How I organize my finances.
Let's be honest: saving and managing money (especially these days) can be a tough nut for anyone to crack. We often fall into the mindset of spending what we have without giving much thought to future goals — a mindset that sounds fine until you suddenly need to meet a large expense or make a big purchase. If this sounds familiar, let me walk you through my own financial planning process.
In this video, I explain how I use the @Quicken budgeting app to track my monthly spending, save reciepts, create budgets, set savings goals and engage with insights to make important financial decisions. This app has been a breath of fresh air for my bank account, and I think you'll love it too!
In this video, I explain how I use the @Quicken budgeting app to track my monthly spending, save reciepts, create budgets, set savings goals and engage with insights to make important financial decisions. This app has been a breath of fresh air for my bank account, and I think you'll love it too!
Transcript
Hey, what's up? Today I'm going to show you how I organize my finances. I don't know about you, but it's really hard for me to save for things, and with this plan I've created a workflow to make some future financial goals and then track my spending that I'm doing now and making sure that my current spending is keeping in mind my future financial goals. Usually I would just check my account balance and say, "Oh I have enough money", and then spend whatever was in my account. But this way I can see the cyclical nature of getting paid twice a [month] and I can make sure that my current spending considers my future plans. It's kind of a lot of day-to-day work but it's really nice knowing that when you leave the house you know exactly how much money you can spend. And if you do overspend and do some retail therapy you know that there's a way that you can work your budget and change your future spending based off your current decisions to meet your future financial goals. I'm going to use a program called Quicken. I've used it for many years. It's basically just a transaction register, where you keep track of each transaction, but you can have different accounts and transfer between them. It's really powerful. You can probably use any other financial software. The concept is pretty much the same. Maybe even Google Sheets. I haven't dived into it that much, but I really like the power of Quicken, and you can save receipts to it and things, and we'll go all over that, but um if you'd like to use another financial software go for it, but in this tutorial I'm going to be showing you what I use and how I organize my finances so I'll do this over the course of a couple videos, and this is definitely not official financial advice, I'm not a financial advisor. But this is really something that helps me just, make financial decisions and move to different apartments, and buy different things, and all the fun stuff. So it's something that I share with a lot of my friends and students, and I, I am happy to be sharing this with you today. So let's get started so if you'd like to use Quicken I definitely 100% recommend it go to Quicken.com, and you can choose for Windows or for Mac. I'll go ahead and choose for Mac and I definitely recommend getting the Deluxe version. The deluxe version has features where if you have a loan that has interest you can include the interest and you can see how much interest you're paying over time, and then you can do simulations where you increase the payments, or do a one-off payment to see how that affects um how much interest you pay and, how much money you save. It's just the most powerful one out of the three. The premier one is if you have stocks and stuff, and you're super fancy, but I'm not that fancy and I don't think ever will be but, anyway so I definitely recommend getting the deluxe version. So step number one is to get a clear picture of all of your monthly expenses. So go ahead and go to Google Spreadsheets, and I like to create what's called a payment matrix. Just basically all of the bills that I have, and all of the due dates, and all of the APRs or the Annual Percentage Rate, the interest rates basically. So I'm going to go ahead and create an example one, and I'll do name of the bill, I'll do the due date, and the amounts, and the APR, if there is one. Now if the amount is a variable, um we'll get to that, but basically you'd want to do the higher estimate. I always like to pad my bills a little bit so that way each month whenever I pay my bill it's like five dollars or ten dollars less. There's a little breathing room within the budget. So I'm going to go ahead and list out some example bills, and I'm just making some numbers up. So in this example payment matrix, I went ahead and added my rent, electricity, internet, Netflix, Hulu and my credit card payments. Let's say if I have anything that's a recurring charge on my credit card payment, as well like Netflix or Hulu, that's not automatically drafted from my checking account, or something that I don't automatically send with a check, or a self-initiated payment, I go ahead and list everything, everything that's a month-to-month expense go ahead and list here. Once I have all of my monthly expenses listed out, I'm going to go ahead and start a new file and set these transactions as scheduled transactions. So I'll go to Quicken I'll launch a new file. I'll start from scratch I'm not going to use Quicken mobile or web. I prefer to have everything on my computer. And then the first step is to add your accounts. So you can add your checking account, your savings account, your credit card account, your mortgage, a random savings. Whatever. I'm gonna add a checking account a savings account, and two credit cards, and work with that for this tutorial. You can automatically sync up your account to download the transactions automatically. I don't like to do that because it doesn't include pending transactions, so sometimes whenever I spend money on one of my accounts, it doesn't automatically show up. In my Quicken so when I add something in the future, it's just not an accurate estimate. Now there are other ways to have a download only account, and you could transfer them so you don't have to type. But I prefer to type it manually. If you'd like more information on some workarounds where you don't have to type everything manually, I'd be happy to provide more information. Just join the slack channel and I can give you some more details there, but I'll show you how to add manual accounts for this tutorial. Okay, so I'm going to go ahead and do "my bank is not on the list" and do add "manual account." I'm going to do my opening balance, so the balance that I have today. So I'll say, uh 1200. And I'll do finish. Okay and then I'll go ahead and right click on the left sidebar and do rename account. And I'll call it HSBC for example. And I'm going to go ahead and create another account for savings. So I'll go accounts, new savings, my bank is not on the list, add manual accounts. 