1. Money Duality: Using Quicken and YNAB 4

    Back in February, I began making myself do twice as much work when it comes to managing our money.

    Why would I do this?

    In short: Because, even after eleven updates, Quicken 2013 is an unmitigated disaster.

    Quicken: Can I Get Along Without It?

    Quicken 2013 has now gone through eleven updates, and it’s still craptastic. My beloved “What’s Left” report …

    In / Out / What's Left

    … doesn’t register certain savings transfers once they’re entered. (As long as they’re just scheduled transactions, they show up fine). It doesn’t count “Employer Contributions to 401k” as income, but does count them as outflows when they’re transferred to my 401k account. Say what?

    And though it’s been revamped, Quicken 2013’s budgeting feature is still useless: I literally cannot determine where I stand for the current month as regards “Actual” spending, as it doesn’t tally any of my income at all in its bottom-line numbers.

    Sure, the register and account views of Quicken are still good. But otherwise, this is Total. Software. Fail.

    I went so far as to start an entirely new Quicken datafile, too, to see if that cleared up any of the issues. The answer? It cleared up one big issue, which was having Scheduled Transactions vanish once I set them to enter into my account registers. (I used the clean datafile throughout the month of February, and no transactions disappeared during that time, or during my first March bill-paying session.)

    At this point, I’d reasonably say that I’m as frustrated with Quicken 2013 as I’ve ever been, with any software.

    However, after using Quicken for so many years, the question of “Can I get along without it?” isn’t an easy one to answer. I always said that if I ever decided to dump Quicken, it’d be for YNAB. This hasn’t changed now that YNAB 4 is out; my YNAB 4 review is absolutely glowing. It is a fantastic piece of software.

    But for tracking all sorts of accounts, from retirement to stock-trading to just plain asset-value accounts, YNAB 4 isn’t Quicken. And Quicken’s reporting abilities are second to none.

    Can I get along without those things? I don’t know.

    But I am going to use both programs for a while, and see how it goes.

    Doing It All Twice

    There’s no doubt about it: Doing everything twice is a pain in the butt. February proved that to me.

    Since I enter all transactions by hand — no bank downloads for me! — and reconcile all accounts when statements arrive, doing all our monthly money-work twice is no small task.

    I have lots of accounts which I track in Quicken for net-worth purposes, but didn’t add to YNAB. I like to see my accounts segregated into more than two groups; YNAB has only “Budget Accounts” and “Off-Budget Accounts,” whereas Quicken allows for “Banking,” “Investment,” “Property & Debt,” and “Separate” groupings.

    Thus, precise net-worth tracking in YNAB 4 is a non-starter. But that’s not really what it was built to do. It was built for budgeting supremacy …

    … and it delivers that in spades.

    And since Quicken’s “What’s Left” report — which I depended upon for budgeting purposes — is now blown to heck, I shall have to rely on YNAB for cash-flow planning.

    When used for that task, YNAB is a true joy to behold.

    At some point, I’ll have to decide what I’m willing to give up: vast account-tracking abilities (Quicken), or heavenly cash-flow planning (YNAB).

    Because I don’t think I can keep doing twice the work forever.



  2. K-Cups: Best Prices Update

    Another year (plus) has passed since I last completed my survey of best prices on K-Cups. I had a little bit of free time this weekend, so I took up a bit of price-shopping and research. Scroll down a bit for the results.

    K-Cup Pricing: Some Boundaries

    When it comes to my K-Cup pricing surveys, I try to stick with retailers who are widely-known and very accessible. I don’t consider the impact of sales tax on pricing, since if you’re buying online, you ought to be paying your state’s use tax on those purchases since sales tax often isn’t collected.

    I omitted Sam’s Club from previous years’ lists because their selection has typically been very limited. This year, however, they’re in, since my local Sam’s Club had three varieties in stock when I visited. (One of which — Green Mountain’s Breakfast Blend — I happen to really enjoy. And yes, at $.50/cup, I picked up a box, as it represented a better price than the Green Mountain Cafe Express club pricing I usually get.)

    I include coupon prices for Bed Bath & Beyond because once you get on their mailing list, your mailbox will be perpetually stuffed with BBBY coupons.

    Lots of smaller online stores carry K-Cups, but of the ones I’ve seen, their per-cup prices become significantly higher than those below once shipping charges are tacked on. If one could find a free-shipping offer or two, and a desired flavor came on sale … well, who knows. Perhaps deals could be had, in that case.

