I spent much of last week learning Quicken 5, a helluva
good bookkeeping package for tracking personal finance
and cash-based businesses. Highly recommended. Quicken
can combine home and business accounting in a single database,
with transfers between accounts treated differently from expenses.
Or you can keep separate databases. It's all "object oriented"
or "truth maintenance," so that changing an entry updates
all its ramifications. (There's no audit trail other than
your periodic backups, so this isn't for employers who
don't trust their bookkeepers.)
Setting up report templates taught me a lot about accounting,
and the budgeting and retirement functions illuminated my
financial situation. My wife interprets the numbers differently,
but at least we now have a common vocabulary. (This is
a woman who set up our investments and who feeds her family well
on $2.35/person/day, so I'm inclined to listen.) I hear that
Managing Your Money is even better for tracking investments,
but I'm satisfied with Quicken's fund portfolios -- with
simple graphs and ugly-but-flexible reports -- and mortgage,
college-planning, and retirement calculators. The chief
limitation I found is that tax-deferred and non-deferred savings
can't be combined in a single retirement planning computation.
(You have to do the analyses separately and then add the results
on paper. Perhaps Quicken 6 has fixed that.) Next year
I'll try out the built-in tax reports. Now that I've got
the categories set up, I can barely wait for the next ten years
of data.
Now when I buy software or plan an expense I have to think
about my goals: Recreation? Entertainment? Education?
Personal? I need a similar discipline for budgeting my time
-- but entering all the "transactions" would leave no time
for anything else. :-( (I hear that Fred Brooks kept several
time clocks by his desk and would "punch" them every time
he switched activities -- even just to speak with a visitor.
He's the efficiency expert who noted that adding manpower
to a late software project makes it later.)
