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Day 3) The Only Way to Discover What Will Work For You

Welcome to Day 3 of Where’s My Money Going? Month! This February 2009, I’m challenging readers (and myself) to track spending manually for 28 days. Don’t worry if you’re late to the party, you’re still welcome to join.

Today’s post is by Jon, a friend of mine and (it turns out) reader who shares how his expense tracking has evolved over the last year. He writes:

I find the topic of tracking spending interesting because I’ve gone through the process of selecting an expense tracking tool over the last year myself.

I started with a spreadsheet I built myself. It worked fairly well, but I had two problems: adding spending/budget categories was difficult, and entering in all my spending by hand became tiring. While I was able to use it for almost a year, I definitely had lapses where I didn’t use it.

So I decided to try a dedicated program that could import transactions. I settled on GNU Cash because I didn’t want to spend money on a program that was supposed to save me money. I looked briefly at Mint and Quicken, but I don’t really trust them to have all the information from all my separate bank accounts and credit cards.

GNU Cash is pretty powerful for tracking spending, but weak on budgeting. There is a rudimentary budget feature that is basically incomplete. Importing transactions works great, but there is no matching feature; every month I had to tell it what category my car loan transaction is. The greatest strength of GNU Cash is that it business oriented and will track 4 categories: assets, liabilities, income, and expenses. That made it easy to see where retirement/savings was at, and where my debt was. It was one program and I could see the status of every one of my financial accounts.

I ultimately dropped GNU Cash because the lack of budgeting, but I definitely miss the ability to look at all my accounts at once.

For the last 4 months I’ve been using YNAB Pro, which I paid $50 for (free refund within a month, but I wanted to keep it). The program is very budget-oriented, but also has easy ways to import transactions/expenses. It can import and match bank statements.

The budget part of the program is based around the program writer’s philosophy, which is a little complicated, but the main 2 points are: 1) Get 1 month ahead of your expenses (all income for this month goes towards expenses next month). And 2) give every dollar a position in your budget.

Its only been four months, but I think I’ve been very successful with YNAB. All my expenses have been recorded and assigned to categories. I have money set aside for specific upcoming expenses ( eg. new glasses), and I have a budget set up for February. I think the reasons YNAB has worked so well are the easy expense entry and the flexible integrated budget. I’ve had much better control over my spending than I did with either Excel or GNU Cash.

Having said that, I can’t speak for everyone. There are certainly better spreadsheets available, and I think some people benefit from entering expenses by hand [which you can do with YNAB Pro, but don’t have to]. Personal experience gained by actively tracking your expenses is the only way to discover what will work for you.

This post was part of Where’s My Money Going? Month. Tomorrow I’m going to be talking about spouses/partners and where they fit into all this.

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Reviewing You Need a Budget
February 9, 2009 at 7:00 am

{ 10 comments… read them below or add one }

Miranda February 3, 2009 at 8:57 am

I actually keep track using Quicken. But instead of using the stuff automatically filled in, I enter by hand. I like that better, since it allows me to put things as they happen, and get a better picture of what’s really available (and what I’m spending) rather than waiting for the transaction to show up at the bank and then be synched with the program. I’ve found that putting it in myself also forces me to focus on where the money is going.

mrsmicah February 3, 2009 at 9:23 am

Miranda, that’s a great idea. Quicken and I always have arguments over what transactions should be recorded as what. If I entered things myself and unsynched it with my bank accounts, then perhaps it would less stressful for me to use.

Diane February 3, 2009 at 11:32 am

Are you using these tools to track every expense every month under normal circumstances?

I use an excel spreadsheet I designed to track my regular monthly expenses – mortgage, utilities, credit card payments. It is divided into sections for the 1st & 15th to mark each payment as it is made. I’m never late with a payment, and it gives me a good handle on where my money goes within the major categories.

BUT I have never broken down my credit card statements, or Wal-Mart receipts into categories, which is why I’m trying this challenge. This does not constitute the major part of my budget, but it is the only possibly discretionary spending that I could control.

I’m just wondering if you’re using these tools to categorize ALL spending every month.

mrsmicah February 3, 2009 at 11:36 am

@Diane, I hope Jon will drop by to answer, but I believe that he uses YNAB to track every expense (which isn’t too hard because one can use it to import bank statements).

Aleriel February 3, 2009 at 12:35 pm

I’ve always had trouble with automatic tracking of accounts. Partly because some of the banks I have accounts at export their statements as a plain CSV file instead of a common format like OFX, and parly because of having to tag and re-tag imported data.

I hope to get to the point where I’m a month ahead of my expenses, but until then… I have a paper calendar book (one of those monthly planner things) where I write down every bill on the day I need to pay it (rather than the day it’s due). Then I have a spreadsheet for recording daily expenses and a budget spreadsheet that accounts for all my bills and debt payments.

There’s a lot of manual work involved in maintaining it all, but that just ensures that I don’t go on autopilot and let finances (mis)manage themselves. Needing to update my records is what keeps me on track and feeling like I’m making progress.

ronnie February 3, 2009 at 5:30 pm

It’s interesting that two comments above are what I tried to address in the exspense tracker product I’ve written called cashwaltz.

First and foremost, I did not want to rely on the bank to provide the transactions that I would then later have to categories. Second, I needed a solution that I and my wife could use without one of us having to sit down and fat finger all the receipts in a batch.

So, to improve our communications about our current budget, I wrote a web based program which we could text in our expenses from our cell phone as we spent money, and it would send back our available cash and remaining budget for what we just spent money on.

I’m always looking to improve the product, and would be happy to hear your suggestions. The program does cost $29.95 per year to use, but the first month is free without requirering a credit card to evaluate it.

I love’d the post, and look forward to the next entry.


MoneyLady February 4, 2009 at 12:00 am

You should think again about Mint. I know it is a lot to trust, but really it is as safe as doing online banking. The tools are really awesome. You can easily create and track your budget. You can even set up alerts – so they’ll email or text you if you overspend, your checking account is running low, or your credit card payment is due.

I’m a huge fan. Mint is making budget management so much easier for me.

Tom February 5, 2009 at 5:19 pm

Mint is okay, but I prefer yodlee for account aggregation. Mint seems to have more flash and supports fewer sites.

I haven’t really been keeping a budget, but I have an idea of where everything goes. This month I’m trying it with a spreadsheet and I’m sure the results will be shocking/insightful. Yodlee never seemed to be much help in tracking where and how much I spent because its coding is usually way wrong and I never manually adjusted it. In the last year it has 61% listed as uncategorized and that doesn’t make it easy to see where your money is going…

Slinky February 23, 2009 at 6:18 pm

I’ve also used YNAB, but I find it’s budgeting somewhat lacking. It works fine as long as you’re only budgeting for the next month. Otherwise, it’s rather slow and awkward if you want to scroll back and forth between months. It also lacks the ability to simply tab across the months of your budget like a spreadsheet. I do use it for tracking my transactions though. At the time I bought it, I think it was only $10, so it was an easy solution to manual tracking. For me, it’s also only a stopgap measure until I finish writing my own program to handle my finances. It will, of course, be much less high handed about how you want to budget. 🙂

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