A new year, a new Quicken file

I cleaned up my finances this weekend, and it felt good. I took my Quicken file, which is about 15 years old and getting huge, and retired it. It was full of outdated categories and payees, half-assed budget reports, and way too much information.

I used to track every deduction from my paycheck, every retirement account, every asset, and every taxable investment. But in truth I never did much with all that data, and it just got confusing and complicated.

So for 2007 I created a new, simple Quicken file that tracks just my checking accounts (bills and discretionary) using a few clean, general categories. I enter my net salary rather than trying to capture all the different taxes and insurance payments.

If I want to see my retirement money or investments, I'll look at my account online at Vanguard. That money is no longer part of the day-to-day picture. I'm just going to forget about it and let it quietly grow.

The idea behind all this is to pay cash for everything and watch my spending closely. I set up a Flexible Spending Account with my employer, which removes the need to track healthcare expenses. Those are now paid for with a special debit card. I also cut up all my credit cards (and canceled the one whose number I had memorized) and now pay for everything with my bank debit card or Paypal. I even signed up with Bank of America's "Keep the Change" program to try to put a little more money away.

Not sure how well it's going to work, but there's definitely something to be said for simplicity.