Most people today; get paid by direct deposit; have given authorization to various organizations to automatically remove money from their bank account for car payments, mortgage payments, life insurance payments; withdraw cash from ATM’s multiple times per week and pay for goods and services using their Interac card.
As you can imagine these are a lot of transactions to keep track of. Yes we have access to on-line banking or telephone banking however if you don’t record all these transactions how does one really know how much money is in their bank account and where it is going? Has that post dated bill payment been deducted from the balance I see in my account?
If we reflect back to the cheque world we were all provided with a “Transaction Register”. This was that little book with lots of pages where you recorded the balance of your account, you wrote down all the cheques and all the pre-authorized debits as well as any cash you withdrew from your account. Once upon a time we actually balanced our bank account to this register, another process that seems to have gone by the way side.
The “Transaction Register” is actually still available today, but only if you use cheques. If you don’t order cheque you don’t get one of the best little budgeting tools we once had.
When we meet with clients to talk about where they spend their money we often times get this blank look on their face. It is very difficult for them to answer simple questions like how much they spend on food, gas or clothing. They simply keep spending until there are no funds left in their account. They could go on-line and review the transactions but they just don’t do it.
If a person were to record the incoming and outgoing funds in a “Transaction Register” they would easily be able to review the information. This old process as some people call it was a simplified budgeting process.
In today’s world this budget process needs to be extended so that people understand exactly what they are spending money on. But even before you get into real budgeting I would suggest that you go back to using or start using the “Transaction Register”.
Start keeping track of the following:
1. Record all payroll deposits.
2. Record all cash withdrawals and Interac purchases.
3. Record your mortgage payments, car payments etc.
4. Record all other pre-authorized debits and the date they will come of out your accounts.
5. Record the bills you pay Internet or telephone banking.
This may seem very basic to some however the majority of people are not doing it and are having trouble figuring out where all their money is going. So go ask your financial institution for a transaction register and start recording today!
Brian Denysuik is President & CEO of Creditaid, an independent, Canadian Credit Counselling service in Winnipeg, Manitoba, Canada. See them on-line at http://www.creditaid.ca or give them a call at 204-987-6890.
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