The disadvantage of tracking financial accounts and transactions is the amount of time it consumes. I have spent hours on entering transactions and keeping account balances in harmony with the financial statements. The worst part is when I take a break from keeping track of the transactions. And recently, I have that experience again. I have not updated the transactions in my bank account for a few months. Going back to adjust balances is a pain for me, because I have lots of transactions in my accounts. I do a lot of trading in my brokerage accounts and I use my credit cards frequently. It makes me wonder if it’s even worth the time to be some detailed in my tracking progress.
The worse part is trying to recollect the transactions in my cash account. I do not always have receipts to trace back and there are no electronic records. Also, the cash balance in my Money frequently does not match the amount of cash I have on hand. It drives me crazy because I like to be organized, especially with my financial accounts.
Sometimes, I want to set myself free of this trouble and quit tracking each transaction. But then I would never know where my spending goes and what my net worth is. There is one way to compromise. I can track only the ending balances of my accounts at the end each month and not the daily transactions. This way, I can still keep track of my financial status and alleviate myself from hours of data input of the detailed transactions. This is an option in the future if I lose track of all the transactions again.
By the way, I do not believe that you have religiously tracking your financial accounts to be financially successful. I have seen entrepreneurs who do not keep track of every penny of their financial accounts and are still successful. I do believe, however that you have to be aware of your financial accounts and transactions. These entrepreneurs may not care about every penny but they do make sure they are generating profits. I believe the moral of the story is that as long as your cash flow is always positive, you are on your way to success.