2008-08-04

My Personal Finance One Step, Two Step

Can I Get Rich On A Salary was tagged with Mrs. Micah’s Single Step Personal Finance Challenge meme by Andy S. of $aving to Invest. (Check out the tagging post: Single Step Personal Finance Challenge- Roth IRA. Plus a Trifecta of Hundreds!). The general idea is:

Find one step you can take to make your financial system better or more organized.
I’m going to shuffle my feet and talk first about the one step that I’m going to undertake in the near term—and briefly mention two runners-up.

The first step was fairly straightforward to identify, because I’ve let a problem languish longer than I should have—so it’s very obviously at the top of my to-do list now. I need to: regain access to our Quicken software.

Essentially, technology is wonderful and evil. We track and run most all of our finances using the Quicken software—including paying most of our bills through Quicken. This translates into fairly good organization with the ability to assess our finances in a lot of different ways through the software’s functionality. We back up the data files frequently, so we have somewhat protected against a data-loss disaster.

But we are currently not able to use the software. We have one desktop computer and one laptop computer—and we are not currently able to use Quicken on either. The desktop computer is running Windows Vista, and trying not to bore you with all the details, there is a glitch in compatibility. So we were running Quicken primarily off the laptop. And the laptop now has a problem in that it freezes up. (It’s just a year and a half old—quite disappointing.)

So my “one step” is some combination of fighting through the compatibility glitch with Vista so I can get Quicken running on our desktop and getting the laptop fixed. (For a parallel situation, check out another personal-finance blogger’s post for the Single Step Personal Finance Challenge involving making up for the data loss he suffered when his computer went down: My Microsoft Money Is Bigger Stronger Faster (at Life, Liberty, and the Pursuit of Money).)

Now if you don’t run Quicken and aren’t interested in moving your finances over to Quicken or a similar application, this has been a particularly boring post. So here are my two runners-up, which are at least potentially less boring for a wider audience.

First, I’d like to figure out a better way of tracking the diversification of our investments. For some reason, I had not had great success doing this on Quicken, either because it doesn’t support it well or because I haven’t figured out that functionality. Perhaps I need to upgrade to a more-current version, because part of the problem there was that it was not classifying ETFs in the way I’d like. At one point, I tried putting everything on an Excel spreadsheet with my manual classifications into things like asset class, capitalization (e.g., large cap, midcap, or small cap), style (e.g., growth, value, or blend), and industry sector. That worked well enough to give me a fairly good snapshot, based on which we made some adjustments to our automatic saving and investment plans. But it’s not a great tool going forward, because it’s currently set up so that I have to any updating of it manually. Do you have a way of doing this that you particularly like?

Second, I’d like to take a closer look at our investment expenses, particularly for our ETFs and mutual funds. I am pretty comfortable that the expenses are reasonably low and have paid some attention to them along the way. But I think there may be some ways to lower them further. This step is just going to take a good amount of time and research though.

As part of perpetuating the meme, I’ll tag Heather Allen of The DebtFree Playbook Blog — write along if you’d like, though no obligation, of course.

What about you? Is there one step that you can and should take?


[Editor’s Note: If you’re unfamiliar with what a blog meme is — and care to read more — check out: What is a Blog Meme? (at ChrisG); Blogging 101 - The Blog Meme (at QuixtarBLOG); Internet meme (at Wikipedia).]

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