Three Reasons to Build a Financial Database
It’s no secret that I’m a big (huge!) fan of keeping close track of our finances. In fact, I’ve been tracking and balancing our accounts in Quicken (and now Moneydance) since January 1st, 1997. The end result of my efforts has been the production of a relatively massive database containing our detailed financial history.
Today I want to share with you three reasons why I’m thrilled to have this resource at my disposal…
Keeping yourself on track
I first started tracking our finances so I could chart our progress. I’ve never been a big fan of budgeting – hence our decision to follow a “reverse budget” – but the data that I’ve collected has been invaluable when it comes to showing us exactly where we stand, whether or not we’re headed in the right direction, etc.
Finding info in a snap
A less obvious benefit of having a financial database such as this is that I can now look up a wide variety of information in a snap. It’s really amazing what you can deduce from your checking account register, especially if it’s digitized and searchable.
Some examples:
Earlier this year, my wife needed to know how much we paid for Taekwando lessons last summer. I happened to be sitting at my computer as was able to provide her an answer in less than ten seconds.
I couldn’t remember when we had our water heater installed – and hence when it was due to be drained. I know we have the paperwork somewhere around here, but I’m not sure where. Fortunately, the answer was just a quick search away – I was able to dig up the payment info in a matter of seconds.
When we moved here back in 2006, we hired a guy to re-assemble our backyard playset. Recently, a friend was looking for someone to do that same. I fired up Quicken and had the guy’s name in no time flat.
Nostalgia
And finally… I discovered earlier this week while migrating our data to Moneydance that having this sort of financial history is great for nostalgia’s sake. As I paged through our account history, I was reminded of all kinds of fascinating and wonderful things…
How little I earned (and how cheaply we lived) when we were first starting out, the shockingly high CD rates that we used to get, the wonderful trips that we’ve been on, when and where our kids went to preschool, and so on.
It really was fascinating – and fun – to sift through the data. Having a detailed financial history such as this is a bit like having a detailed (albeit passive) journal of our life.
Disclaimer: Discover is a paid advertiser of this site.
Reasonable efforts are made to maintain accurate information. See the Discover online credit card application for full terms and conditions on offers and rewards.
Modified on July 21st, 2011 - 6 Comments
Filed under: Miscellany
About the author: Nickel is the founder and editor-in-chief of this site. He's a thirty-something family man who has been writing about personal finance since 2005, and guess what? He's on Twitter!
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6 Responses to “Three Reasons to Build a Financial Database”
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July 15th, 2011 at 11:27 pm
I think all of us should keep track of our expenses. That way, we’ll get to know what is our pattern of expenses and if there’s any change, that’ll help a lot to study it and plan accordingly.
July 16th, 2011 at 11:12 am
I really appreciate your review of the different financial options. I am interested in options that include the ability to invoice clients. I noticed that Moneydance does not include this,but GnuCash does. Would you also review some of the alternatives that offer invoicing features?
July 17th, 2011 at 5:30 am
I agree with the nostalgia. It’s really fun to look through the data. Indeed, it’s a journal of your life.
July 18th, 2011 at 3:50 am
One of the best reasons for me is the finding of information. I hate having to have to dig through a box of old receipts to find if my computer is still under warranty or not. I\’m still new at keeping a database so I still have alot of unorganized financial stuff, but I pretty much immediately noticed the benefits once I started.
Good Post
July 18th, 2011 at 2:31 pm
Hi Renee: I’ve found what I need in Moneydance, so I won’t be looking further. I don’t need invoice functionality, so I can’t comment on that. What I can tell you is that I tried SEE Finance and found that the import was an absolute mess. I’ve heard others say that it’s quite good at importing, so ymmv. Also, wrt GnuCash, my understanding is that it doesn’t support specific ID of tax lots (useful for tax loss harvesting) so I looked at Moneydance first and was satisfied. Good luck!
July 19th, 2011 at 4:31 pm
I love data too but I\\\’ve kind of fallen off the data collecting bandwagon lately. I\\\’ve decided that for 2011, I\\\’m shooting from the hip a bit and I\\\’ll get back to responsible data crunching next year.