    Best K-Cup Prices

    I was surprised to find that pricing hasn’t changed much, if at all, from the 2011 edition. Notably, Target’s prices for K-Cups have dropped by $1/box.

    I don’t drink Starbucks K-Cups, but I think their prices have risen. Where I could find them, Starbucks K-Cups boxes were smaller in count (16 K-Cups vs. 18 K-Cups for most others), and roughly $2 more per box ($12.98 to $14.98, depending on retailer) than other varieties.

    1. Sam’s Club $.4998/K-Cup
    2. Bed Bath & Beyond (w/Coupon for $5 Off of $15 or More) $.5272/K-Cup
    3. Bed Bath & Beyond (w/Coupon for 20% Off One Item) $.5329/K-Cup
    4. Green Mountain (w/Café Express Membership) $.5621/K-Cup
    5. Amazon.com (w/Prime and Subscribe & Save) (50ct.) $.5698/K-Cup
    6. Wal-Mart (Most Varieties / 18ct.) $.6100/K-Cup
    7. Target (Most Varieties / 18ct.) $.6106/K-Cup
    8. Amazon.com (w/Prime) (Most Varieties / 24ct.) $.6379/K-Cup
    9. Amazon.com (w/Super Saver Shipping) (Most Varieties / 24ct.) $.6379/K-Cup
    10. Bed Bath & Beyond (No Coupons) (Most Varieties / 18ct.) $.6661/K-Cup

    For the curious, the spreadsheet with the underlying data is available here.



  3. Quicken 2013: It Isn’t Good.

    I’m now about one month into my foray with Quicken 2013 Deluxe (upgraded from Quicken 2010 Deluxe), and the results are …uh … less than optimal.

    In other words, this program is a mess.

    In addition to the cash-flow-tracking problems mentioned earlier, I’m now having Recurring Bills VANISH ALTOGETHER when I click to enter them. My monthly cable bill, for example, when I clicked its ENTER button in the “Bills” tab … well, not only did it not appear in my register, it disappeared entirely from the bill list, too.

    Not good. Not good at all.

    I’ve spent years using Quicken, and generally defending it against detractors, but this is not acceptable. I’ve never once utilized Quicken’s transaction-download features, simply because of all the horror stories (former) Quicken users told, and in my mind I just blew these problems off. Entering all transactions by hand? No biggie. It’s what I’ve always done anyway.

    But to have a feature so basic as Recurring Bills blow up like this? On a Quicken release that’s been through 10 updates already? All while the folks at Intuit can’t come out with more crap features fast enough every year?

    Totally. Not. Acceptable.

    My Quicken use dates back to the mid-1990s, 3.5″ disk days.

    At this point, my continued support of Quicken is tenuous. At best.

    YNAB 4 is looking better and better.



  4. Quicken 2013: Budgeting Woes

    It was mid-January when I pushed Quicken Deluxe 2010 aside, and upgraded to Quicken Deluxe 2013. Thirty or forty minutes in, and I already had a bad feeling that this particular upgrade wasn’t going to be one that made me smile.

    I’ve been a devout Quicken user since the 1990s, with upgrades done typically every two or three years. It was Quicken Deluxe 2010’s “In / Out / What’s Left” feature …

    In / Out / What's Left

    … which finally allowed me to break away entirely from keeping separate budgets in Excel. I couldn’t tell whether this tool was still around in Quicken Deluxe 2013, as the packaging didn’t show it, but I went ahead and took the leap. Hope and prayer, and all that.

    “In / Out / What’s Left” Is Still There

    Yes, the “In/Out/What’s Left” chart is still in Quicken 2013 Deluxe, but it doesn’t show by default (as it did in 2010). Plus it’s pretty well hidden. It took me several weeks of sorta/kinda searching to figure this out. I will say that, until I found the darn thing, I was a sad, sad man whenever it came time to fire up Quicken and punch in some transactions.

    To get the “In/Out/What’s Left” view to appear on your Home desktop:

    HOME tab → Home button → Customize button → in “Available Items” window, scroll down to Planning section → select “In/Out/What’s Left” → click ADD.

    See? Just like that, I had my beloved “What’s Left” cash-flow tool back, and all was right with the world.

    Kind of.

    Quicken’s Budgeting Tool Gets Another Look

    I’ve stated in the past that Quicken’s budgeting features are miserable. Up to this point, if readers ever emailed me, asking for my opinions on budgeting tools, I’d inevitably point them toward Excel (“Make your own budgeting spreadsheet, or use one of mine“) or YNAB.

