5 Ways to Get Started with Personal Bookkeeping - Feature (1)

5 Ways to Get Started with Personal Bookkeeping

When it comes to personal bookkeeping, people make it more complicated than necessary. Bookkeeping doesn’t mean having binders and binders worth of financial details. It simply means keeping track of your personal finances – whichever way works best for you.

The thing is, we all need to keep track of our finances, so bookkeeping is something we all should get comfortable with. Not sure where to start? Don’t worry, I got you covered! Check out 5 ways to get started with personal bookkeeping so you can keep track of your finances and stay as organized as possible!

5 Ways to Get Started with Personal Bookkeeping

#1 Find a method that works for you (software, spreadsheet, notebook, checkbook register)

The beauty about bookkeeping is that there isn’t a one-size-fits all approach. It’s a matter of finding the method that works best for you. Your options for bookkeeping include software (like Quicken), spreadsheets (DIY or purchased), a physical notebook, or your checkbook register.

The point is to find a method for tracking your financial activity and stick to it. We want to make sure you’re keeping a constant eye on what’s coming into your account and what’s coming out of your account. As long as you can master that on a consistent basis, then you’ve mastered personal bookkeeping!

#2 Dedicate a specific day each week to keeping your books

I personally track my spending (aka keep my books) every few days. I recommend people new to budgeting or people with a lot of spending activity to track every 1-2 days. The more time in between keeping your records, the more tedious the exercise becomes. Trust me, that tedium can result in you not keeping your books period.

If 1-2 days seems too much, opt for once a week. Decide on the best day and time each week to keep your books, then set up calendar reminders. Eventually it will become second nature, but until then, we need to do everything in our power to make the habit last. When you do decide on your day/time, make sure to set the mood! Have your cup of coffee and a candle going.

#3 Digital makes things easier (view bank activity versus keeping receipts)

There’s nothing wrong with old-fashioned paper receipts! The only problem is that paper receipts can get lost, destroyed or mis-tracked. If physical bookkeeping has been a previous practice of yours, no need to fix what isn’t broken. However, going digital with your tracking and bookkeeping efforts tends to be easier.

Because everything digital is easily accessible, you avoid the risk of double-counting or losing track of financial activity. If you haven’t decided on a bookkeeping and tracking approach, I’d recommend starting with digital and see how that works for you. You can use your bank and credit account activity as your reference point.

#4 If you’re a business owner, keep personal and business finances separate

One of the biggest mistakes I see in new AND seasoned business owners is that the merge their business and personal finances. This is a bookkeeping nightmare! It also make tax-time a lot less pleasant. While it may be hard to undo this behavior if you’ve already started, it’s an absolute necessity.

Start by making sure you have separate bank accounts for business and personal. From there, make sure all business financial activity happens in the business account and all personal financial activity happens in the personal account. Once you have them separated, you can use software to help you keep track of your books. I personally use QuickBooks and I love it!

#5 Have a process for storing other records

My final tip to help you get started with personal bookkeeping is to have a storage and organizational system for storing other financial records. This could include information on donations, investments, job benefits and more. Check out the articles How to Set Up a Financial Filing System and Your Guide to Organizing Financial Documents for some in-depth guidance.

I promise you, having the process set up now will make your life so much easier. Not just a tax time, but when you’re ever in a hurry and need to find a financial document fast! You’ll thank me later!

See, that wasn’t so bad! Embrace bookkeeping for what it is – your system for managing your financial details and records. Getting into the groove of bookkeeping will make your life so much easier, not to mention tax time! Stressing about taxes will be a thing of the past. Do you have any tips for bookkeeping? Drop a comment below to share!

The CGS Team



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