100, finish. Rename, and I'll put HSBC savings. And in my payment matrix I already have two credit cards, an AMEX and a Chase credit card. I'll go ahead and add those accounts. So I'll do accounts, new credit card, I'll do my bank is not in the list, add manual accounts. And this will be the balance that you have today. So let's say I have two hundred dollars [in] charges. and I'll rename this to AMEX. And then I want to go ahead and set the limit of the credit card inside of Quicken. So I'll go to accounts, settings, and then it'll say AMEX, description and then I'll put my credit limit as a thousand, or whatever your credit limit is. And while I'm here, I'll go ahead and do show all occurrences, in the next 12 months, this is the power of Quicken. So whenever I set my scheduled transactions, and I see my current spending, I can set my goals for the year out, so if I stick to my goals, stick to my spending, I'll know exactly how much I'll have in a year, for everything that I'm saving up, or for a certain couch, or whatever. so I'll do save, and then I'll go ahead and make another credit card account for the Chase example that I put in the payment matrix. So, accounts new credit card, my bank is not on the list, add manual accounts. I'll do 150 for this one, finish rename, Chase, accounts settings, and I'll set the credit limit to 800 for this one. And then do 12 months save. Now I'll go to HSBC savings, and I'll go to accounts, and settings, and set the future occurrences to 12 months as well. And I'll do the same thing for my checking account. Now you can make a cash account, and keep track of your cash that you withdraw. for big cash purchases this is a good idea, because later I'll show you how to attach a receipt. So for tax purposes you can just draw a report from Quicken and send it to your accountant. But that's a little too detailed for me. So I'll go ahead and make one. Let's see accounts, new, cash. And I'll say I got 50. Actually I put HSBC as a cash account. I'll go ahead and fix that now. Oh it's checking, okay so I have 50 cash in my pocket now, and then 1200 in my checking account. I'll go ahead and set the cash account to be 12 months in the future, as well and that'll make more sense. Right now. Okay so in your main checking accounts, we're going to go ahead and add all of the schedule transactions. We're also going to add the scheduled transactions from other cards because if you have all of your expenses in different accounts, like a credit card, and you have some scheduled transactions there, it just doesn't make sense, and you won't be able to track everything. So I'll show you exactly what that means. Ok, so let's say, actually I'm gonna put a little more money in my checking account as the opening balance. K, ok, so off the bat I like to rearrange the columns a little bit because of the way that I order things. Usually I put the amount first, then the date, you can do it however you want. And then I'm going to add some more columns. So I'm going to right click, and then I'm going to add tags. I'm going to take out the check number. I'm going to add memo. And then I'm gonna put the attachment in the front, okay. So let's go ahead and add our first transaction which will be our rent, on the first of the next month. So it'll be twelve hundred dollars on October 1st 2020 rent, rent. Okay. I'm going to do schedule selected transaction, so you can go to transactions, schedule selected transactions. I like to use the keyboard shortcut shift command question mark, Type in scheduled, because I hate using the mouse, and use down, and push enter, and then this dialog will come up. And we're going to go ahead and enter our bill. So I'm going to do other bill or income. I usually never do anything that's connected online because I just think it's too much in the future for me. Okay so the type is a bill, it's not income. It's going to come from the account HSBC. The amount is twelve hundred dollars. You can add a tag or memo to it if you want, and then you can put the amount here. And then it'll be monthly, starting on November 20th, and it'll end, never. Unfortunately rent never ends unless you own your house. Okay now I'm going to go to the next bill, electricity which is due on the 15th of each month. So the easiest way to do this for me, instead of doing a new scheduled transaction each time, is just to duplicate the current scheduled transaction that you just made. So okay what do I mean by that, I'm going to do command d, So I'm going to go to the scheduled transaction here, whenever there's a little clock it means that it's a scheduled transaction. And whenever you're ready to edit it you go ahead and right click and do mark as paid, or command r. What I'm going to do is I'm going to do command d, and you can see that the rent has been duplicated. I'm going to click on one of the rents, I'll push enter, and then I'll do edit all instances. To edit the schedule transaction, it's just kind of a shortcut. So this one is electricity, so ConEdison, category electricity, or utilities. You can make up any category that you want. And the the average amount is 89 dollars. I'll do save, and it says do you want to edit all instances to the series, I'll do continue. And then I'll need to change the schedule, so I'll go ahead and back up a little bit. I'll do schedule and it'll be starting on the 15th. And on the 15th day of every month ends, never. Okay and then I have, so I went ahead and started at 11/15. I'm going to go ahead and duplicate the rent 89. There we go so we're in September now so the next occurrence will be 10/ 15 for the utilities. Now let's go ahead and keep going, I'll go ahead and add the internet, Hulu and AMEX and Chase credit card. And I'll just zoom through this internet's done. Okay so for Netflix, let's say that you used your AMEX credit card, or your Chase credit card in this example to pay for Netflix. I'm going to show you how to track that in your checking account that way you can make sure to pay the credit card bill when it comes up. Okay so I'm going to put Netflix which is 12.99. due on the 10th, and then in the tag I'm going to put the name of the credit card that it's going to be be paid from, and I'll show you how I work with that later. So I'll put Chase and then I'll go ahead and schedule it to be every month. Okay and then I'll go ahead and do Hulu. And let's say this comes from AMEX I'll schedule the selected transaction, Hulu entertainment, next, monthly, cool. And then my normal credit card payments. So I'll go ahead and do new transaction, and my typical credit card payment in this example for AMEX is 40. on the 14th. and so for the category, since this is an estimated payment, I'm going to put "budget" rather than "payment" because whenever your statement comes out you can change it in the future to say "next up," And I'll show you more about that later. But in the scheduled transaction I keep, the credit card payments as a budget payment, so that whenever you run a report, it makes sense to keep your past payments different from your future budget. And I'll get more into that later I know it might be a bit confusing. And then as I add the credit card payment, since I have another account set up in Quicken, I'm going to go ahead and add the transfer column so that way whenever I make a debit from my checking account, it'll post as a credit to my credit card account. I'll show you what that means shortly right now we're just setting up the schedule transactions. I might be talking too much. Okay, so we're gonna do AMEX payment budget, and we're gonna transfer it to the AMEX card. Okay so when I do a negative debit in my checking account, HSBC, to pay AMEX, it'll show up as a credit in the credit card account. So that's what's really cool about Quicken. Whenever you make debits and you transfer it to another account to pay something off, it'll keep track. And your other accounts, so when you put something in your savings account, it'll automatically credit as a line item and you don't have to do all the double work. Stay with me, this is probably, this is good I promise. Okay one more transaction we'll do the Chase credit card. And that'll be on the 16th of the next month, and it'll be 60. so 60, 16. Chase payment, budget, and transfer to Chase as a credit. All right. Now you can see that we're really negative going into the next year. So we need to add our income. Okay so I'm going to add an average income. Or let's just say, you know I'll yeah, let's see let's add an average income, which is good, which will be paid on the 1st and 15th. Or let's say there's a let's add an average income in the U.S., which is like 60,000. 