Do you use a checkbook?

Question

Maybe a silly question but personally write out details of purchases in a checkbook then transfer to Quicken then at tax time fill in accountants worksheet.

The GF is in an office that is going paperless and she thought my paperwork was a bit much, although she admitted they are currently doing the same thing.

Did the smart phones and scanning devices make a checkbook obsolete?

Aaron McGinnis · Answer

What is this "Hand written check" of which you speak?

I write several dozen checks a week. Trying to do them all by hand was a tedious, time-consuming job that I was all too happy to jettison in favor of printed checks.

If I really, REALLY have to I can still grab a printable check and fill it in by hand... but I feel like great-great grandpa Ugg the cave man banging two rocks together when I do that.

I also try and pay as many bills as I can online. Chase bank has both a direct-deposit and a mail-out bill payment system that make my life a lot easier.

Page Huyette · Answer

Here's the long version.  For the short version, skip to the second to last paragraph of this post:

The theory behind YNAB is that you give ever single job a dollar, so everything is accounted for (even wild hair money).

For example, a paycheck you get from your day job might be entered into the register as “income available for November.”  You then assign each dollar from that paycheck a job:  $900 to your mortgage, $200 to utilities, $150 for dining out/entertaining, $50 for blowing wherever you'd like, and so on.  Until there's nothing left on the table.  Prior to assigning dollars, you've estimated what you need to spend on each category each month.

In the same budget, you might have a grouping of categories for a rental property.  When you receive your rent, say $900, instead of that being set as “income available for November” it would be allotted to $400 for mortgage, $120 for taxes, etc.

When you incur an expense, whether personal or for an investment, it gets put in the register (just like in Quicken or similar programs).  You can see how much money you have left after you've categorized it against what you've budgeted, or in the case of other categories, how much savings you're building towards a repair or upgrade for a property.

If you overspend, the amount is taken out of the next month's available balance, leaving you to make it up by spending less in whatever categories you choose.  If you've underspent, hopefully you've allotted that money to a savings category, otherwise it rolls over to income available for the next month.  Each dollar always accounted for in some way.

The other idea behind YNAB is to get to the point where you are living off last months income, which can come quickly to some or take some time, depending on where you are.  This holds true for rental properties as well as personal expenses.  Once you have a clear idea of how much you spend each month, you might start allotting an amount out of each check or windfall towards the rainy day fund.   Dave Ramsey has a similar approach, but I believe he works towards having just $1000 stashed.  A lot of people on the YNAB forums seem to have started with Ramsey's approach, and then moved on to this one.

This may seem like no-brainer stuff to number crunchers, but to the more creative types who struggle with managing their money and investments, I think this is the way to go.

Also, their forums are stellar.  Fast and responsive, and just as positive and supportive as the BiggerPockets.com forums.  People who use this system are passionate about it, and they are more than willing to help you along.

How has it changed my life?  In my wild youth before kids, property and responsibility, I was never good with money, didn't get how to budget.  Always worked in fields where I had plenty to play with (relatively speaking), so I didn't worry so much.  I tried standard budgeting, but it always seemed like you were asked to set a budget and then live within it.  I didn't get it (I was an English major).  If I didn't get the numbers right when I was putting together the budget, I was always behind the eight ball either feeling like a failure or just giving up on the whole budgeting idea and leaving it behind for a stab at it another time.  With YNAB, you can see exactly where your money is going, where you need to spend more or less.  Its all right there.  No judgement.

As a result of using this program, money is no longer a mystery to me.  It also removes the purse strings responsibility if you are living/working with a partner, since everything is right there.  I also use it for my kid's allowances, and they can track how much they have, what they've spent money on.  It helps them to understand how quickly money vanishes if you don't spend it with care.

Told you this was the long version.

Jeff S. · Answer

Page Huyette looked at the website looks interesting and fun. Personally just use Excel for tracking personal expenses. Do you use this for your rentals? Is it hooked up to your smartphone too?

How has it changed your life?

Page Huyette · Answer

I use my bank billpay as much as possible, but also rely completely on YNAB (You Need a Budget) to track all transactions either from my desktop or mobile device, immediately putting it into the proper ledger.  Their software has changed my life--no kidding!

Jeff S. · Answer

It looks like most of us are comfortable writing details in a check register. I used to estimate jobs with a contractor partner so have a habit of writing out details. If done on a larger scale am sure I'd move towards Kyle Meyers and Bill Gulleys way of operating.

Kyle Meyers · Answer

I do not use paper check register. I just record everything in Quicken. Most payments are done through online bill pay, but some contractors get a paper check when the complete the job and I just record it in Quicken when I get home.

Rob K. · Answer

My brick guy is named Jose and he won't take a check. I pay him in cash.

If I'm dealing with someone new, I will write them a check as soon as the job is done. Most of the people I deal with are regulars. They go do a job, email me an invoice, and I send them a check using the online bill pay. Super easy.

Bill Gulley · Answer

I printed checks and it was entered in the A/P, that's about as high tech as we got and that was years ago.

Luis has a point, but, I tell them to go to the office and get paid that it is a business, I'm not Harry Homeowner. When you know a job will be finished you can always take the checks with you to the site and pay people.

You can also have another book, take a check shopping write it out and enter it later on and not print another check. The check numbers will be off but we didn't sort by number anyway.

Luis A. · Answer

I am all up for online billpay but the reality is that when Jose the landscaper is done he needs a check then and there. "I'll send you a check" won't cut it...

Rob K. · Answer

I have free online bill pay at my bank. I have payments set to automatically go out and then I have other payments where I just type in the amount and hit the pay button. It's super easy and I don't have to buy stamps. If I need to pay someone new, it takes less than a minute to set them up in my account and pay them.

I still use the checkbook register to keep track of my balances and payments. I record every expense for each property in Excell spreadsheets that I have used for years.

Online bill pay is definitely the way to go. My hand used to get cramped writing out checks. I was like Jerry Seinfeld in that episode where he kept getting checks for 12 cents each that he had to sign.

Do you use a checkbook?

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