Smart Money MD

It almost seems like keeping tracking of your expenditures is a prerequisite for improving your financial self. For a blogger that writes about money and finance, not documenting expenditures is downright heresy. Well, I am guilty as charged.

I don’t track my monthly expenses.

There, I’ve said it. Now, how can someone be financially conscientious if they don’t even know how much goes out of their bank account monthly?

The beginning.

I wasn’t always like that. In medical school, I meticulously tracked my bank account and credit card statements. It was like checking daily I/O’s in pre renal patients on the floor…only easier. I essentially had no income other than my student loans. Sure, I tutored on occasion but I’d say that I earned less than $100 during my entire 4 years of medical school. The expenses were also easy to track:

• rent payments
• groceries
• furniture from craigslist
• occasional bar tab / restaurant meals
• the new pair of shoes I bought

I sure as hell didn’t let my balance run close to zero before the next semester’s loan disbursements came.

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In residency, I slacked off slightly, but still kept tabs on my paycheck and expenses. I did not contribute to my 401k/403b during residency for several (perhaps unjustifiable reasons: (1) My rent consumed about 60-70% of my monthly stipend, (2) I thought that the investment options available sucked, (3) I used excess money to repay my student loans.

However, I made sure that at the beginning of the month that I would have enough to pay next month’s rent. I wasn’t married yet, so I didn’t have to contribute to my future spouse yet. (:-P).

The present and the problems.

As an attending, I did open a Personal Capital and Mint account. (referral link on the sidebar if you want to help out the website!). It’s a great asset management tool with cool pie graphs, line charts, and even an retirement planner. This is where some of the hassles emerged:

1. I had separate accounts for myself and my spouse. This means two different logins. Unfortunately, some of our joint accounts overlapped, it adding up both sides made it seem like we had more money than we actually did!
2. Many of the accounts did not synchronize well. I suppose that this comes in part from the ever-evolving security mechanisms in online vendors. I had a hell of a time with my employer’s 401k (ADP) and HSA accounts not synchronizing at all.
3. I buy many store gift cards. This is mainly a means to save some money and earn credit card points along the way. Once a year, my local grocery store sells $100 store cash cards for $90. I essentially buy hundreds (maybe even a thousand) dollars worth of grocery store credit at 10% off. I do the same with certain gas station cash cards whenever there is a sale. What this means is that all of my store category expenditures are front loaded. While I probably deplete the funds within a year, it does make it tricky to follow all of the expenses under Personal Capital.
4. I am lazy. If you simply click on “Expenses” in Personal Capital, you can get a YTD tally of all of your expenses. However, many of these transactions are erroneous categorized. Many of my bank transfers from my checking account to savings account defaults as a “check” and not necessarily a true expense. Some of the checks I write need to be edited for specificity. How long would it take to keep these numbers correct? Probably 10-15 minutes a month. Why don’t I do it? I can’t be bothered! I need automation!

The future.

The maintenance hassles in Personal Capital may only amount to 3 hours of my life my entire year. Probably not a huge deal to go through. I probably will have to contact the customer support staff to tweak the logins from time to time. It’ll be my New Year’s resolution.

What will I gain from it? For one, I’d have a better idea knowing how much I spend annually. MMM spends $25,000 annually for a family of 3. I’m pretty sure I spend at least $100,000 for a family of two. Wouldn’t it be nice to see how high earning doctors can still be budget conscious and tweak their savings rate?

How meticulously do you track your expenses?

(Photo courtesy of Flickr)