You can think of double entry accounting as unit tests for your financial books. It definitely does help in making sure that you don't make mistakes when you e

You can think of double entry accounting as unit tests for your financial books. It definitely does help in making sure that you don't make mistakes when you enter the data, but where it really shines is analysis after the fact. In Japan, the government actually gives me concessions for submitting my documents for income tax as double entry accounting. This is because it saves them huge amounts of money. So, if I document an expense that I want to get a deduction for, they can easily check that there is a corresponding withdrawal from the bank account to pay that expense. Especially for complicated areas, like my payroll, where I have up to 5 bank accounts in play (some of them off shore), it's absolutely the only way they can go back and understand what the heck is going on. Similarly, for me, I have sometimes gone back and discovered that I got an exchange rate wrong. Fixing that mistake is a nightmare (especially if you have to pay capital gains tax in a LIFO or FIFO manner -- you have to record the capital gains or losses for each "lot" of currency that you purchased). Double entry accounting will totally save your butt as you ripple through all your transactions changing the exchange rate for the foreign currency. If you get it wrong (i.e. over or underspend a particular "lot"), the numbers won't balance at the end. Is it necessary for your average person? Obviously not. As your finances become more complicated it kind of goes like this: intellectually interesting -> super cool -> crap, how did I get by without this? -> there is absolutely no other way to do it and not get arrested for tax evasion.