Saturday, November 17, 2007

Mortgage Escrow

I got a notice in my E-Mail about Escrow activity happening on my account. I take a look and it appears that my annual Homeowners Insurance premium of $720 was paid. I love the fact that I don't have to worry about paying these bills, even if it means that I have an opportunity cost by keeping the money in the escrow account. The one problem I have with this payment is that two weeks ago there was another Homeowners insurance payment of $720 deducted.

This is the first time that this has happened, so I will give them a chance to resolve it. However, if this becomes a trend rather than a rare occourance, I believe that I may be in for some very frustrating times. I sent in a request for information on those transactions, we'll see what I hear.

Thursday, November 8, 2007

GnuCash

So after trying to use Quicken in a Virtual Machine and having problems with it, I decided that I needed a new accounting program. I preferred one that was native to Linux as that is my Operating System of choice . I decided that I would try GnuCash (http://www.gnucash.org) which is also available for Mac OS X. Setting up my accounts in Gnucash took about 20 min or so, and was not hard to understand. The biggest change from quicken was that Gnucash uses accounts where quicken uses categories. So now instead of all my gas transactions being in a category of Auto:Gas, they are recorded to the Auto:Gas expense account.

These Expense accounts (There are income accounts that behave similarly) basically represent another entity's books so that I can place the other half of my double entry into their "books". While this is a little confusing at first, I figured out that if I thought of those accounts as the accounts receiveable for another person, that account was essentially a joint account used only to transfer money. That helped me get used to the change.

Right now the program looks promising. I plan on trying it for at least a couple months to see if it will work for me. The one thing that I can't budge on is that it must be able to accurately import all the .QIF files that I download from my institutions, as I don't normally type any of my data in, I download it from my banks, and double check the data as I'm importing them. Because I am the only one that uses my accounts, and I don't have that many transactions, as I tend to spend a lot of money in few transactions, I can usually remember everything I did in the last month by looking at where the money went and how much it was.

For me, keeping records of my finances is my one HUGE downfall. I hate it with a passion. I hate records, I hate to organize (although I do like an organized space, I just don't want to do it.) and I hate double checking everything just so that I can look back later and say "Wow! I filed that!" I'm hoping an easy to use program will help alleviate some of my pain.

Is there anybody else out there that uses GnuCash? any hints for someone just starting out with the program?

Saturday, November 3, 2007

Online Personal Finance Blogs

I have been reading different blogs online and have notice that most of them fall into two categories: "Pay off Consumer Debt" or "Increase your Current Capital".

This is all fine and dandy, but it sometimes makes me feel like I'm in the middle ground. I never got into much debt (I agonized for months about taking out a $5000 student loan), but I don't yet have capital to push for higher and higher gains.

The place where I do find the most knowledge to apply is in the Frugal blogs. While I don't consider them pure personal finance blogs, they fill that empty gulf between paying off debt and investing. They are the step that needs to be taken throughout all three phases of a person's financial life, and the only step that I feel applies to my current phase.

In that Respect, here's a couple of blogs about Frugality:

Frugal for Life
Live Frugal

and lastly, the Frugal Hacks site:

Frugal Hacks

Remember: Living below your means is the key; not necessarily to wealth, but definitely to financial security.

Thursday, November 1, 2007

Financial Statements by Thomas Ittelson



I have started Reading Financial Statements (affiliate link) by Thomas Ittelson. I will review each chapter as I read, and discuss what I liked, disliked and learned from each chapter.

Chapter 1


Chapter 1 covers the 12 basic principles:

1. the accounting entity
2. going concern
3. measurement
4. units of measure
5. historical cost
6. materiality
7. estimates and judgments
8. consistency
9. conservatism
10. periodicity
11. substance over form
12. accrual basis of presentation

This chapter gives a basic definition of each, and explains why the principle was adopted. While this chapter reads more like a dictionary than anything else, the author does a good job of making the reasoning behind each principle clear while not going into too much detail.

The ease of reading this chapter gives me hope that this book will make understanding Financial Statements a breeze.

Looking through the table of contents, most of the chapters are around 25 pages in length and I think will make for nice small chunks to digest. If you follow along in the book with this series, please comment with your thoughts.