Raise your hand if you like working with your checkbook. Yeah, that’s what I thought.

If you’re still using a paper checkbook, you are missing out on about 8 billion benefits to going the “digital” route, so to speak. But the most important one is this: no more math slip-ups. I used to work at a bank, and I can’t tell you how many times I had to spend 45 minutes going through someone’s paper checkbook only to find that they forgot to carry a one or just completely forgot how to do basic math. It’s mind-boggling.

And it happens to everybody. I know it did for me quite frequently. Think about it: you’re in a rush, you quickly jot down the price of something and subtract it out. It’s easy to miss something when you’re running out the door. Or even better, you do the great trick of writing in the amount so you’ll do the math later, right? What’s that? You have a calculator? Great! But guess what? All it takes is one missed button and you’re screwed!

Besides the automatic adding and subtracting, going digital also gives you a much neater checkbook to work with (for those of us with supremely awful handwriting – yup, I got a “C” in penmanship in the 7th grade!), and you can also group your transactions and analyze your spending and saving much better, what with graphs and charts and all that fun stuff. Keeping a budget is easier because you can punch in your benchmarks and see the progress as it’s happening!

“But wait!” you scream, even though I can’t hear you. “I don’t want to spend $100 on Microsoft Money or the latest version of Quicken!” Me neither. So we need to build a system that can handle our finances online. Here is what I needed my system to do:

• Not cost a dime. I don’t have that kind of money.
• Allow me to manually enter in transactions. Services that pull in your account information automatically are great, and there are plenty of them. But if you automate the “keeping track” part of your finances, you leave yourself open to giant mistakes. They’re not perfect on their own. You need to be able to enter in your receipts and balance the checkbook manually.
• Be upgrade-proof. Buying Microsoft Money is a great investment – until the next version comes out. This system is free all the way through. You can’t be burned by new versions here.
• Be accessible anywhere. If you only have a desktop PC, you need to be able to grab your account information anywhere, since you can’t carry your desktop everywhere. If you have a laptop, you have an extreme advantage.
• Provide reporting features. The best part of having those cool, expensive programs is the way you can look at overviews of your finances and see where your money is going and how much of it. This system has it, for free.
• No internet access needed, however. If you know you are going somewhere where you don’t have internet, you need to be able to keep updating your finances on your computer.
• Be safe. Security is a concern with everything you do involving your money. This system does not require you to reveal any account numbers.

So, after much thought and testing, here’s what I deem to be the best and safest money management system. It’s nearly foolproof, and you can relax knowing your money is being tracked safely. So here are the 7 easy steps you need to take to set yourself up!

#1. Open your Google Docs.

If you have a Google account already, all you need to do is log in. If you don’t, sign up for one – it’s easy and it’s quick.

#2. Open up a new document from a template.

#3. Click on “Personal Finance” on the left side, underneath “Narrow by category”.

#4. Use the “Checkbook Register” template.

#5. Edit the template to fit your account.

This is how the template looks right after you load it. Click on the title at the top and change it to the name of your account (“Checking Account”, “Mastercard Credit Card”, etc.). Then notice how the examples are laid out – you can fill in a category for each transaction, and use it just like a regular paper checkbook. The only difference is that the math is done for you already. Edit the top line of the register to match your current balance, and you can start entering in transactions immediately! It will automatically be saved.

#6. Set up your accounts with Mint.

Go to Mint and click on the “Sign Up” link at the top of the page, then follow the instructions to add your different accounts and it will pull in your information. Worried about security? First, Mint has been open and running since 2006 and there have been no complaints of any security breaches. On top of that, even if someone were to hack into your account, all they would be able to see is your transactions. You are not giving your account information (account numbers, etc.). You are only giving information to track expenses and deposits.

Setting up your accounts can take a little bit of time, especially initially as Mint pulls in your information.

#7. Enjoy Mint’s extensive reporting features.

When you log into Mint, you will see an overview of your finances. Here you can see how much money has cleared your accounts, a quick look at your budget (which you can edit to fit your needs) and how far along you are in meeting that budget (below). You can also look at your transactions and edit how an expense is categorized, if you would like.

Click on the “Trends” tab, and you will see different ways you can look at how your money is being spent:

As you can see, you can change the timeline to see different reporting, if you would like.

Above: you can even compare your shopping to trends in your local area.

Mint also has a “Ways To Save” tab. This is what keeps Mint a free service. Here, Mint analyzes your spending and recommends different accounts and credit cards that would be better for you – maybe a credit card with a rewards program or a savings account with a higher interest rate, for example.

Mint also has email alerts, which automatically let you know when your credit card payments are due, or if your balances are starting to get low. You can set them up however you would like. Very handy!

