Tuesday, November 24, 2009

Tehnorati Claim

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Sunday, November 15, 2009

Personal Financial Tracking

With an abysmal balance sheet in front, it was apparent what needed to be done - never let my balance sheet look like that again.

How exactly to ensure that this never happens again, was a mystery. So, I figured I'd take a slightly easier route - track what I was doing before trying to figure out was doing wrong. So out came the one and only skill that I had picked up during my year as a consultant - building unnecessarily elaborate excel sheets. During my first few weeks in a strange new city, I spent my evenings sitting in front of a computer screen optimizing my excel creation so that I could see exactly where my income was coming from, how much I was saving, where I was spending and what my investments were doing. As proud as I was of my creation, a colleague soon introduced my ignorant self to Microsoft Money.

Soon after a few weeks of using a trial version of MS Money, I was on the prowl for a personal finance software package that would meet my needs. Over the years, I have kept an eye on this market space, so I figured I'd share some things about the top few products out there.

Quicken
The personal finance software market is heavily dominated by Quicken - and I would say with good reason. While not perfect, Quicken makes some of the easiest to use personal finance software out there. With 3 different flavors, it offers 'almost' any feature a user could look for

Quicken Online: Quicken's most basic (and free) product. It provides basic tracking if income and expenses based on custom categorization. Not as easy to use as the desktop versions and has some basic functionality missing. Look at the overview of Mint.com for a more complete free online services.

Quicken Deluxe: All of the basic functionality of Quicken Online plus some advanced budgeting features. It also allows you to export data into turbo tax for some sanity come April 14th

Quicken Premier: Offers everything that Quicken Deluxe does plus advanced functionality to track and plan investments.


MoneyDance
Money Dance is a commendable player in a space dominated by a heavy weight contender like Quicken. The UI is easy to understand and get used to. It provides 'almost' the same functionality as Quicken with a much lower price tag. In addition, it provides some handy tools such as currency conversion and debt payoff calculators.
What it does lack, however, is the ability to seamlessly operate with other products for some slightly more advanced functionality. Investment tracking, for example, requires exporting data from your broker house before being able to use it within the software.

Mint.com
One of my favorite options, Mint is a free online personal finance solution that can boast the features of almost any paid desktop application in the same market. Recently acquired by Quicken, Mint does it all - track income, investments, expenses and budgets. One of the best features of the site is the plethora of reports it generates showing historic trends of everything from monthly grocery expenses to the average interest earned on savings accounts over the months.
On the downside, there is no linkage to any tax filing software (something I am willing to overlook). Also, keep in mind that mint is still pretty much a startup product despite having been acquired by Quicken. While rare, you might end up finding some bugs in the product. However, you will find an active community willing to listen to your issues and allowing your voice to reach the developers who can fix those very issues.

Microsoft Money
In June 2009, Microsoft announced plans to discontinue the Microsoft Money product - so lets not spend time reading about this product.
http://www.microsoft.com/MONEY/default.mspx





So, for those who havent quite started tracking personal finances yet, go out and give one of these offerings (or others) a shot.

And for those who are using these and others, it would be great to hear of your favorite and not so favorite aspects of these products. Or, better yet, any other products that you have found to be exceptional.

Wednesday, November 4, 2009

Bright Eyed and Still Broke

Alright guys, here it is; the naked truth of my financial state 1 year out of college. This is what my personal balance sheet looked like.

Not too bad for a college kid just out of school with 24 paychecks in his pocket - but appalling for someone who had been blessed with just about 10k worth of student loans after 6 years of college.

My personal finance management over that one year was quite shameful. I like to think that I have gotten better, but more details about my current personal financial management state later.

At this point, I don’t know if anyone is reading, but if anyone is and would like to dare it, I’d love to hear any ‘fresh-out-of-college-financial-disaster’ stories.

Keeping my fingers crossed and hoping for some stories

Bright Eyed and Broke

It’s been a few years since I graduated from college. Looking back, it surprises me how much my perspective of my financial standing at graduation has changed over time. As a bright eyed kid who is out to conquer the world, I felt the few thousand dollars worth of debt I had was the last thing to worry about. Saving the income from my job right out of college just didn’t seem that important either. All I knew was that I was earning real paychecks and that worrying about personal financials was something I could take care of after I was done basking the sunshine of all this new dough.


It didn’t take long for reality to hit me smack in the face. Three months into my ‘cushy’ new job, my company’s largest client got bought out my a telecom giant that did not believe in hiring contractors. Needless to say, I found myself out of a project and sitting at my company’s home office filing papers and wondering how long that glorious paycheck would keep coming in. One after another, as my colleagues started to get laid off, I keep my head low, buried in the sand. To this day, I do not understand why they spared me the axe. I didn’t make very good coffee for the partners. Neither were my paper filing skills any better than those of a high school kid. My guess is that it was merely the fact that I was the lowest paid employee at the firm that kept me on their payroll.


Underpaid or not, it was obvious that the current situation was not sustainable. Finally, 9 months after being employed, I took stock of my net worth. That was when it dawned on me that I was in deeper trouble than I had imagined. With a total savings of under $1,500 and 100% of my college debt still hanging around my neck, I used my very expensive college education to calculate that I could survive a whopping 0.84 months if I were to lose my job. Not a whole lot of time to sit around filing papers and waiting for a project while keeping my fingers and toes crossed hoping that the dreaded pink slip did not find its way to my desk. It was obvious; I had to get out before I got thrown out.


So began the job hunt – again. It felt like I had just done this; putting on that uncomfortable suit and tie; walking around job fairs with my resume pretending to look interested by the mere mention of an unknown company’s mission statement. But once again, lady luck smiled at me. I managed to land an interview with a major technology firm all the way across the country. Before I knew it, I was zipped over to the company headquarters for an interview, zipped back home, received an offer in the mail and found myself surrounded by moving boxes. Somewhere between taping those boxes shut, I found myself doing what I should have one month into my first job; I drew up a simple ‘back-of-an-envelope’ balance sheet.

Friday, October 30, 2009

Under 150k

It's been about 2 years since the government official declared the current recession. Today, 2 years later, as arbitrary as the initial declaration, I hear the government is looking to officially call the recession at an end.
I want to go out and ask - who defines a recession. Is there a little red LED that starts to blink somewhere in the Treasury secretary's office when the economy 'officially' goes into a recession? Somewhere in the recesses of my mind, I see Tim Geithner staring at that red LED as it starts to blink uncontrollably and explodes when the economy 'officially' goes into a depression. Another thought - who decided that a depression was worse than a recession? Couldn't a recession have been named depression, and a depression a recession?

But - I fear asking these questions to the 'gurus'. I fear I will be drowned in the incomprehensible chatter of financial jargon and come out with a few fewer brain cells while the rest spare population of my grey matter threatens to go on strike. So I step back and wonder - what do I really want to know about all this? What is it that I care about? Under 150 is intended to be just that. A forum for us little guys to discuss the impacts of the big bad financial world on our modest net worth of under 150k

If AIG goes under, what does that mean for me? Maybe I don't understand it, but maybe one of you does and can explain it to me from the perspective of the little guy who does not have millions riding in the share market.

If I decide to go with an ARM on my mortgage, will I become one of those poor souls I see on TV who were victims of the housing market bubble? Maybe some of you don't completely understand this, maybe some others do.

Lets get cracking. Lets take the little fragments of knowledge, advice, tips, tricks and secrets we have about handling our small fortunes during these chaotic financial times and put them together to make a conversation that is more useful than the complex financial analysis that is shoved in our faces everyday.