, but if you have any problems, negative issues, etc that you may want to store, you may need to save multiple pages.

Storage

1. Save the webpage to a single file.  You can use PrintScreen and paste the image in Paint, a third party screen capture program, or even “Save as Webpage” and zip the folder into a single file.  Make a note of where you save it…I’d suggest a folder to store the files.
2. Go back to Quicken and enter the Scheduled Transaction you set up.
3. Before you accept the transaction, click the “Attach” button associated with that transaction.  This will open a window which will allow you to attach the saved file of the credit report to the specific transaction.
4. Verify the file has been attached…you’ll see a small icon under the date of the transaction that has a sheet of paper with a paper clip.
5. If you saved more than one page, attach the additional pages in the same manner.
6. Accept the transaction.

You have now saved a copy of your credit report and attached it to your yearly transaction.  You can quickly recall it by searching for the Payee, reporting on the category, or simply going to the specific date if you know what it is.

If you have problems with this method, please feel free to email me and I’ll try to help.

DK

Here’s the Reader’s Digest version of his sermon along with a few Bible passages:

• We overspend (recent stats show $1.22 spent per $1.00 of income)
• We buy into the philosophy of “keeping up with the Joneses”
• Our culture’s “normal” view on wanting unneeded expensive “stuff” is actually very ABNORMAL as it causes nothing but debt, stress, and unhappiness
• We can be free and have financial peace with God’s help

The plans of the diligent lead to profit as surely as haste leads to poverty. - Proverbs 21:5 (NIV)

For where your treasure is, there your heart will be also. - Matthew 6:21 (NIV)

Free yourself, like a gazelle from the hand of the hunter… - Proverbs 6:5 (NIV)

Just more substantial (if you subscribe to the Christian beliefs found in the Bible) proof that good money management (whether you use Quicken or some other tool) is essential to real happiness.

I’ll be posting the next few week’s of sermon notes here as well…

DK

Considering the state of the economy these days, I’d expect there a few folks looking for help in restoring order to their finances, and my hope is that QuickenEngineering.com can assist in explaining ways Intuit’s Quicken software can manage one’s personal finances.

I’m normally not big on “joke” emails, but here’s one that I’ll leave you with….

If you had purchased $1,000 of shares in Delta Airlines one year ago, you will have $49.00 today.

Based on the above, the best current investment plan is to drink heavily & recycle.

But be careful…I’ve found where it can screw up your cash balance amount in your 401k account in Quicken, which in turn, invalidates your Net Worth number.

My company changed their employer match formula beginning back in January. It used to be a set amount per year, but they’ve changed it to be a percentage of my salary up to a certain point, which works out well because this change increased my match by several thousand dollars. (This change in the 401k match was negated by a change in the profit sharing plan, but it still works out to my advantage.)

I noticed tonight that the cash balance in my 401k account was declining rapidly. It’s normally either $0 or the amount of my last paycheck contribution (before the equities get purchased). I began to dig through the transactions and compared them with my brokerages transactions, and I finally (it took me longer than it should) realized that the employer matches were causing the issue.

Basically, the only transactions getting pulled into Quicken were the “buys”. There was no record of the employer match “deposits”. I’m not sure why this is at this point. Next week, after I get another paycheck, I’m going to look at the downloaded transactions a little more closely.

In the meantime, I went in and manually added the employer match transactions, and my cash balance is now at $0. That makes me feel a whole lot better.

Quicken has several backup functions built in to the software that makes it easy to keep your data secure.