“So how do I access this stuff from anywhere?”

Glad you asked! Google Docs and Mint are both hosted on their own servers and not on your computer. In layman’s terms, this means you can access them from anywhere with an internet connection. If you have a laptop, you can take these things wherever you want. At a hotel? Hop down to the public computer in the lobby and enter in your expenses from the day. It’s that simple.

No internet connection for the week? If you have a laptop, you can download your Google Docs checkbook as a spreadsheet and keep entering in transactions offline. Then you can upload the document back into your Google Docs account when you get home. You won’t get your reports and graphs until you get an internet connection, but if you’re on vacation, you’ve got better things to do than sit in your hotel room and look at your spending!

If you don’t like Mint, there are several other services like it that are just as free and have their own unique features, such as Thrive and Wesabe. Choose the one that’s right for you.

What do you think? Do you have your own money management system that you prefer over this one? Share it with us in the comments!

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 (Note: This was the only picture I found that could accurately express “bloated software”. I hate these commercials.)

One of the hallmarks of being a Practical Nerd is the ability to legally get the most functionality out of your computer without having to pay an arm and a leg. But there are so many people I talk to out there that have no clue about most of these options. Therefore, I am begging you to share this article with everyone you know! It needs to be spread around. There are a few great benefits that come with using these Practical Nerd Alternatives:

• You will literally save hundreds of dollars in most cases.
• About 98% of the general public will still retain all the functionality that they need, if not more.
• You will, in most cases, be able to jump right into the program and know how to use it easily.
• All of these options are perfectly fine to use, even if you are sharing files with someone who is using a more bloated program.
• When these programs get updated with new features – you get them, without having to buy a whole new piece of software!

1. Your office program (word processing, spreadsheets, etc.).

Cooler People: Microsoft Office.

Practical Nerds: Open Office, or Google Documents.

Why?: Microsoft Office is the standard-bearer in office products. Everybody has them, and they do fine work. But in 2007, Microsoft Office started messing around with what worked – they added a “ribbon” interface at the top, which looked really cool. The problem is, people who start using it have NO idea how to find anything! In addition, we all know Microsoft Office is freaking expensive. According to Microsoft’s web site, the retail price for Microsoft Office Standard is $399.95! Yup, and this is a suite of programs that does NOT come with Windows.

Open Office replaces your Word, Excel, Access, and PowerPoint, while also having a handful of programs of their own. Functionality is simple, but loaded with plenty of features. You can use it to open Office documents – even those created in Office 2007, which Office 2003 can NOT do – and save in those same formats. So, if you need to swap files back and forth with someone using Office, there’s no problem!

Google Documents is a suite of office products online – you do all your work in a web browser. Google Docs is much simpler than Open Office, but still has a host of features that make it comparable for most word processing and spreadsheet needs. It also has the ability to create forms that will then supply data for a spreadsheet automatically, and it has Presentation, which replaces your PowerPoint. All files are hosted online, so it is an automatic backup solution as well. Like Open Office, Google Docs also handles all Office files as well.

2. Your web browser.

Cooler People: Internet Explorer.

Practical Nerds: Mozilla Firefox, or Google Chrome.

Why?: Internet Explorer is junk. It takes up way too much resources and slows your computer down. Most of IE’s features over the last few years have been in response to other web browsers’ features that have proven to be very popular.

I’m a Firefox man, and I’m proud of it. You can customize Firefox to handle all of your web browsing needs and then some. It is a powerhouse, and it has a wizard on its official website to walk you through customizing it to your liking.

Google Chrome is a new kid here on the market, and I know plenty of people who really enjoy it. If a web site causes Chrome to crash, it only crashes the open tab, not the entire browser. It is also simple and clean, allowing you to fill the page with websites rather than toolbars.

3. Your antivirus protection.

Cooler People: Symantec, Norton.

Practical Nerds: AVG, Avira Antivirus, Avast!, Panda Cloud Antivirus

Why?: Because antivirus protection should be free. If you are paying for antivirus protection, it is an absolute waste of your money. Use any of the free solutions above and you will be more than protected. Plus, check out The Practical Nerd’s hands-on review of Panda Cloud Antivirus.

4. In-depth photo editing.

Cooler People: Adobe Photoshop.

Practical Nerds: GIMP.

Why?: Photoshop has become the Kleenex of photo manipulation. If somebody has edited a photo, we say they “Photoshopped” it. It is the biggest thing going – and it costs $699. GIMP is free, and it is powerful. It does just about anything the average person would need. If you are used to Photoshop, try GIMPshop, which is a version of GIMP designed to function very similarly to Photoshop for an easy transition.