60,000 divided by 12, is 5,000 a month, so 2500 each two weeks, and we'll say after taxes 2,000. So 2,000 every two weeks, and if you make more, or less I have no judgments, or anything like that, This is just an example. Okay so, I'm going to go ahead and add my income. So I'm going to do a new transaction. I'll do plus 2000, on the first, and I'll do income, income. And then I'll schedule the selected transaction. And I'll go ahead and do next, and then for the frequency, instead of monthly I'm gonna do every, I'll do twice a month which is pretty common. So it'll be in the first and the fifteenth of every month. Cool, so now each week, we have our income, and we have our bills. So you can see where you're going to be at a year from now. Okay, the next step is to go into each of your accounts, your credit card accounts and your checking accounts, or any any way that you spend money, and insert all of the transactions that you've spent in the last 30 or 60 days. That way you can get an average of what you spend on groceries, or things from the deli, or gas, insurance, things like that, and you can create an estimate and add a little bit more, and include that, into your budget, as well and treat it as a scheduled transaction as well. You can type in your past transactions by hand, and then use Quicken to categorize them. But Quicken is a pretty popular financial tracking software so if you go to your bank or your credit card website, you can probably download your most recent transactions over the past 30 or 60 days in Quicken format, and then download that file and import it into Quicken, which is what I'm doing now as an example. So I downloaded a couple transactions, and I'm going to going to go ahead and categorize them, and then we can use the category feature to see the general estimates for each category. Okay, so this was groceries groceries too, this was business expense, once you've done this for your credit cards and your checking account everywhere that you spend money, and you've categorized the last 30 to 60 days, you can go to all transactions, then go to all dates here, and you can say, last quarter, then go to spending, and then you'll get this pie graph of all of your expenses over the year. So if I want to do actually, probably, do last 60 days. Okay, so in this stupid example I spent 98 on food in the last 60 days. So that's about 50 a month for food. So I would put 50 a month for food as a scheduled transaction in my budget for the future. So once you have your amounts, divided by, you can do over 60 days but then divide it by two. So you have an average of what you spend per month over the last 60 days, and then insert that as a new transaction as a scheduled transaction in your checking account. Wow, yes, okay, all right. So let's do a couple. I know that's probably confusing. Okay so I'm gonna do all dates, I'm going to go to HSBC and then I'm going to make some more scheduled transactions. Based off of my spending. So I'm going to do one for groceries, and I'll do 100 a month, and I'll go ahead and schedule it for every month. I'll do gas, 200 a month, and I'll do the category as budget. Schedule it. So now you have your bills, and you have your average expenses, everything that you spend money on, from now and for the rest of the year. Now let's go ahead and put in some financial goals. Let's add some savings, and what we're going to do, is we're going to push it as far as we can. So if your register says zero dollars after a paycheck, that's okay because you're saving your money, and you're paying all your bills, and you're paying all of your average expenses, groceries and gas and things like that. All of your money is being allocated towards something. So let's go ahead and add a savings goal. So I'm going to go ahead and on the 15th, I'll put 500. I'll do it as budget for the category, and I'm going to transfer it to my savings account. Okay, and then I'm gonna schedule the transaction for every month. Now this is, all of this is totally made up numbers. This is probably doesn't make sense for everybody, it doesn't make sense for me, but just an example as you can see how it works. Okay so once you put in your future financial goals, as long as this right side, right here what I'm pointing to, is black you are golden. So if I look at the savings account I can see next year I'll have fifty six hundred dollars. I wanna see how far I can push it. Okay. So I'm gonna go back to the HSBC account, and I'm gonna go to the first savings right there. This one and I'm going to push enter to edit the scheduled transaction, edit all instances, and then I'm going to try something crazy like 1200. Every two weeks, and I'm going to edit all instances. And I'll do continue, okay so for this example that's fine. Let's do something that's going to break the budget, so 2,000. Okay, still not breaking the budget. Let's do something more drastic and this is a total unreal example, so, unreal example Okay so you can see here it starts to get crazy and obviously that's way too much savings, and it's gonna eventually cause you to go negative in the future. So if you wanted to keep this aggressive goal, but do it as much as you can keep this aggressive goal, and then and then back off each month to see the most you can put into your savings, or to whatever goal that you want to buy. So okay what I'm going to do is I'm going to search for savings, and I'm going to mark all of the scheduled transactions as paid so that way I can edit each instance and not worry about the scheduling in the future, and not have to go to that dialog box each time. So what I'm going to do is, I'm going to back off the savings and make my transaction balance not be red. Okay so I'm 165 over, so I'm going to do 2500 this time. Okay, so now we're in the black. And then this time, I'm gonna do 2500 as well. Okay now we're in the black, and so on, and so on. So I'll do 2500 still, in the black I'll do 2000, and you want to leave a little extra in case something comes up. Okay, so savings I'll do 2800, 2700, you just keep working the budget until everything is black. So I'll keep going and fast forward through this part. I'll do 1000 this time, oops that 1500. Okay so I went ahead and went through the next year and I reduced my savings to make everything black again. So now I know the maximum, the maximum amount each two weeks or each month that I can save. So next month it's 500, the next is 2500, next is 2500, the next is 2000 the next is 2700, and the next is 1500. So the numbers start to fluctuate but you can see depending on the cycle of your bills, what you can actually afford, and just push it to the limit. Now let's say, um, a lot of the times what I do, is I, I want to buy something big like a couch, and that might be fifteen hundred dollars, and I'm an impulse shopper, so I wanna buy it now. Okay so I'm gonna go ahead, and let's say I, Today is the 11th so, I'm going to go ahead and say on October 11th, next month a one-time transaction, 15th from article.com, "budget". I want to buy my couch, okay so you can see that I'm gonna go red when I pay my rent so what I'm gonna do is I'm gonna back up the date to, or I'm going to push the date forward in the future to make sure that my register stays in the black. So instead of 10/15 I'm going to do 11/15 and see if that works. Maybe a little further in the future, 12/15. Okay so we're still getting some red, so what I'm going to do is I'm going to try to reduce, so maybe the month before, I'll only save 1,000. So I'm still working these monthly goals, and then that one-time transaction, so boom I can quickly scan boom, we're all in the black, so I can buy my couch let's see article.com on December 15th, and I can still