    It appears that Intuit really tried to revamp their budgeting tools in Deluxe 2013, which was a fine idea. The fact that I can see a year’s worth of spending and budgets at once is quite lovely:

    Quicken's Budget

    And by “lovely,” I mean it’s a good thing to see an annual budget breakdown once you’ve spent hours upon hours getting Quicken tweaked to show things correctly. Because if you don’t, you’ll find yourself and your budget in some time-warp, federal-government “minus equals plus and red means overspending and red is good” bizzaro money world.

    So yes, I still assert that YNAB’s budget setups make Quicken’s look, sound, and smell like utter crap. But in this arena, any progress (for Intuit) is good progress.

    Sadly, even with the revamp, I still can’t say much for Quicken’s budgeting prowess overall.

    Clunky, Clunky, Clunky

    Much like a pissed-off porcupine, Quicken’s budget is hard to handle. Selecting categories to include in your budget is a serious time-sink, for one thing.

    It’s worth noting here that Quicken’s budget can and will start right from Penny One of your previously set up paychecks. So if you’re one of those dorks who, like me, tracks your income from its pretax levels, all the way down through taxes, deductions, and everything else, you’re going to have a jolly ol’ time slogging through this as it relates to your budget(s).

    How do I know? Because I spent weeks kludging my way to what I already knew was my baseline “available to budget” amount, all because Quicken was applying my 401k employer-match amounts to the expense side of the budgeting ledger (because I want transfers to my 401k to count as a budgeting outflow) … but it wouldn’t count the initial employer-match “income” on the income side of things. Thus my “Remaining to Budget” amount appeared smaller than it really was. And figuring out why it refused to count the income was perfectly maddening.

    Turns out that, to rectify this, I had to figure out how Quicken was categorizing the employer-match money behind the scenes — and “_401 Employer Contrib” is the correct answer, kids. Then, for this category to even be made available in your budget, you have to checkmark “Show hidden categories” at the very bottom of the “Select Categories to Budget” form.

    Finding the category...

    And of course, because it would make NO SENSE WHATSOEVER to place “_401 Employer Contrib” in the “Personal Income” category group, you have to spend time scrolling through roughly 4,267,184 other categories in the “All Categories” group to find “_401 Employer Contrib” way down near the bottom of the list.


    Well, at least now, after several weeks, I’ve got Quicken’s budget set up to at least show me good “actual” spending numbers. I haven’t even approached the “budget” inputs yet. Should I desire to plan our income and spending months in advance, I think Quicken can make it happen. The question is: What Quicken budget idiosyncrasies have I not yet discovered? You just know there’ll be more.

    Only time will tell.



  5. 8 Tips for Building a Better Spreadsheet

    Being a financial dork of the highest order, it should go without saying that I love spreadsheets. And I particularly enjoy the process of building good, useful ones.

    Having been a spreadsheet aficionado for many years now, I thought it might be fun to scribble down a few of the “rules of thumb” for spreadsheet creation which I’ve learned over this time.

    (Not only do I make free and for-pay financial spreadsheets for web surfers at large, but my Day Job involves lots of spreadsheet use, too. And many of these spreadsheets get distributed throughout the company, for use by everyone from fresh-faced newbies to blurry-eyed Excel veterans.)

    That said, here are a few of my personal “Rules for Creating Spreadsheets That Don’t Suck.”

    Tip #1: Spreadsheets For You ≠ Spreadsheets You Distribute

    You might be able to get away with leaving cells unlocked (and the worksheet unprotected) in a spreadsheet you make for your own use, since you as Spreadsheet Creator presumably know what goes where. But that won’t fly with spreadsheets that you distribute for use by others.

    There’s just no telling what someone else will type, nor where they’ll type it. Let’s face it: Stray key-punches are a fact of life. Get a homeless [SPACEBAR] entered into a vital, formula-holding cell, and an entire spreadsheet can detonate.

    And that ain’t good.

    So be sure to unlock ONLY those cells where users are expected to enter data…

    … and then PROTECT that worksheet!

    Tip #2: Appearance freakin’ matters.

