Debugging Your Finances Roundup

One of the best tools of our modern technological world is something you probably didn’t even know existed.  You and I depend heavily on properly functioning technology in our daily lives – cars, phones,  computers, airplanes, banking systems, traffic lights, etc – the list is quite long. You probably don’t give much thought to how complex some of these things are because from your perspective they just work.

Taking a Sneak Peek

As someone who earns a living writing software, I’m all too familiar with the different ways things can fail with technology solutions and sometimes have to fix them when they break.  Getting back to what I mentioned in the beginning, there is a tool that helps us create software in a way that’s more durable and less error prone.   The tool is called a debugger, and what it does is peek inside a running program and tell you what is going on at a given point in time.

When you can visualize the different potential scenarios as they occur it gives you insight into what’s causing an issue, or what could cause an issue at some point in the future.  So what does this mean for your money?

Tracking Your Money

Well in the software world there’s a term called “black box” which basically means you don’t know exactly what a program does – all you know is what you put into it and what you get out the other side.  If your finances are kind of like a black box, you might know how much you earn each month and about what you have left over at the end of the month, but you don’t have a clear understanding of where all the money is going, how it’s being used, and what could potentially go wrong to cause your black box to give you a negative balance.

If that describes you then you have two options for “debugging your finances” to help you more clearly see what’s going on with your money.

Historical Debugging

The first is to do a historical audit of your finances, where you pull together old bank statements, checkbook stubs, and credit card receipts to see where your money was spent in the past few months.  This is probably the simplest form of debugging because almost everyone has old bills, statements, and receipts in a drawer that they could dig through and create a picture of that money coming in and going out.

Real Time Debugging

The second form of debugging is to signup for services like Mint that can aggregate and organize your expenses in a form of real time.  Going back to the software world, when you’re debugging you might see things you didn’t realize were happening – you can even do “what-if” type analysis on how things might turn out if you tweak the way they’re currently running.

So if you use services to track your daily spending and alert you to changes in your overall finances then you’ll get a view of yourself earning and spending as its happening.  This can give you insight into some of the challenges you’re facing and can allow you to do forecasting and make adjustments as you see the results come in.

A good debugger can save you hours of pain and frustration and help you avoid nasty bugs when you’re writing software.  The same is true of the tools you use to track and analyze your money, a good system can help you fix what’s not working and anticipate future problems.

Good luck in finding the system that works best for you!  Here are some personal finance posts from last week, maybe some of them can help.

Personal Finance

• The Cost of Raising a Child in U.S. @ Lazy Man & Money
• 5 Things You Need To Weather A Disaster @ Suns Financial Diary
• Why everyone should want to be wealthy @ Brip Blap
• Can Your Wallet Handle $5 ATM Fees? @ Moolanomy
• How to Save Money on Groceries @ Being Frugal
• Budgeting for Unexpected Expenses @ PT Money

Insurance

• How to Negotiate Your Medical Bills @ Generation X Finance
• What Is a Fixed Income Annuity  @ The Money Crashers

Career

• Reasons To Relocate: Would You Move for Love or Money? @ The Digerati Life
• When Should a Hobby Remain a Hobby? @ The Simple Dollar
• The Three Truths of a Job Search @ Free Money Finance

Taxes

• Are You an Innocent Spouse? @ My Dollar Plan
• 20 Things to Do With a Tax Refund @ Frugal Dad
• Are Social Security Benefits Taxable? @ Dough Roller

Investing

• Primer on Mutual Fund Fees & Ownership Fees @ Million Dollar Journey
• The Problem With A Retirement Based On The Stock Market @ My Money Blog

Ben Edwards, the founder of Money Smart Life, saved up enough to buy a Nintendo back when he was 12 years old. When he used the money to buy shares of Wal-Mart stock instead, he knew he wasn't like the other kids... His addiction to personal finance has paid off for his family and now he's helping you to afford the life that you want. Check him out on the web at Google Plus, Twitter and Facebook.

All posts by Ben Edwards