Where Did It Go?: Taking the Mystery (and Pain) Out of Managing Your Money

October 11, 2016 Scott Sanders
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Most people will quite literally earn millions of dollars in their lifetime. Yet many people struggle financially and live from one pay period to the next.

With the aging population and many Baby Boomers now continuing to work—at least on a part-time basis—past the traditional retirement age, people are working more years than ever. Even if a person works only 40 years, at average earnings, that’s a lot of money.

It is said, “Money talks”, but for many, all it ever says is, “Hello, and Good-bye”.

Have you ever found that the month lasts longer than the money? Or have you ever got your tax return and looked at all the money you have earned over the past 12 months and then thought, “Where has it all gone?”

You’re not alone. And the good news is, now there’s a simple solution.

There’s a great quote from Charles Dickens’ book David Copperfield where the character Mr. Micawber says to Copperfield, “Annual income twenty pounds, annual expenditure nineteen nineteen and six, result happiness. Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery.” This quote is known as the Micawber Principle. We could rewrite the quote to say, “Annual income one hundred thousand dollars, annual expenditure ninety thousand dollars, result happiness. Annual income one hundred thousand dollars, annual expenditure one hundred ten thousand dollars, result misery.”

This is so true, regardless of the income level. We must live within our means.

Yet keeping track of what you spend your money on, for many, is too hard, too laborious. The benefits of doing so are obvious to anyone, yet the discipline to keep all your receipts, enter the information into a program, and keep that going consistently over time is beyond most of us.

Well … and here’s the good news … what if a piece of software could track and categorize what you spent your money on, but it involved very little effort by you?

Imagine the clarity you’d get if you knew exactly how much you have spent and what percentage of your income is going on the various areas including mortgage/rent, vehicles, groceries, schooling/education, eating out, entertaining, mobile phones and internet, medical and pharmaceutical, and so on.

For most people, it would be a real eye opener.

It is said that knowledge equals power.

That is very true when it comes to your personal finances.

Once you can objectively see exactly how your lifestyle and your habits—that is, you—are spending your money each year, and month-to-month as you go, you then have the power to make decisions on where you can change your spending (and saving!) habits.

In this information age and electronic era, many of us use credit cards, debit cards and EFT when buying things. We have now reached a point for the first time in history where more money is exchanged electronically than through cash transactions.

That’s a lot of transactions. And it’s a lot of data.

This data is available to be analyzed on a societal basis, industry basis, business basis and … a personal basis.

And that’s where a brilliant tool comes into play: Xero Cashbook

Here’s how it works …

Xero Cashbook is online software. It’s the non-tax-tracking version of the Xero software used by businesses.

It analyzes and categorizes all your electronic transactions to give you a snapshot of your complete financial position in an instant. This also organizes a view of all your bank accounts and credit card accounts in one place. Very handy.

This is precisely what a lot of people have been waiting for: An easy way to track and control your finances.

Xero Cashbook categorizes your spending and saving, so you can tell whether your money is being used for essentials or you’re splurging on other things.

If you are concerned about security, Xero protects your financial data with 128-bit SSL encryption, the same as online banking. Your data is well protected.

You can also invite people you trust, such as your spouse, accountant or other financial advisor, to access your Xero reports for free. This means that as your advisors we can see the true picture of your finances and spending habits, and help you stay on track.

This allows us to help you plan ahead and make the most of your money.

You will never before have felt so in control of your personal finances.

Being web-based, rather than being stuck on one computer like traditional software, you can access Xero from home, work and even on your smartphone such as an iPhone or Android device.

If you’d like us to step you through getting set up with Xero Cashbook, or their Xero equivalent for Business, or both, get in touch and we’ll walk you through the process. It’s not difficult, and once your bank accounts are set up, it happens automatically from there.

The way we see it, the more clients we help keep track of their finances in such an easy way, the more clients who will prosper and find financial happiness instead of financial misery like Dickens’ Mr. Micawber. Micawber struggled financially through much of the book. He moved from England to Australia and had a fresh start and became successful financially. We can have a fresh start today as well.

Your next step … Call us at (205)313-6490 or email us at scott@sandersaccountingfirm.com to discuss your options.

It’s time to stop saying “good-bye” to so much of your money each year!