    We’ve all seen them: Spreadsheets emailed to us by coworkers with NO idea of how to arrange and design data in a way that makes sense. Cell text overruns gridlines like snakes dumped on a chessboard; instructions are vague at best; you couldn’t make the page suitable for printing if you taped three sheets of legal paper end to end. What goes where? What’s that army of “#####” symbols in Column G supposed to signify? Should I enter new data in Cell R3, or not? Good luck figuring all this out without going thru every cell by hand … and taking notes.

    Yeah. So, without any sort of cell formatting (read: background colors, borders, and so on) and coherent design to guide us, the actual usability of Coworker’s Latest Creation plummets so fast that it takes an act of God to keep this Excel disaster from being clicked ‘n’ dragged to a Recycle Bin demise.

    In other words, appearance matters. A little cell formatting — often as simple as some understated background colors in those cells where data should be user-entered, with white for everything else — goes a long, long way. The latest versions of Excel provide a metric crap-load of tools to make your spreadsheets look decent. CELL → FORMAT is nothing to be afraid of, you know.

    In other words, the best spreadsheets are a joy to look at, and work with. And the BEST best ones don’t look like spreadsheets at all.

    Tip #3: Gridlines Are Bad. White space is good.

    Plus, it’s easy on your printer. So use it liberally.

    (This includes getting rid of gridlines, and instead manually creating cell borders when necessary. Unused oceans of gridlines are the devil.)

    Tip #4: Color is most effective when used sparingly.

    Remember what I said about using color above? Well, don’t go overboard with that. Personally, I like to color (and unlock!) only those cells where users will need to enter data. All other cells are left white. (And locked!)

    Tip #5: Provide Detailed Labels and Notes…

    Thinking a field is “self-explanatory” courts disaster. You pretty much have to get inside the user’s mind and consider this stuff; you ponder what they’ll be thinking and seeing and deciding. Any guidance you can give that helps get the user’s Datapoint A into the correct cell will pay off big.

    Tip #6: …But Remember That Most People Don’t Read.

    Nobody reads a darn thing anymore. I’m fairly confident that 99% of users start hammering numbers into most spreadsheets without throwing so much as a glance as the “Instructions & Notes” worksheets I almost always provide. But that’s the world we live in.

    Build with the 99% in mind, but put some time into decent worksheet notes, too. Appreciate the 1%.

    Tip #7: Gonna distribute? Use version numbers!

    This is most applicable if you’re building spreadsheets for business use, where more than one person will be using the program. But it can also be helpful if you’re distributing your Excel creations on the internet.

    By applying version numbers to your spreadsheets, you make it easier for users to know which iteration they’re working with. It also makes it a snap to determine if the spreadsheet version that Ron, your nosey coworker in Cubicle B3, is working on is newer and better than yours.

    Tip #8: When possible, place column SUM formulas at the top of the data they tabulate.

    This is kind of a little thing, but man, has it made my spreadsheeting life easier.

    One of the great features of spreadsheets is their ability to analyze ever-changing amounts of data. However, when you build a spreadsheet to account for, say, a column with 100 rows of data which need to be totaled up, you might as well plan on that spreadsheet someday needing to total up 200 rows instead. So to make such a change easier, put your SUM formulas ABOVE the column’s uppermost data cell.

    I know that for myself, it’s almost instinctive to want to total up columns (when that’s what is required) at the bottom of the current data. (Thanks, every math teacher I ever had!)

    Here’s an example:

    However, placing the TOTALS (or whatever formula you need) at the top of each column’s data makes it much easier to expand your data “downward” later:

    With formulas at the column tops, you won’t have to go to the trouble of inserting rows (and possibly hosing your formulas) later on, when the need for more data becomes official … as it seemingly always does.



  6. Amazon Prime, I Heart You

    I’m not much of a stock-watcher these days, but I’ve seen a great deal of chatter on the internet regarding Amazon’s latest quarterly report. Their stock (ticker: AMZN) blew out the roof upon announcement of Amazon’s apparently-fabulous earnings, and rose about 15 percent on Friday. Yay for AMZN longs, I guess, and “ouch” for AMZN shorts. (I am not a knowing holder of AMZN, though the funds my family owns may or may not own AMZN.)

    This gives me an opportunity to talk about not AMZN, the stock, but Amazon, the company. And it’s something Amazon-related which I think I’ve overlooked to this point:

    My household hearts Amazon Prime.

    I love Amazon Prime. My wife loves Amazon Prime. I would contend that the $79/year which Prime costs us is possibly the best $79 I spend each year, when looked at from a “No, really, I’m happy to spend it!” angle.

