Do I Need a Personal Accountant?

Hire a Professional, Do It Yourself, or Do Both?

Individuals are not required by law to keep financial books and records (businesses are), but not doing this can be a costly mistake from financial and tax perspectives.

Your bank account and credit card statements may be wrong, and you may not discover this until it’s too late to make corrections. You may forget to pay a bill and hurt your credit score. You may have no clue about allocating income to saving and investing. Or you may overlook expenses that could provide some tax benefits. So keeping track of your personal finances makes sense.

Recording your income and expenses isn’t a difficult task (you don’t need an accounting background or to be “good with numbers”), but it does take time and effort. How you do it depends on your personal preference. You can hire an expert to do it all, do it yourself, or combine the two by using an expert to help you from time to time.

Key Takeaways

• Accountants and bookkeepers can help you keep track of your personal finances and provide help with your taxes.
• A certified public accountant (CPA) is more expensive than hiring an accountant who is not certified.
• Quicken offers accounting software that can help you do it yourself.
• A bookkeeper who reviews your work quarterly can be less expensive than hiring a professional accountant.

Option 1: Use an Expert

If you don’t have the time or believe that your time is worth more than what you’d pay someone else, you can engage professional help. But who, exactly? When people talk about getting a personal accountant, they often use the term loosely to refer to everyone from a bookkeeper to a CPA or tax preparer or even tax advisor. Select the professional who meets your needs:

Bookkeeper

This person may provide concierge services for your personal finances, including paying your bills, balancing your checkbook, and looking over your credit card statements. A bookkeeper may or may not have special training. A bookkeeper can obtain certification from the American Institute of Professional Bookkeepers or National Association of Certified Public Bookkeepers. The hourly rate for a bookkeeper depends on where you are, what services you seek, and what expertise the person offers, but the fee averages to almost $23 per hour.

Important

Whether you need an accountant will most likely depend on a few factors, including how complicated your taxes are to file and how many accounts you have to manage.

Accountant

This is a person who has training (and likely a college degree) in accounting and can handle bookkeeping chores. The hourly rate—which again depends on location, job description, and expertise—for a freelance accountant is about $35 per hour on average but can be considerably more, even up to $125 per hour.

Certified Public Accountant

This is an accountant (with a college degree and perhaps a master’s degree in accounting) who has received certification from the American Institute of Certified Public Accountants (AICPA). While a CPA can provide bookkeeping services, this professional may be too expensive for the task. Hourly fees for CPAs can run about $38 per hour to start and increase from there. (Most CPAs don’t handle bookkeeping services personally but use an employee in their firm—e.g., a bookkeeper—for this task.)

Back to the Bookkeeper

For the tasks described at the beginning, a personal bookkeeper is what you’ll need. Most people do not use an accountant (only wealthy individuals can justify the cost of these tax pros). Your bookkeeper will schedule regular appointments (e.g., weekly, monthly) to input data and perform the tasks you want to be done. Bookkeeping may be done in person (your home or the bookkeeper’s office) or online. Either way, you’ll need to provide access to your bank accounts and credit card statements, so be sure to check the references carefully of anyone you want to engage.

Option 2: DIY

Gone are the days of keeping paper ledgers. Today, user-friendly software and cloud solutions are available for the average consumer, not just professionals. The leading options for personal finances are:

Quicken

This software helps you create a monthly budget and monitor your finances. For an added monthly cost, you can use a bill-paying system to automate your payments so you’ll always be on time and pay the right amount.

Credit Karma

This free cloud-based platform absorbed features formerly on Mint.com in 2024, letting you track your personal finances and pay your bills online. It syncs with your bank account to simplify your personal finances.

Fast Fact

Both Quicken and Credit Karma have mobile apps to record information on the fly.

Option 3: Combine Your Efforts

You can work with a bookkeeper to help you get started with your personal accounting. Look for someone knowledgeable in the software you plan to use. The bookkeeper can set up accounts (which operate like folders) in which you place your information. By creating accounts that resemble the same categories used for tax purposes, you simplify tax return preparation (whether you do this or use a paid professional).

The bookkeeper can also review your work periodically (e.g., quarterly) to make sure you’re recording your income and expenses properly and reconciling your bank statement correctly.

What Is the Job Outlook for Bookkeepers?

The job market for bookkeepers is expected to decline 5% through 2033, according to the U.S. Bureau of Labor Statistics (BLS). Despite this, the agency projects almost 175,000 job openings annually through 2033 to replace workers who transfer to other occupations or retire.

What Is the Job Outlook for CPAs and Other Accountants?

The job market for CPAs and other accountants is expected to grow 6% through 2033, according to the BLS. This translates to almost 131,000 job openings each year in that time.

Are There Personal Finance Software and App Alternatives to Quicken and Credit Karma?

Yes. Other options include Banktivity, Empower, Rocket Money, Trim by OneMain, and YNAB (You Need a Budget).

The Bottom Line

However you decide to manage your personal accounting, be sure to separate this from accounting for any business you own. Build the cost of this accounting into your household budget.