meet my savings goals as long as I change it up a little bit. Another example, like let's say you want to move to another apartment and you want to see the maximum amount of rent you can comfortably afford. So let's go ahead, and I'm going to edit my savings, and I'm going to change everything to 500. So 500, 500 every month for savings and then I'm going to go to my rent, and I'm going to edit the scheduled transaction. I'm going to try to see what my maximum amount is, and push it but if it goes red I'll back up a little bit, so I'll try 3,000 a month. Okay that's too much, I'd probably you know 2800 still too much, let's try 1800 because it was 1200 originally that's a big jump. Okay so everything is in the black so let's try 2,000. Okay so basically everything into the black, so I know that I can afford a 2,000 apartment, and have my average expenses for my variable cost like gas and groceries. And if I wanted to add a car or something like that, or insurance I can always add a scheduled transaction and work my savings budget to make sure that I stay in the black. And then as I go ahead and let's say tomorrow, I buy some groceries, so new transaction I'll do 50, and I'll do t [shortcut to go to Today] Trader Joe's so let's say I go to Trader Joe's, and I go a bunch of times I'm just going to do duplicate, let's say I go and I spend like four hundred dollars at Trader Joe's, which is a crazy amount. I'm still in the black so I can afford that new apartment, and all of my future financial goals. Basically all of your new transactions that you spend every day, you can download them and add them in, and then if you go red you have to make some adjustments in the future, or let's say this couch that we just put in, it can't be fifteen hundred dollars it has to be a thousand. You know so you can have your savings goals, you can have your future goals all in your yearly projection and you can track your current spending and make sure that your future goals and your future spending all are going to be able to be paid for. All right, so let's go into the future and say that it's payday. This is how I kind of reconcile my account and keep track of everything that I've paid. So, so let's say we get the paycheck and it's actually two thousand twenty dollars and fifteen cents. I'll go ahead and insert the exact amount, and then for these bills that are gonna be on my credit card in ten days I'm gonna go ahead and make a payment for those items but because they're going to be drawn from the credit card I'll go ahead and drag them to the credit card account. So let's say it's okay so Netflix is going to come from Chase. So what I'm going to do is I'm going to select all of my transactions between now and the first paycheck, for each credit card so I only have one in this example. So I'll click on Chase I'll duplicate it and then I'll make it a payment to the Chase card Chase payment, payment, and I'll transfer it to Chase. Then I'm going to go ahead and drag the 12.99, to the Chase credit card account. So basically, I'm going to get charged from Netflix but during this paycheck I'll make a payment to the Chase card to cover the charge. So that's why I keep everything in one checking account to make sure that I keep track of all of my bills across multiple accounts. I'm going to go ahead and do the same thing for Hulu. So if I had multiple things on AMEX, what [I] would do is I would select all three, I would look at the total here 32.97. So I'd go ahead and drag it to AMEX, and then I would make an AMEX payment. There's one here. So I would do 32.97 change it to payment, from budget, because once it's actually real, I change it to payment the category and I transfer to AMEX, so the charges that'll come up on my AMEX account will be paid for. So each paycheck, I see what's going to be charged on my credit card account and I make a payment for it ahead of time, and then I drag the transactions, that were in my checking account, into the credit card account so I can make sure that the line items match to my credit card statement now whenever I make a payment to a credit card I do it online, manually, and what I usually do is I'll take a screenshot, shift command 4, boom, something like this and then I'll go to my desktop, and I'll name it the, date, AMEX. So let's pretend that this is the receipt, and then you can drag a screenshot of the receipt onto the actual item. So that's pretty cool so I know that I've paid this whenever I have a little attachment. Whenever it comes up gas and groceries in between this paycheck and next paycheck, I go ahead and just delete those items because now I know see how much money I have to spend on groceries and everything. Whenever a statement comes out for my next credit card payment, so let's go to let's see Chase payment, I'll get an email that says your actual payment is 61. 61.53 I'll go ahead and change the amount to the actual amount, 61.53. I'll change the category from budget to payments, and then I'll do a note or a tag rather, called "next up" so I know that this is the actual amount that I have to pay in the future. Whenever the statements are released as well, I usually download it as a pdf, so I'll do let's do this so we'll pretend that this is a statement, AMEX or Chase statement dot pdf, and let's say it is for 10/16. I'll do new transaction zero dollars, the date of the statement, and do Chase statement, October statement, and then I'll drag the statement inside of the zero dollar line item, and then put this inside of the Chase account. So that way everything financial is all in one place. So if I need to search for my statements for any account I can go to the search field, and type in statement, and then I can click on here, and then open the Chase statement pdf, and a quick way to just track my spending and see what I'm spending my money, on is to go back to all transactions, and just do all dates, and then I can see how much money I'm spending for each time period. So the last seven days, 14 days etc. I can get an average, and a nice pie graph of everything, that I'm spending/ I'll do one more quick example on how to do a an account that has interest. So I'll do accounts new loan let's say I take out an auto loan, I'll do my bank is not in the list, add manual account. Let's say it's fourteen thousand dollars. Okay, so I'll add the loan terms so my original balance. let's say it's fourteen thousand dollars, loan length is five years, interest rate is eight percent, um all of these details. Basically it'll calculate the interest for you, you can see the interest curve. Here how much interest you're going to be paying versus the principal of each payment over five years, how much it's going to go down. Now let's say you make a one-time huge payment I'll go to HSBC and I'll change this savings, to transfer to the auto loan. So you can see now I'm going to pay it off faster. So this original, original principal payoff is this but then the expected will be a little bit earlier. So here, not the best example but I think you get the point. If you have any questions, I can totally help you out about how to set up the account. I can't really help you out on how to, advise you best on how to spend or where to put your money, but hopefully this is a good walkthrough so that way you can make financial plans in the future This is probably the most confusing video ever but if you're in the right headspace maybe it makes sense. If you're looking to make financial goals. i=If you have any questions please feel free to email me at hello@theproductivityshop.com, or you can join my Productivity Shop slack channel at prodshop.co/slack prodshop.co/slack. Thanks so much for watching, and I hope this wasn't too confusing, but hey but hopefully it'll help you meet your financial goals too. Later, [oh my god].