    It isn’t the availability of streaming movies which delights us, as we’re not big movie-watchers. And we haven’t taken advantage of the Kindle e-book borrowing services which Amazon recently unleashed. Yes, both of those services are fine and dandy. But for us, it’s all about the unlimited two-day shipping.

    Put simply: Short of groceries and clothing, there’s very little that I can’t find a better-than-anywhere-else price on when it’s on Amazon. And as long as it’s something we don’t need right now, you can bet Amazon will get our money.

    But But But Local and B&M Businesses Are Suffering!

    Does my buying of PC components, Elixir electric-guitar strings, and damn near all books on Amazon mean that my local, bricks-and-mortar retailers lose business and/or “suffer?”

    Absolutely it does.

    Do I really care?

    Most of the time, no.

    The way I see it, the local and bricks/mortar retailers could’ve targeted the internet shopper the way Amazon did, back in the day. But they elected not to do so. Amazon did what it did, and bricks/mortar did what it did. One team won, and one team lost.

    Take, for instance, Best Buy. Lisa and I used to really enjoy visiting Best Buy. And we bought a fair amount of stuff from them over the years. But these days, it’s my opinion that Best Buy is nothing more than Amazon’s showroom, and a sparse, poorly-employed one at that. Something tells me that I’m not alone in this view.

    Could I get strings and such for my Gibson Les Paul at a local music store? Sure I could. Would I pay roughly 40 percent more for them if I did this, rather than buy through Amazon? Yes. Yes I would. If I needed new strings right the heck now, then spending locally is what I’d do. Otherwise, no. Amazon gets our cash. And we get our stuff in a couple of days, tops.

    Amazon Prime: Our Selling Points

    Amazon Prime, how I love thee? Let me count the ways. Amazon Prime …

    1. Saves us gas money, as we don’t make special trips to buy this stuff. Nor do we have to drive around OKC or Dallas trying to find a retailer who has what we want in stock.
    2. Saves time, for same reasons as above.
    3. Saves headaches, as we don’t have to wait in line to buy what we need. (As a grumpy parent, I now officially hate standing in line to spend money.)
    4. Means no more worrying about holding small-dollar purchases in Amazon’s cart to eventually qualify for Super Saver shipping. If I want to order a $14 cable on Monday and have it Wednesday, with no extra shipping fees, Amazon Prime makes it happen.
    5. Means quicker access to Amazon’s vast product selection. And their buying/checkout/account-monitoring processes were already the best I’ve ever seen.
    6. Is only helped by Amazon’s great customer service, which, the few times I’ve needed it, has been stellar. This, plus Prime benefits, means I have no problem giving them even more of our business.
    7. Allows us to get next-day shipping for an additional $4 or $5 per item, when necessary. (Which isn’t often.)

    I could probably come up with a few more positives, but I think these pretty much cover it. As mentioned earlier, the moderate selection of free Amazon Instant Videos available to Prime members isn’t a big deal to us; rather, it’s just icing on the cake. (Though, I’ll admit, it is more appealing now that Amazon Instant Video is available to PS3 owners, which we are.)

    Anybody out there still “on the fence” with Amazon Prime?



  7. K-Cups: Best Prices Update

    It’s been over a year since I updated my list of “best price retailers” for my beloved K-Cups. Back then (May, 2010), Amazon’s “Subscribe & Save” service had everyone else beat. But they’ve since discontinued that service, leaving the field open for other retailers to claim the spot at the top of my lowest-price list.

    Like most everything else, prices of K-Cups have increased in the 17+ months since my last compilation of K-Cup prices. In most places around here, a box of standard K-Cups will run you $12 for 18 K-Cups. Special varieties like hot chocolate, apple cider, and café mocha, some teas, as well as the coffee K-Cups from Wolfgang Puck, tend to cost a dollar more per box.

    In any case, as of last week, my list of best-price K-Cup retailers worked out like this:

    1. Bed Bath & Beyond (w/Coupon for $5 Off of $15 or More) $.5272/K-Cup
    2. Bed Bath & Beyond (w/Coupon for 20% Off One Item) $.5329/K-Cup
    3. Green Mountain (w/Café Express Membership) $.5621/K-Cup
    4. Wal-Mart (Folgers K-Cups) $.6267/K-Cup
    5. Amazon.com (w/Prime Membership) $.6500/K-Cup
    6. Amazon.com (w/Super Saver Shipping) $.6583/K-Cup
    7. Wal-Mart (non-Folgers flavors) $.6600/K-Cup
    8. Target $.6661/K-Cup
    9. Bed Bath & Beyond (No Coupons) $.6661/K-Cup
    10. Amazon.com (non-Prime) $.9000/K-Cup

    Inclusions & Omissions

    I omit Sam’s Club from the above list because their supply of K-Cups is extremely limited (usually only Caribou K-Cups are available, and I’m not a fan of any Caribou flavors I’ve tried). Costco doesn’t appear here because, sadly, there isn’t one in my area.

