Ben, at CollegeStartup has written on the importance of keeping track of one?s money. Frankly, I agree with him. Many students aren?t sure how much money they have at any given moment. But that?s alright because those same students typically never have more than $200 in the checking account anyway! Seriously, though. That?s a problem. I?ve been using Microsoft Money for a few years now and couldn?t be more pleased. I actually was a beta tester for Money 2005 and I still use today becuase a) I got it for free and b) I?m most familiar with it.

My point is, it?s important for students to get this kind of software and start looking at how much they?re really spending. With online banking it?s easier than ever. Money will download all my account information for Wells Fargo, Vanguard, IndyMac Bank, my Sears card and even PayPal. What does that mean? Just the mere fact that I can see the value of all my assets at a quick glance.

I personally suggest Microsoft Money becuase I love a lot of the reporting.

• Spending by Category answers: How much is spent on what? Where are you spending the most money?
• Montly Income and Expenses answers: How much did I spend/receive in these categories as compared to past months? How much am I spending and saving in these months?
• Spending by Category Comparison answers: Am I spending more or less in certain areas? What is the difference between this month and the last 3 months? 6 months?
• Monthly Reports answer: What does this month look like compared to last? In a few summarized statements, how have I changed my spending or saving patterns? How has my networth changed? What is my projected cash flow based on previous trends?
• Account Balance History answers: How have the balances of all my accounts changed? Is there an upward or downward trend? Do I have more saved now than I did in the past?

Keep in mind that not all of the reports may be apply to you. If you don?t have any investments, your asset allocation is of no use. If you have only started using Money last week, then monthly reports won?t even exist yet.

But, I really like Money becuase it simplifies the act of entering things into the register. For example, Money starts ?remembering? transactions for me. When Wells Fargo downloads a transaction from ?Qdoba? it automatically fills in ?Meals: Dining Out? under the category and all I have to do is reconcile (Accept) the transaction into the register. If I enter a check to my landlord for a certain amount, Money checks to see if this was the rent bill I had scheduled.

Ben, to answer your questions: I don?t think there?s an easier way than reconciling your bank?s downloaded transactions to Microsoft Money?s. You don?t have to do it every day, either. As I mentioned, certain expenses will become ?trended? and even ?remembered?. I actually reconcile only once a week and it doesn?t take much time at all. Plus, I take a few minutes to check how much I spent on meals for the week/month, etc.

A few extra tips:

• I rarely if ever use cash to pay for things. It?s easier for me to see (through the bank statements and Money) where my money is going.
• I use my ?Savings? account for just that: saving. The rest of my money is deposited into ?Checking?. On the 1st and 15th I have Wells Fargo setup to automatically transfer $X from Checking and put it into Savings. This way I know that I can?t and won?t spend that money. But, it will always be there in case of emergency.
• Although I have a steady flow of income (into Checking) I never let my credit card balance become larger than my saving account. Again, that way I always have the money to cover my expenses.
• I never carry a balance on my credit card. Using my above tips U never have to pay for spending money!

I realize this is a pretty simplistic view of personal finances but I think it?d help if everyone did at least this. Look to Ramit?s blog this year for an in-depth look at how to manage your personal finances.