My Home Accounting Experience

Published on November 03, 2010

My Home Accounting Experience

    imageToday I would like to share with you my personal experience in home accounting. Accounting for personal finances has long become a habit for me, as I have been doing this for more than 5 years. During this time, I started all over again several times, completely changing the accounting methodology, trying to find the most effective way.

    About what I understood during this time, and further discussion will go. I hope you can learn something useful from my experience and make your life easier. I hasten to note that in this post I will not advertise programs or services, but I will only talk about general principles that are suitable for any accounting system.

    And at the very end of the article, I made a small gift in response to the requests made in the comments on the last post. But first things first.

    Who should keep records?

    Of course, this issue is facing those people who have a spouse. In this case, it is best to have one common budget, even if each spouse earns separately. This is not only convenient for accounting, but also useful for family life (the more you, as husband and wife, have in common, the closer your relationship will be). You can simply make expenditure categories for personal needs, which will not be taken into account (say, $ 100 / month for any expenses of the husband and the same for expenses of the wife), but keep a family budget (take into account expenses together, draw up a budget together at the end of the month, etc. .).

    In our family it was like that. I have always managed and manage money, as the head of the family. If the wife spent the money, then after the shopping trip (which was not chaotic and constant, but planned), she simply reported to me about the expenses, and I included them in the program. With the growth of our incomes, accounting has changed a bit, I no longer ask her what she bought and at what price, this is not so important (another is more important now, but more on that below).

    What should be considered and why?

    A lot of debate is about what to consider, what not to take into account. Should I record all expenses, if so, in how much detail, etc. I began to conduct home accounting when my income was small (slightly higher than the average in the city). And I wrote down all the expenses in great detail. I divided the categories into subcategories, wrote down everything to the smallest detail. That is, my account was as detailed as possible. This helped a lot to identify the smallest “holes” in the family budget and save a lot of money.

    As was said a little earlier, the wife came from the store (if only she went to the store) and was accountable for her expenses. Of course, the word “accountable” should not sound somehow rude, it did not justify itself to me for the expenses made, but simply stated the facts. No disputes, like: “Why did you buy another bag of milk if there was yesterday’s bag in the refrigerator?”, Or “Why did you buy cheese for that amount? After all, there is much cheaper! We will never save anything like that! ”Etc. If you start to have such a showdown - it is better to abandon the accounting of finances in general, rather than destroy the relationship.

    With revenue growth, detail has been lost more and more. When I spoke with my acquaintance about 4 years ago (he was already a multimillionaire, he has factories, a car company, and chains of various stores), he answered me: “I don’t understand why I need to write something down somewhere? I do not have such a case when I would like to buy something, or just need to pay for something, but there is no money. Why save, spend time and energy on cost accounting when I physically cannot spend all the money? ” Then I tried to prove something to him, to explain, but now I understand him. I am sure that if my income is even greater, my accounting for expenses will change even more (in the direction of its absence).

    What does my accounting look like today, or why do I need home accounting?

    Now I don’t write down everything to the smallest detail, accounting for some expenses doesn’t make much sense at all (like gasoline for a car, since no matter how much I spend on gasoline, I won’t save on it and go by public transport, unless I occasionally ride in good bike and just for fun, and not for saving).

    At the moment, it’s not so important for me to know WHERE the money has gone (for 5 years of constant accounting, I already know where and how much money I spend), it is important to know how MUCH money I have now. And this is precisely what I am doing.

    I open the program (or some service, it doesn’t matter) and I see all my assets and liabilities. I know very well how much money I have now (which is not so simple in the modern world, where a person can have many cards, credit cards, Internet money, deposits, shares, debts, etc.).

    If you need to make some kind of expense, I can see very easily how this expense will affect my future, whether I can afford it. Every month I quickly draw up a budget (copy from last month and make changes as necessary). Having drawn up the budget in 5 minutes, I immediately orientated myself and realized that I couldn’t worry about the current month - all expenses would be covered in any case, regardless of whether I would take them into account to the smallest detail or not, whether I would save or not ( within reasonable limits).

    To summarize

    From my 5 years of daily home accounting experience, I would recommend the following:
    1. The lower your income, the more serious you need to take every spend and keep the most rigid and complete records.
    2. With revenue growth, accounting detailing can be weakened, focusing on how much and where you have money, rather than where it goes. And it is imperative to draw conclusions (if you have full debts and no investments, then you are doing something wrong). You can even write down such various expenses as bread and washing powder with just one amount - household expenses, or obligatory expenses and the like.
    3. The budget must be prepared almost every month, regardless of how long you manage finances, or how much you earn. This is an excellent remedy for financial worries and unpleasant surprises.
    4. It is always important to remember, no matter how much you save, you can become rich much faster by increasing your income. Spend less time detailing and scrupulously keeping track of each penny and think more about how to increase your income.

    I really hope that my experience described above will be useful to someone in my personal life!

    Small gift

    My first post on Habré, which I wrote a couple of days ago, aroused relatively great interest from readers of Habré (more than 200 comments, more than 100 votes and about 70 users who added the post to favorites). I was very pleased to see such an interest. And now, in the comments, people rebuked me, they say, this is not done - since you are telling about your products on Habré, just give some kind of gift.

    I decided to do the following. For all readers of Habra, by the end of this week (on the 7th day inclusive), we provide a 50% discount on our Family 10 Pro software product. All information about the program (you can also download the demo version for free) can be found on the program website: , you can purchase it there (or here is a direct ). When placing an order, you need to specify the HABRA series and number 2010, as in the screenshot:


    How do you manage your finances? What can you advise in this regard?