    I list Bed Bath & Beyond coupon prices because there’s rarely a time when we’re without one of their two coupons in our stash. (Once you get on their mailing list, BBY will practically stuff your mailbox with those things.)

    My list includes Wal-Mart’s Folgers-specific pricing because while I don’t care for this “gourmet” coffee, it is cheaper than other K-Cups and is very widely available.

    Online-Only K-Cup Retailers

    I have yet to find any smaller online-only retailers who can match or beat the prices above. It’s not like there aren’t a host of other K-Cup sellers out there, but all the ones I’ve visited miss out on price due to either (1) excessive shipping charges, or (2) stout “subscription” fees in order to get the “best” prices available, which still are more expensive than those offered by, say, Green Mountain Coffee themselves.

    For those who’d like to see my Excel spreadsheet (.xlsx) with the prices and quantities listed, it’s available here.



  8. Side Project: 1967 Mustang Restoration

    Way back when my wife and I were newly married, we occasionally talked about how neat it would be to fix up her ’67 Mustang — her first car, and the car she owned when we first met.

    While we’ve bought a handful of (far more reliable) vehicles since then, Lisa never would sell the Mustang. It’s kept its place in our garage, mostly just sitting there, withering away. I found it pretty shameful, really, because the Mustang’s previous owners really had taken pretty good care of it earlier in its life. It deserved something better than just rusting away, a minute at a time, year after year, in our garage, its hood and trunk a last-ditch storage place for boxed-up holiday knick-knacks and baby clothes.

    Time to Spend Money; Time to Spend Time

    Over the years, I managed to do a little bit of work here and there on the car — but these were primarily repairs to keep it road-worthy and drivable whenever opportunity presented and/or the urge struck. (We’re talking two or three times a year, tops.)

    But earlier this year, with our Emergency Fund fully funded (and then some), no debt other than the mortgage, and some other cash savings available, we agreed to start in on the restoration of our Pony. Since April, we’ve spent what is, to us, a hefty pile of cash bringing her “first baby” back to respectability. Those of you who wish to follow our trials and tribulations, or just look over my shoulder at some pics, can do so right here:

    New Blog: Our ’67 Mustang

    Yeah, it’s true: I’ll write about pretty much anything. A “car guy” I am not, by any stretch of imagination, but I will admit that’s it been a rewarding task so far. I’ve learned a lot, and had some fun doing what I can to bring the Mustang to life. As of right now, we’ve spent $6,595 on restoration and repairs so far this year, and there’s more waiting in the pipeline. (Which, as my dad so often warns me, is always the case with classic cars. Once you get started down Restoration Road, it never really ends. You can blow precisely as much money as you want … and new wants are always just a broken window regulator away.)

    But hey, with fresh paint and revamped interior, the car now gets looks on the road, and nice comments at the gas station. Neither of which is bad.

    And now, when I come home from work each day and see it there in the garage, I’m no longer ashamed. That, I think, is the best part of it all.



  9. Effective Tax Rate, 2010 Edition

    Each year, once I’ve completed and filed our income taxes, I like to spend a little time calculating my household’s effective tax rate. What’s an “effective tax rate,” you ask?

    Well, it’s a way for me to get outside of the usual “What tax bracket are you in?” thinking that so many folks seem mired in. Yes, income-tax brackets get all the media focus and hubbub, especially when tax rates change, but last time I checked, I pay more taxes than just the “income” variety.

    Since income taxes are really only part of our overall, real-world tax picture — think Medicare taxes, Social Security taxes, property taxes, and so on — it strikes me that figuring a more comprehensive “effective tax rate” gives a much better feel for how much of our money is really going out the door to the Tax Man.

    What’s Included in ETR?

    When I calculate my effective tax rate (“ETR,” for short), I start by figuring out my household’s gross annual income. That includes total wages and salaries (Form W-2, Box 3), interest earnings, non-retirement-account investment income, and any other sideline income that existed for that tax year. Added together, all those items get me the “Gross Income” figure for my formula below.

