I'm a little over 3 months now using GnuCash, the free open source software alternative to personal finance applications such as Microsoft Money and Quicken. Today seemed like a good time to give you an update on my progress.

If you're thinking about switching away from Microsoft Money or Quicken, I would urge you to do it now before it gets too late in the tax year. Entering a couple of month's worth of transactions isn't very hard. Six month's worth is a bit of work. GnuCash will make the job relatively easy to be sure. As I pointed out before however, it's a change (for the better) in thinking about your personal finances.

I still have no reservations about making the switch from, in my case, Microsoft Money, to GnuCash. I saved a bundle of cash, and my personal finances are better organized than ever before.

Here's an example of how GnuCash helps me to keep my personal finances better organized than Microsoft Money ever did.

Have you ever mistakenly entered a transaction in the wrong account? Me too. I do it all the time. When I did this in Microsoft Money it was an especially bad problem because sometimes I would end up with transactions inappropriately allocated to their various categories. Think taxable vs. non-taxable distributions and you'll see what I mean. In GnuCash this is never a problem. In fact I'll frequently start in the wrong account intentionally.

Suppose I need to enter a new transaction into an account. Suppose this transaction is of a kind I have not entered before into this account, but one which I have entered into another GnuCash account. What I've learned is that I can go to the GnuCash account with the "template" transaction and simply duplicate it. GnuCash presents the newly created duplicate transaction ready to edit in the ledger. I change the account name field from the account I'm currently in to the account name I want this transaction to reside and hit the return key.

The transaction disappears from the account register. It simultaneously appears in it's proper account register with all the offsetting account entries - debits and credits - intact. What could be better? GnuCash, with its double entry accounting methodology is simply better at helping me to keep everything in its proper place.

If you have not made the switch over to free open source GnuCash yet, I urge you to consider it now before the year gets away from you and you're stuck with pretty but ineffective commercial personal finance applications for another whole year.