Hey, what's up? Today I'm going to show you how I organize my finances. I don't know about you, but it's really hard for me to save for things, and with this plan I've created a workflow to make some future financial goals and then track my spending that I'm doing now and making sure that my current spending is keeping in mind my future financial goals. Usually I would just check my account balance and say, "Oh I have enough money", and then spend whatever was in my account. But this way I can see the cyclical nature of getting paid twice a [month] and I can make sure that my current spending considers my future plans. It's kind of a lot of day-to-day work but it's really nice knowing that when you leave the house you know exactly how much money you can spend. And if you do overspend and do some retail therapy you know that there's a way that you can work your budget and change your future spending based off your current decisions to meet your future financial goals. I'm going to use a program called Quicken. I've used it for many years. It's basically just a transaction register, where you keep track of each transaction, but you can have different accounts and transfer between them. It's really powerful. You can probably use any other financial software. The concept is pretty much the same. Maybe even Google Sheets. I haven't dived into it that much, but I really like the power of Quicken, and you can save receipts to it and things, and we'll go all over that, but um if you'd like to use another financial software go for it, but in this tutorial I'm going to be showing you what I use and how I organize my finances so I'll do this over the course of a couple videos, and this is definitely not official financial advice, I'm not a financial advisor. But this is really something that helps me just, make financial decisions and move to different apartments, and buy different things, and all the fun stuff. So it's something that I share with a lot of my friends and students, and I, I am happy to be sharing this with you today. So let's get started so if you'd like to use Quicken I definitely 100% recommend it go to Quicken.com, and you can choose for Windows or for Mac. I'll go ahead and choose for Mac and I definitely recommend getting the Deluxe version. The deluxe version has features where if you have a loan that has interest you can include the interest and you can see how much interest you're paying over time, and then you can do simulations where you increase the payments, or do a one-off payment to see how that affects um how much interest you pay and, how much money you save. It's just the most powerful one out of the three. The premier one is if you have stocks and stuff, and you're super fancy, but I'm not that fancy and I don't think ever will be but, anyway so I definitely recommend getting the deluxe version. So step number one is to get a clear picture of all of your monthly expenses. So go ahead and go to Google Spreadsheets, and I like to create what's called a payment matrix. Just basically all of the bills that I have, and all of the due dates, and all of the APRs or the Annual Percentage Rate, the interest rates basically. So I'm going to go ahead and create an example one, and I'll do name of the bill, I'll do the due date, and the amounts, and the APR, if there is one. Now if the amount is a variable, um we'll get to that, but basically you'd want to do the higher estimate. I always like to pad my bills a little bit so that way each month whenever I pay my bill it's like five dollars or ten dollars less. There's a little breathing room within the budget. So I'm going to go ahead and list out some example bills, and I'm just making some numbers up. So in this example payment matrix, I went ahead and added my rent, electricity, internet, Netflix, Hulu and my credit card payments. Let's say if I have anything that's a recurring charge on my credit card payment, as well like Netflix or Hulu, that's not automatically drafted from my checking account, or something that I don't automatically send with a check, or a self-initiated payment, I go ahead and list everything, everything that's a month-to-month expense go ahead and list here. Once I have all of my monthly expenses listed out, I'm going to go ahead and start a new file and set these transactions as scheduled transactions. So I'll go to Quicken I'll launch a new file. I'll start from scratch I'm not going to use Quicken mobile or web. I prefer to have everything on my computer. And then the first step is to add your accounts. So you can add your checking account, your savings account, your credit card account, your mortgage, a random savings. Whatever. I'm gonna add a checking account a savings account, and two credit cards, and work with that for this tutorial. You can automatically sync up your account to download the transactions automatically. I don't like to do that because it doesn't include pending transactions, so sometimes whenever I spend money on one of my accounts, it doesn't automatically show up. In my Quicken so when I add something in the future, it's just not an accurate estimate. Now there are other ways to have a download only account, and you could transfer them so you don't have to type. But I prefer to type it manually. If you'd like more information on some workarounds where you don't have to type everything manually, I'd be happy to provide more information. Just join the slack channel and I can give you some more details there, but I'll show you how to add manual accounts for this tutorial. Okay, so I'm going to go ahead and do "my bank is not on the list" and do add "manual account." I'm going to do my opening balance, so the balance that I have today. So I'll say, uh 1200. And I'll do finish. Okay and then I'll go ahead and right click on the left sidebar and do rename account. And I'll call it HSBC for example. And I'm going to go ahead and create another account for savings. So I'll go accounts, new savings, my bank is not on the list, add manual accounts. 100, finish. Rename, and I'll put HSBC savings. And in my payment matrix I already have two credit cards, an AMEX and a Chase credit card. I'll go ahead and add those accounts. So I'll do accounts, new credit card, I'll do my bank is not in the list, add manual accounts. And this will be the balance that you have today. So let's say I have two hundred dollars [in] charges. and I'll rename this to AMEX. And then I want to go ahead and set the limit of the credit card inside of Quicken. So I'll go to accounts, settings, and then it'll say AMEX, description and then I'll put my credit limit as a thousand, or whatever your credit limit is. And while I'm here, I'll go ahead and do show all occurrences, in the next 12 months, this is the power of Quicken. So whenever I set my scheduled transactions, and I see my current spending, I can set my goals for the year out, so if I stick to my goals, stick to my spending, I'll know exactly how much I'll have in a year, for everything that I'm saving up, or for a certain couch, or whatever. so I'll do save, and then I'll go ahead and make another credit card account for the Chase example that I put in the payment matrix. So, accounts new credit card, my bank is not on the list, add manual accounts. I'll do 150 for this one, finish rename, Chase, accounts settings, and I'll set the credit limit to 800 for this one. And then do 12 months save. Now I'll go to HSBC savings, and I'll go to accounts, and settings, and set the future occurrences to 12 months as well. And I'll do the same thing for my checking