    On the taxes-paid side of things, I tally up our federal income taxes paid (Form 1040, Line 60), minus any credits below that line — the last two years’ “Making Work Pay” credits would qualify here. Added to that are state income taxes paid (if any), Social Security taxes, Medicare taxes, and any property or local taxes that I forked over during the year. If I have any excise or other taxes that I paid during the year, I lob those in here, too.

    Since I do separate some of my utility-bill taxes in Quicken, those figures go here, as well.

    What About Sales Taxes?

    Yes, to get a true tax picture, the year’s cumulative sales taxes also should get figured in.

    However, tracking sales taxes in Quicken with any sort of precision would mean that most every transaction becomes a split. Whilst I love me some in-depth financial data, I’m just not gung-ho enough to go that far. You gotta draw the line somewhere, right?

    (My annual use taxes do get figured in, though, because they’re included in the amount shown on the tax-form line I use for my Oklahoma “state taxes paid” above.)

    Initially, I planned to omit sales taxes altogether. But as I wrote this, it occurred to me that I could simply fire up an annual cash-flow report in Quicken, export it to Excel, and remove all categories that either (1) aren’t sales-taxable, or (2) already had use tax paid applied. I could take the remaining categories and do a little math on them.

    So I did. Figuring a rough estimate of total sales-taxes paid wasn’t too hard, with exception of auto fuel and its “cents-per-gallon, plus X percent sales tax” setup. Everything else? Pretty simple.

    For instance, our sales-tax rate on groceries was 8.25 percent, and we spent $5,332 on groceries last year, taxes and all. We can estimate that $406 of this was due to sales tax. [5332 − (5332 / 1.0825) = 406]

    Once I dumped that Quicken report into Excel, and autofilled the correct formulas, the sales-tax math was a breeze.

    (Yeah, over time, changes in sales-tax rates will complicate this. But again, all I’m looking for is a rough estimate!)

    A Tax Rate That’s “Effective”

    Once all those items are tallied up, the rest is easy:

    And that’s all. Take your [Total Taxes Paid] amount, and divide it by your [Total Gross Income] amount. The rate that results is your Effective Tax Rate.

    Now, I’ve been calculating my effective tax rate for years, though prior to 2010 I focused only on income taxes. Because I’m a dork who finds such comparisons fun, I tried to standardize things a bit this year so that I could go backwards through our tax returns and see how our ETR — now expanded to include all the other taxes we pay — has changed over time.

    2010 Effective Tax Rate: 21.9%

    So, for tax year 2010, roughly 21.9 percent of our income went toward taxes of one kind or another. For 2009, our effective tax rate was 21.5 percent. And back in 2008? A bit higher, at 23.9 percent.


    For a while now, I’ve really preferred to think of my tax burden in terms of this overall “effective tax rate,” rather than in terms of federal and state tax-bracket rates … which is what so many people do. Income taxes are only part of the picture, after all. Until you look at your tax burden in total, taking into account all the directions from which the Tax Man gets into your wallet, then it’s pretty easy to miss the immense impact that taxes have on your total financial picture.

    As the figures above show, I might be in the 15 percent federal tax bracket … but that sure doesn’t mean I’m handing a mere 15 percent of my income to the tax authorities!



  10. Excel: Keyboard Shortcut to End of Column

    A purchaser of my Check Register spreadsheet recently emailed me, asking if there was a quick way to get to the bottom of her register — to get to the first blank row, in other words, in order to quickly add a new transaction. When you have five hundred transactions in your register, scrolling all the way to the bottom of your data so you can enter a new transaction … well, it just ain’t a lot of fun.

    Now, Excel has always had lots of keyboard shortcuts. The one that’s most applicable here would be the [CNTRL]-[DOWN ARROW], or [CNTRL]-↓, shortcut.

    Getting to the Bottom of It

    When I press the [CNTRL]-↓ combination, Excel will automatically take me down to the last nonblank cell in my current, active column. So, in the case of my Check Register spreadsheet, placing Excel’s cursor in any cell in the DATE column (Column C), and then pressing [CNTRL]-↓, will take me to the last nonblank cell in that column.

    From there, a single arrow-down keypress gets us to the next blank row, and we’re ready to enter the new transaction. No scrolling involved!

    (Conversely, pressing [CNTRL]-↑ would take you to the topmost nonblank cell in your current column.)