Pragmatic Banking (checkbook and/or Quickenish and/or online)

I’ve grappled with this one since our bank in Bloomington offered “phone banking” (“using the keypad, enter the amount…”): what is the most effective (and/or efficient) way to do your personal banking?

First off, I don’t subscribe to the “wait-until-the-statement-comes-out” way of banking. You know: look at the statement and HOPE that you have some extra to cover all of your expenses. I don’t want to wonder; I’d like to know–fairly accurately–how much I have in my bank account at any given time…fairly accurately. So, here’s the options I’ve run through since I’ve been married (before I was married, well–that’s another story: gently smile everyone at the subtext at this point).

  • Checkbook (reconciling each month when statement arrives)
  • Checkbook + Phone Banking + Monthly Statement
  • Checkbook + Personal accounting program
  • Checkbook + Online Banking + Monthly Statement
  • Checkbook + Online Banking

You’ll notice that there’s a pattern here: I keep trying to convince my wife that all we need to use is the online banking (well, at first it was the phone banking, then the computer app, now it’s the online banking) and yet she insists on having something tangible. She wins each time, btw, because I’m realizing that she’s right.

The way our parents taught us to do banking (or we learned from a course in high school) is the Old School method of an end-of-the-month accountant way of recording all debits and credits in a check book register and then comparing all of those debits and credits with the bank statement. On the back of the statement are instructions to reconcile (literally: “to cause to be friendly again” and “to bring back to harmony”). You do have a relationship with your bank, whether you like it not, and each month you would restore to harmony how much–truthfully and honestly– money you have with the bank. To aid in the process, you would take into account all of the stuff that isn’t on the statement. In the end, you could figure out, to the penny, how much your relationship with your bank was worth. But there are some drawbacks: too much honesty; takes “time” to do and sometimes many people shy away from that monthly “meeting” and thus, cause for putting off reconciling and then the relationship is in a downward spin because months of statements of truth are piling up in some drawer.

I’m not going to mention much about the phone banking because its no longer an available option. I see that phone banking, along with online banking (with bill payment) as a convenience of saving big money on stamps and it is nice to merely enter in the current amount and date you want to pay out and click submit (less time than it takes to write the check).

The computer app with its “fun-ness” factor of attempting to do on computer what you didn’t want to do on paper. I started with versions of Quicken, then in the past 2 years in an air of propriety software liberty, have used GnuCash and Grisbi. The later two were fun because I got to do the whole Unix exploration through Fink and the command line (in OSX) and I view those times with great fondness. I learned a lot about the community of people that put out GNUish software and some of the overtones of the OpenSource ideas. But all of these programs left me with the same relationship script:

USER sets up app with great enthusiasm, enters in all transactions for 2 weeks, gets through, maybe, one reconciliation, and then other things captures his attention and now its 3 months later and the harmony with the BANK is strained (and HOPE enters the scene as a proxy for USER).

And it’s here’s my assessment with computer apps: It couldn’t replace the checkbook. In fact, if you have any semblance of a GTD mindset, you are frustrated because you are doing double the work (enter into checkbook and a program) for what end? Because you are supposed to manage your life with the computer? That in case your checkbook burns up (ours hasn’t yet) then you have a backup (ahh, that’s the justification for many a purchase, isn’t it?)? So, I don’t use a computer app anymore because it doesn’t work for me; it actually created more pressure on the relationship with my bank and thus I got fooled by the notion that by trashing I was being productive.

Online banking is nice and I think the bill payment function of our local bank is helpful…truly. Yes, we can get connected and check our relationship with our bank at any time. I still save receipts and enter in stuff by the end of the day and then every two or three days, check my accounting of the relationship with the bank’s accounting. These frequent encounters make for a more relaxed meeting and the little surprises of a $98 trip to Target isn’t compounded by time–for you know how things like that add up and explode months down the line, eh?

I like the idea of computers and online-ness; and for me, to strip away the flashiness of a Quicken or Web 2.0 relationship works in harmony with pen and paper.

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