account. Now you can make a cash account, and keep track of your cash that you withdraw. for big cash purchases this is a good idea, because later I'll show you how to attach a receipt. So for tax purposes you can just draw a report from Quicken and send it to your accountant. But that's a little too detailed for me. So I'll go ahead and make one. Let's see accounts, new, cash. And I'll say I got 50. Actually I put HSBC as a cash account. I'll go ahead and fix that now. Oh it's checking, okay so I have 50 cash in my pocket now, and then 1200 in my checking account. I'll go ahead and set the cash account to be 12 months in the future, as well and that'll make more sense. Right now. Okay so in your main checking accounts, we're going to go ahead and add all of the schedule transactions. We're also going to add the scheduled transactions from other cards because if you have all of your expenses in different accounts, like a credit card, and you have some scheduled transactions there, it just doesn't make sense, and you won't be able to track everything. So I'll show you exactly what that means. Ok, so let's say, actually I'm gonna put a little more money in my checking account as the opening balance. K, ok, so off the bat I like to rearrange the columns a little bit because of the way that I order things. Usually I put the amount first, then the date, you can do it however you want. And then I'm going to add some more columns. So I'm going to right click, and then I'm going to add tags. I'm going to take out the check number. I'm going to add memo. And then I'm gonna put the attachment in the front, okay. So let's go ahead and add our first transaction which will be our rent, on the first of the next month. So it'll be twelve hundred dollars on October 1st 2020 rent, rent. Okay. I'm going to do schedule selected transaction, so you can go to transactions, schedule selected transactions. I like to use the keyboard shortcut shift command question mark, Type in scheduled, because I hate using the mouse, and use down, and push enter, and then this dialog will come up. And we're going to go ahead and enter our bill. So I'm going to do other bill or income. I usually never do anything that's connected online because I just think it's too much in the future for me. Okay so the type is a bill, it's not income. It's going to come from the account HSBC. The amount is twelve hundred dollars. You can add a tag or memo to it if you want, and then you can put the amount here. And then it'll be monthly, starting on November 20th, and it'll end, never. Unfortunately rent never ends unless you own your house. Okay now I'm going to go to the next bill, electricity which is due on the 15th of each month. So the easiest way to do this for me, instead of doing a new scheduled transaction each time, is just to duplicate the current scheduled transaction that you just made. So okay what do I mean by that, I'm going to do command d, So I'm going to go to the scheduled transaction here, whenever there's a little clock it means that it's a scheduled transaction. And whenever you're ready to edit it you go ahead and right click and do mark as paid, or command r. What I'm going to do is I'm going to do command d, and you can see that the rent has been duplicated. I'm going to click on one of the rents, I'll push enter, and then I'll do edit all instances. To edit the schedule transaction, it's just kind of a shortcut. So this one is electricity, so ConEdison, category electricity, or utilities. You can make up any category that you want. And the the average amount is 89 dollars. I'll do save, and it says do you want to edit all instances to the series, I'll do continue. And then I'll need to change the schedule, so I'll go ahead and back up a little bit. I'll do schedule and it'll be starting on the 15th. And on the 15th day of every month ends, never. Okay and then I have, so I went ahead and started at 11/15. I'm going to go ahead and duplicate the rent 89. There we go so we're in September now so the next occurrence will be 10/ 15 for the utilities. Now let's go ahead and keep going, I'll go ahead and add the internet, Hulu and AMEX and Chase credit card. And I'll just zoom through this internet's done. Okay so for Netflix, let's say that you used your AMEX credit card, or your Chase credit card in this example to pay for Netflix. I'm going to show you how to track that in your checking account that way you can make sure to pay the credit card bill when it comes up. Okay so I'm going to put Netflix which is 12.99. due on the 10th, and then in the tag I'm going to put the name of the credit card that it's going to be be paid from, and I'll show you how I work with that later. So I'll put Chase and then I'll go ahead and schedule it to be every month. Okay and then I'll go ahead and do Hulu. And let's say this comes from AMEX I'll schedule the selected transaction, Hulu entertainment, next, monthly, cool. And then my normal credit card payments. So I'll go ahead and do new transaction, and my typical credit card payment in this example for AMEX is 40. on the 14th. and so for the category, since this is an estimated payment, I'm going to put "budget" rather than "payment" because whenever your statement comes out you can change it in the future to say "next up," And I'll show you more about that later. But in the scheduled transaction I keep, the credit card payments as a budget payment, so that whenever you run a report, it makes sense to keep your past payments different from your future budget. And I'll get more into that later I know it might be a bit confusing. And then as I add the credit card payment, since I have another account set up in Quicken, I'm going to go ahead and add the transfer column so that way whenever I make a debit from my checking account, it'll post as a credit to my credit card account. I'll show you what that means shortly right now we're just setting up the schedule transactions. I might be talking too much. Okay, so we're gonna do AMEX payment budget, and we're gonna transfer it to the AMEX card. Okay so when I do a negative debit in my checking account, HSBC, to pay AMEX, it'll show up as a credit in the credit card account. So that's what's really cool about Quicken. Whenever you make debits and you transfer it to another account to pay something off, it'll keep track. And your other accounts, so when you put something in your savings account, it'll automatically credit as a line item and you don't have to do all the double work. Stay with me, this is probably, this is good I promise. Okay one more transaction we'll do the Chase credit card. And that'll be on the 16th of the next month, and it'll be 60. so 60, 16. Chase payment, budget, and transfer to Chase as a credit. All right. Now you can see that we're really negative going into the next year. So we need to add our income. Okay so I'm going to add an average income. Or let's just say, you know I'll yeah, let's see let's add an average income, which is good, which will be paid on the 1st and 15th. Or let's say there's a let's add an average income in the U.S., which is like 60,000. 