1. Automatic file backup - Quicken automatically keeps five copies of your data files in a folder called ‘Backup’ that is in the same folder as your original data files are in. These files are numbered sequentially from with a suffix from 1 to 5. You cannot disable or change this feature. It is intended to recover your file in the event new data that you input messes up an account, you accidentally delete an account, or other human error.
2. Manual file backup - I say manual, but it’s an automatic process that enables you to backup your files to a different drive, media, etc. Instead of storing the files on your hard drive (as in option 1), you can define the drive (USB, external, CD, etc) that you want to use for your backups (in addition to the backup files in option 1).To configure this option, go to the ‘Edit’ menu, select ‘Preferences’, and then select ‘Quicken Program’. On the left side of the window, highlight the ‘Backup’ entry. Here you will define how often you want Quicken to remind you to back up, and how many copies you want to keep. If you have ample drive space, set the first number low and the second number high. You can never have too many backups!After you configure this, Quicken will prompt you to back up your files when you exit the program. You will browse to the target drive, select ‘OK’, and bingo, you’ve got a backup.
3. The last option built in to Quicken is the ability to use the Quicken service (at additional cost) to backup your files online on their secure servers. While I’ve never used this, it could be advantages if you use multiple computers, or don’t have other options. It does cost more, but you don’t have to worry about additional drives or keeping CD’s in a fire safe.

Also, keep in mind that your Quicken data files include five (5) different individual files. There’s not just one.

It’s important to have backup files on a different device than the one you normally work off of. Also, you may want to consider making a ‘yearly’ backup that you store in a fireproof safe or other offsite location. Again, there’s no such thing as too many backups….backup early and often!

DK

The part that caught my eye the most, perhaps because it’s not mentioned enough, was the second “step” entitled “Join an Investment Club”. I’m actually in the process of organizing a club with some of my co-workers. We haven’t bought any equities yet, but that is coming next month

I see the Investment Club organization as an opportunity to learn more than an investment vehicle. As JD writes, he has most of his money tied to index funds, but holds a little aside to play with on individual stocks. My investment club money will be my “play money”, but it won’t have as much exposure/risk as it would if I were investing on my own. With investment clubs, the entire club votes on which stocks to purchase, so it takes more research in a stock to convince the club members that a stock is a smart buy. The club atmosphere also removes some of the emotion associated with a stock purchase since transactions usually only occur on a monthly basis. Your in it for the long haul…it’s definitely not a day-trader’s environment. And hopefully the knowledge the group provides will make my main investment vehicle decisions that much smarter.

More posts to follow regarding my own investment club experience. Once I have an actual financial stake in the group, I’ll integrate it into my Quicken program and will hopefully watch it grow!

DK

There’s been a lot of discussion recently regarding Intuit’s approach to upgrading its software. This version change, along with the announcement that versions prior to the 2005 software won’t work with automatic bank downloads in the near future, have put a spotlight on the user’s ability to upgrade without paying for a new software package.

My personal opinion is that you, as a user, should be in a constant state of upgrade. I’m not suggesting you upgrade with each new yearly release, but by using the software you purchased back in 2003 you are probably missing out on new features and abilities that the latest version offers. Technology changes, interfacing with customers, banks, vendors, etc changes, everything changes over time. Doling out $50-$60 on the latest version every few years should not be that big of a debate.

DK

But, there’s a new competitor on the market. I saw a commercial recently for Chase Bank that advertised the ability to quickly (they claim in “real-time”) check your credit card balance via a cell phone text message. This service will enable you “to decide what to spend” on the spot. The poor chump in the commercial is seen in the electronics store kicked back in a recliner trying to figure out which big screen television to purchase. He has to text the bank to decide if he can get a 15″ or a 53″ TV.

I’d bet a dollar on the following statements about the individuals this service is targeted at:

1. They are probably not using Quicken (or any other management software) to track their spending.
2. They are probably only making minimum monthly payments on that credit card.
3. That “TV” or other large purchase will cost them quite a bit more in the long run than what the price tag says.

It would seem to me that there is something innately wrong with this type of service. It is encouraging people to base their spending on how much available credit they on their credit card.

A smart Quicken user would know how much they can afford before they leave the house. He/she would also NOT use a credit card because a savings plan had been started and followed long before the item was necessary.

DK