5. Your note-taking.

Cooler People: Microsoft OneNote.

Practical Nerds: Evernote.

Why?: OneNote is a powerful program and is a great way to hold all your notes – but it costs $99.95. In my experience with OneNote, backing up your notebooks is a big hassle: when I did, in fact, backup my system before I reinstalled Windows, I could not restore my OneNote backup for anything, and there is very little information online to help out with that. So I lost my notes anyway.

Evernote has both a desktop client and an online note-taking platform for you. They sync automatically, so your notes are always backed up and accessible anywhere. Evernote has plenty of great features, and yes, it is free.

6. Burning CDs and DVDs.

Cooler People: Nero or Roxio.

Practical Nerds: DVDStyler and CDBurnerXP.

Why?: How lame is it that you have to spend a couple hundred bucks on software to use something that came with your computer? Why is this not integrated with any software that comes with your computer? CDBurnerXP handles any CD or DVD burning that you want to throw at it. Want cool menus on your DVD? Use DVDStyler. They are both dead-simple to use and make burning any discs a snap.

7. Playing back music and movies.

Cooler People: Windows Media Player.

Practical Nerds: KMPlayer.

Why?: KMPlayer is my newest discovery, and it might be my favorite. Windows Media Player, while free, is fairly confusing to the average user. If you don’t have the right codecs or something is goofy, it won’t play your video. KMPlayer comes with every codec under the sun, and it plays music, movie files, DVDs, VCDs, you name it – “out of the box”, meaning it just works. Install it and then just use it. It’s slick-looking, and it can handle whatever you want to throw at it. Many people online will tell you to use VLC Player for this, but I find VLC to be just a bit confusing for the average user, and it did not always work properly on my XP machine. KMPlayer does, every time.

8. Handling all of your emails and scheduling.

Cooler People: Microsoft Outlook.

Practical Nerds: Gmail and Google Calendar.

Why?: Outlook is also in the Microsoft Office suite, meaning we’re already talking about paying hundreds of dollars just to use it. Gmail allows you to organize all of your email accounts in one place, enables you to search deeply through all of your emails, and you can download a notifier to sit in your system tray to let you know when you have new mail, just like Outlook. Plus, Gmail stores everything online, so you free up a LARGE amount of space on your computer! Gmail also has a new feature called Gmail Offline, which allows you to work on your email offline and sync it up with your Gmail account when you restore internet access. It’s all free, and there are more features than I can even talk about here – I plan to put together a user’s guide to Gmail in the near future.

Google Calendar allows any type of color-coding, will automatically email or text you reminders of events (if you want it to), imports any number of calendars, and you can even share calendars with other people (handy for families that need to work off of one calendar). And like Gmail, Google Calendar stores everything online, which means it is accessible anywhere.

9. Handling your finances.

Cooler People: Microsoft Money, or Quicken.

Practical Nerds: Spreadsheets (both Open Office and Google Docs have checkbook templates online), Mint, Thrive, ClearCheckbook, many others.

Why?: Is it ironic that money management programs cost so much? Microsoft Money costs $59.99, and it has a ridiculous number of features that nobody is ever going to use. Quicken is $39.99 and is pretty much the same. Also, a new version comes out for both and you are stuck with outdated software.

One of my more anticipated posts in the next week or so will be how to manage your money for free and get all the functionality you would use out of Money or Quicken. By combining a spreadsheet with an online account aggregator like Mint or Thrive, you get all the reports you need, plus extra (and useful!) features that only online offerings present. But in brief, spreadsheets allow a neat, safe way to track your expenses while the program does the math for you. Plus, it saves paper, if you are into that sort of thing.

Whew! That’s a lot of different options! But as you can see, mainstream, well-known programs are not always the best options for you. You’ve just been using them because everyone else has. Now you can drop those bulky programs and still do everything you are used to doing! Do you disagree with any of these choices? Do you use a different option not listed here? Sound off in the comments! Let’s hear it!

Get great, practical advice sent straight to your inbox every week! For more information on The Practical Nerd Rules for Life, click here. Plus, learn how you can get a copy of my FREE ebook!

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We’ve highlighted Thrive’s online personal finance planning service, and now their blog has a great post today with comments from prominent personal finance bloggers on the importance of financial education and changing the mindset of this country on how to handle your money. Yes, that’s me with comments at the end, and it’s very cool to see my name listed among some of the smartest people on the Web. It’s a great read – check it out!

Any thoughts on the article? Share with us in the comments!

Get great, practical advice sent straight to your inbox every week! For more information on The Practical Nerd Rules for Life, click here. Plus, learn how you can get a copy of my FREE ebook!

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