60,000 divided by 12, is 5,000 a month, so 2500 each two weeks, and we'll say after taxes 2,000. So 2,000 every two weeks, and if you make more, or less I have no judgments, or anything like that, This is just an example. Okay so, I'm going to go ahead and add my income. So I'm going to do a new transaction. I'll do plus 2000, on the first, and I'll do income, income. And then I'll schedule the selected transaction. And I'll go ahead and do next, and then for the frequency, instead of monthly I'm gonna do every, I'll do twice a month which is pretty common. So it'll be in the first and the fifteenth of every month. Cool, so now each week, we have our income, and we have our bills. So you can see where you're going to be at a year from now. Okay, the next step is to go into each of your accounts, your credit card accounts and your checking accounts, or any any way that you spend money, and insert all of the transactions that you've spent in the last 30 or 60 days. That way you can get an average of what you spend on groceries, or things from the deli, or gas, insurance, things like that, and you can create an estimate and add a little bit more, and include that, into your budget, as well and treat it as a scheduled transaction as well. You can type in your past transactions by hand, and then use Quicken to categorize them. But Quicken is a pretty popular financial tracking software so if you go to your bank or your credit card website, you can probably download your most recent transactions over the past 30 or 60 days in Quicken format, and then download that file and import it into Quicken, which is what I'm doing now as an example. So I downloaded a couple transactions, and I'm going to going to go ahead and categorize them, and then we can use the category feature to see the general estimates for each category. Okay, so this was groceries groceries too, this was business expense, once you've done this for your credit cards and your checking account everywhere that you spend money, and you've categorized the last 30 to 60 days, you can go to all transactions, then go to all dates here, and you can say, last quarter, then go to spending, and then you'll get this pie graph of all of your expenses over the year. So if I want to do actually, probably, do last 60 days. Okay, so in this stupid example I spent 98 on food in the last 60 days. So that's about 50 a month for food. So I would put 50 a month for food as a scheduled transaction in my budget for the future. So once you have your amounts, divided by, you can do over 60 days but then divide it by two. So you have an average of what you spend per month over the last 60 days, and then insert that as a new transaction as a scheduled transaction in your checking account. Wow, yes, okay, all right. So let's do a couple. I know that's probably confusing. Okay so I'm gonna do all dates, I'm going to go to HSBC and then I'm going to make some more scheduled transactions. Based off of my spending. So I'm going to do one for groceries, and I'll do 100 a month, and I'll go ahead and schedule it for every month. I'll do gas, 200 a month, and I'll do the category as budget. Schedule it. So now you have your bills, and you have your average expenses, everything that you spend money on, from now and for the rest of the year. Now let's go ahead and put in some financial goals. Let's add some savings, and what we're going to do, is we're going to push it as far as we can. So if your register says zero dollars after a paycheck, that's okay because you're saving your money, and you're paying all your bills, and you're paying all of your average expenses, groceries and gas and things like that. All of your money is being allocated towards something. So let's go ahead and add a savings goal. So I'm going to go ahead and on the 15th, I'll put 500. I'll do it as budget for the category, and I'm going to transfer it to my savings account. Okay, and then I'm gonna schedule the transaction for every month. Now this is, all of this is totally made up numbers. This is probably doesn't make sense for everybody, it doesn't make sense for me, but just an example as you can see how it works. Okay so once you put in your future financial goals, as long as this right side, right here what I'm pointing to, is black you are golden. So if I look at the savings account I can see next year I'll have fifty six hundred dollars. I wanna see how far I can push it. Okay. So I'm gonna go back to the HSBC account, and I'm gonna go to the first savings right there. This one and I'm going to push enter to edit the scheduled transaction, edit all instances, and then I'm going to try something crazy like 1200. Every two weeks, and I'm going to edit all instances. And I'll do continue, okay so for this example that's fine. Let's do something that's going to break the budget, so 2,000. Okay, still not breaking the budget. Let's do something more drastic and this is a total unreal example, so, unreal example Okay so you can see here it starts to get crazy and obviously that's way too much savings, and it's gonna eventually cause you to go negative in the future. So if you wanted to keep this aggressive goal, but do it as much as you can keep this aggressive goal, and then and then back off each month to see the most you can put into your savings, or to whatever goal that you want to buy. So okay what I'm going to do is I'm going to search for savings, and I'm going to mark all of the scheduled transactions as paid so that way I can edit each instance and not worry about the scheduling in the future, and not have to go to that dialog box each time. So what I'm going to do is, I'm going to back off the savings and make my transaction balance not be red. Okay so I'm 165 over, so I'm going to do 2500 this time. Okay, so now we're in the black. And then this time, I'm gonna do 2500 as well. Okay now we're in the black, and so on, and so on. So I'll do 2500 still, in the black I'll do 2000, and you want to leave a little extra in case something comes up. Okay, so savings I'll do 2800, 2700, you just keep working the budget until everything is black. So I'll keep going and fast forward through this part. I'll do 1000 this time, oops that 1500. Okay so I went ahead and went through the next year and I reduced my savings to make everything black again. So now I know the maximum, the maximum amount each two weeks or each month that I can save. So next month it's 500, the next is 2500, next is 2500, the next is 2000 the next is 2700, and the next is 1500. So the numbers start to fluctuate but you can see depending on the cycle of your bills, what you can actually afford, and just push it to the limit. Now let's say, um, a lot of the times what I do, is I, I want to buy something big like a couch, and that might be fifteen hundred dollars, and I'm an impulse shopper, so I wanna buy it now. Okay so I'm gonna go ahead, and let's say I, Today is the 11th so, I'm going to go ahead and say on October 11th, next month a one-time transaction, 15th from article.com, "budget". I want to buy my couch, okay so you can see that I'm gonna go red when I pay my rent so what I'm gonna do is I'm gonna back up the date to, or I'm going to push the date forward in the future to make sure that my register stays in the black. So instead of 10/15 I'm going to do 11/15 and see if that works. Maybe a little further in the future, 12/15. Okay so we're still getting some red, so what I'm going to do is I'm going to try to reduce, so maybe the month before, I'll only save 1,000. So I'm still working these monthly goals, and then that one-time transaction, so boom I can quickly scan boom, we're all in the black, so I can buy my couch let's see article.com on December 15th, and I can still meet my savings goals as long as I change it up a little bit. Another example, like let's say you want to move to another apartment and you want to see the maximum amount of rent you can comfortably afford. So let's go ahead, and I'm going to edit my savings, and I'm going to change everything to 500. So 500, 500 every month for savings and then I'm going to go to my rent, and I'm going to edit the scheduled transaction. I'm going to try to see what my maximum amount is, and push it but if it goes red I'll back up a little bit, so I'll try 3,000 a month. Okay that's too much, I'd probably you know 2800 still too much, let's try 1800 because it was 1200 originally that's a big jump. Okay so everything is in the black so let's try 2,000. Okay so basically everything into the black, so I know that I can afford a 2,000 apartment, and have my average expenses for my variable cost like gas and groceries. And if I wanted to add a car or something like that, or insurance I can always add a scheduled transaction and work my savings budget to make sure that I stay in the black. And then as I go ahead and let's say tomorrow, I buy some groceries, so new transaction I'll do 50, and I'll do t [shortcut to go to Today] Trader Joe's so let's say I go to Trader Joe's, and I go a bunch of times I'm just going to do duplicate, let's say I go and I spend like four hundred dollars at Trader Joe's, which is a crazy amount. I'm still in the black so I can afford that new apartment, and all of my future financial goals. Basically all of your new transactions that you spend every day, you can download them and add them in, and then if you go red you have to make some adjustments in the future, or let's say this couch that we just put in, it can't be fifteen hundred dollars it has to be a thousand. You know so you can have your savings goals, you can have your future goals all in your yearly projection and you can track your current spending and make sure that your future goals and your future spending all are going to be able to be paid for. All right, so let's go into the future and say that it's payday. This is how I kind of reconcile my account and keep track of everything that I've paid. So, so let's say we get the paycheck and it's actually two thousand twenty dollars and fifteen cents. I'll go ahead and insert the exact amount, and then for these bills that are gonna be on my credit card in ten days I'm gonna go ahead and make a payment for those items but because they're going to be drawn from the credit card I'll go ahead and drag them to the credit card account. So let's say it's okay so Netflix is going to come from Chase. So what I'm going to do is I'm going to select all of my transactions between now and the first paycheck, for each credit card so I only have one in this example. So I'll click on Chase I'll duplicate it and then I'll make it a payment to the Chase card Chase payment, payment, and I'll transfer it to Chase. Then I'm going to go ahead and drag the 12.99, to the Chase credit card account. So basically, I'm going to get charged from Netflix but during this paycheck I'll make a payment to the Chase card to cover the charge. So that's why I keep everything in one checking account to make sure that I keep track of all of my bills across multiple accounts. I'm going to go ahead and do the same thing for Hulu. So if I had multiple things on AMEX, what [I] would do is I would select all three, I would look at the total here 32.97. So I'd go ahead and drag it to AMEX, and then I would make an AMEX payment. There's one here. So I would do 32.97 change it to payment, from budget, because once it's actually real, I change it to payment the category and I transfer to AMEX, so the charges that'll come up on my AMEX account will be paid for. So each paycheck, I see what's going to be charged on my credit card account and I make a payment for it ahead of time, and then I drag the transactions, that were in my checking account, into the credit card account so I can make sure that the line items match to my credit card statement now whenever I make a payment to a credit card I do it online, manually, and what I usually do is I'll take a screenshot, shift command 4, boom, something like this and then I'll go to my desktop, and I'll name it the, date, AMEX. So let's pretend that this is the receipt, and then you can drag a screenshot of the receipt onto the actual item. So that's pretty cool so I know that I've paid this whenever I have a little attachment. Whenever it comes up gas and groceries in between this paycheck and next paycheck, I go ahead and just delete those items because now I know see how much money I have to spend on groceries and everything. Whenever a statement comes out for my next credit card payment, so let's go to let's see Chase payment, I'll get an email that says your actual payment is 61. 61.53 I'll go ahead and change the amount to the actual amount, 61.53. I'll change the category from budget to payments, and then I'll do a note or a tag rather, called "next up" so I know that this is the actual amount that I have to pay in the future. Whenever the statements are released as well, I usually download it as a pdf, so I'll do let's do this so we'll pretend that this is a statement, AMEX or Chase statement dot pdf, and let's say it is for 10/16. I'll do new transaction zero dollars, the date of the statement, and do Chase statement, October statement, and then I'll drag the statement inside of the zero dollar line item, and then put this inside of the Chase account. So that way everything financial is all in one place. So if I need to search for my statements for any account I can go to the search field, and type in statement, and then I can click on here, and then open the Chase statement pdf, and a quick way to just track my spending and see what I'm spending my money, on is to go back to all transactions, and just do all dates, and then I can see how much money I'm spending for each time period. So the last seven days, 14 days etc. I can get an average, and a nice pie graph of everything, that I'm spending/ I'll do one more quick example on how to do a an account that has interest. So I'll do accounts new loan let's say I take out an auto loan, I'll do my bank is not in the list, add manual account. Let's say it's fourteen thousand dollars. Okay, so I'll add the loan terms so my original balance. let's say it's fourteen thousand dollars, loan length is five years, interest rate is eight percent, um all of these details. Basically it'll calculate the interest for you, you can see the interest curve. Here how much interest you're going to be paying versus the principal of each payment over five years, how much it's going to go down. Now let's say you make a one-time huge payment I'll go to HSBC and I'll change this savings, to transfer to the auto loan. So you can see now I'm going to pay it off faster. So this original, original principal payoff is this but then the expected will be a little bit earlier. So here, not the best example but I think you get the point. If you have any questions, I can totally help you out about how to set up the account. I can't really help you out on how to, advise you best on how to spend or where to put your money, but hopefully this is a good walkthrough so that way you can make financial plans in the future This is probably the most confusing video ever but if you're in the right headspace maybe it makes sense. If you're looking to make financial goals. i=If you have any questions please feel free to email me at hello@theproductivityshop.com, or you can join my Productivity Shop slack channel at prodshop.co/slack prodshop.co/slack. Thanks so much for watching, and I hope this wasn't too confusing, but hey but hopefully it'll help you meet your financial goals too. Later, [oh my god].
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