Author Topic: How to get into budgeting/tracking money flow?  (Read 1663 times)

SavinMaven

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How to get into budgeting/tracking money flow?
« on: April 21, 2018, 04:14:29 PM »
Only mild face punches, please, acknowledging the problem is the first step, and I KNOW I need to change, and am working on it!

I have a general sense of how much we spend, on average, per month, but honestly am a bit mystified by those who can track every dollar. We are blessed with high-enough incomes (and low-enough desires) that we can essentially buy what we need and want as we go along and lo and behold, there is still surplus at the end of the month, so we shrug and think all's well. But I admire those that have a tight handle on expenditures. I just am not sure how to get there. So many categories vary: clothing costs go up in August for back-to-school for the kids. Gift expenditures are up in December. Spending at Target or Walmart is up when they have a great sale on laundry detergent, or garbage bags.

How did you get from spend-as-you-go to really knowing where each dollar went? Software? Spreadsheets? I'm not super computer-savvy but figured this site out so I can learn :)

Bracken_Joy

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Re: How to get into budgeting/tracking money flow?
« Reply #1 on: April 21, 2018, 05:40:35 PM »
I use Mint. They have both and app and a standard web interface. Whatever method you use, the biggest thing is having a system. Do you manually put in transactions? Do you use a service that automatically imports transactions (like Mint)? This will depend on if you use cash or card predominantly, and what you prefer. How often do you check your books? (At time of transaction, daily, weekly?). There's as many options as there are people!

If you tell us some of your preferences, we can try to help you pick. Otherwise, just pick something and try it! If you don't get the hang of it within a month, try something else!

Making Cents

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Re: How to get into budgeting/tracking money flow?
« Reply #2 on: April 21, 2018, 05:50:27 PM »
I use credit cards for everything, except when cash, ACH transfer, or check is absolutely required (in our case, in the last 10 years this has only applied to house purchase and refi, mortgage payments, and electric/water payments). Mortgage and utilities i have on autopay, so they show up in my online banking as ACH transactions that are easily identified.

Then I use Mint.com to track every account we have in real time and gauge our surpluses each month. Their security is the same or better than online bank security. I also use Mint's budget tools, but really it is the money tracking which helps reduce discretionary spending as much as possible that is so helpful. You can then compare how you are doing month to month and year to year in their Trends section once you have been tracking for a while.

Best part is, you can then download all of your transactions any time to a ready-made spreadsheet file. No need to enter that stuff yourself. I just do this every year on New Year's Eve and I have a record of every expenditure we made filed by calendar year. It's awesome come tax time.

Good luck finding what works for you!

Zikoris

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Re: How to get into budgeting/tracking money flow?
« Reply #3 on: April 21, 2018, 05:53:29 PM »
I've used Mint to track our spending to the penny for years. It tend to get things wrong a bit at first, but it learns from your corrections and does things right eventually.

Another thing that makes it a lot easier to track is just plain having less transactions to stay on top of. We probably have a lot more transactions than a lot of people here since we do things like shop at multiple grocery stores in one day to get good deals on everything, but even then, our total monthly transactions are usually in the 30s or 40s, which is about one per day - a lot easier to keep track of than, say, 10 or 20 a day that some people might have (which would absolutely bury me alive).

COEE

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Re: How to get into budgeting/tracking money flow?
« Reply #4 on: April 22, 2018, 05:44:26 AM »
I've used YNAB ( www.youneedabudget.com ) for more than 5 years now.  They have a newer online version which I haven't tried yet, but I'm guessing it's probably better than the software I'm using (YNAB 4).  I like how YNAB uses last months income for the current months expenditures.  You also have the ability to break up the categories as detailed or simplistic as you'd like.  Technically you only need one bank account for everything - checking and savings included because the budget defines how you've saved for everything.

When I first started budgeting I found and extra ~$500/mo or so that we were just wasting on - stuff... who knows what.  Now I know where it goes, and I know how much we need/want to save to reach our goals.

Trifele

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Re: How to get into budgeting/tracking money flow?
« Reply #5 on: April 22, 2018, 05:53:00 AM »
For me tracking by credit card bills didn't work that well; The 3-4 week delay bothered me, and I wanted it to be more real-time and accurate.   

I started tracking with a regular old spiral notebook.  I set up categories -- mortgage, utilities, insurance, food, alcohol, medical, clothes, car maintenance, gas, travel, kids' activities, sports, entertainment, and so on.  We saved our receipts and I plugged everything into a category.  It's a bit time intensive but extremely accurate.  There really are only a couple of 'tricky' things:  Infrequent expenses like car/home insurance (annualize them and just plug the monthly number in each month); and shopping trips to stores like Target, where you might be picking up things that fit in multiple categories.  For those you have to go through the receipts and break them out. 

We averaged about 25-30 purchases a month, which is manageable for tracking.  And you may find that as you start tracking these things you start buying less -- win/win.  :)

After three months of doing this I had an excellent idea of where the money was going.  After a year I stopped tracking everything, but now -- many years later -- I am starting up again.  Gathering some updated data as we run down the homestretch to FIRE.   
« Last Edit: April 22, 2018, 05:54:47 AM by Trifele »

dmac680chi

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Re: How to get into budgeting/tracking money flow?
« Reply #6 on: April 22, 2018, 10:35:47 AM »
I would recommend YNAB as well. Some people view it as useful to pay off debt. Higher income people often find it useful in reaching their savings goals.


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Making Cents

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Re: How to get into budgeting/tracking money flow?
« Reply #7 on: April 22, 2018, 10:43:55 AM »
For me tracking by credit card bills didn't work that well; The 3-4 week delay bothered me, and I wanted it to be more real-time and accurate.   


I applaud your spiral notebook (might even be a bit jealous!), but in case this is helpful, the billing cycle delay is a thing of the past. You can get up-live data for any credit card purchases or credits by registering with their online banking website. You can even see pending charges within minutes. This is what Mint pulls from. I check Mint daily.

2Birds1Stone

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Re: How to get into budgeting/tracking money flow?
« Reply #8 on: April 22, 2018, 11:01:11 AM »
I use a spreadsheet through google sheets.

That way I can update it on my computer at work or my phone on the go.

I have 10 categories I track, and when I spend money I just update the number in that category. It's a great way to see where your money is going, as well as identifying good or bad trends in the data.

I don't "budget" in the traditional sense of the word, just track spending and know that my annual spending for this year will come in ~$20k (my half in DINK relationship).

RWD

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Re: How to get into budgeting/tracking money flow?
« Reply #9 on: April 22, 2018, 11:13:22 AM »
I use GnuCash. I made it a habit to enter all our transactions every other week and it's been pretty easy to keep up on. It's more work than some of the other options though, so it can be intimidating if you fall behind.

I also don't do budgeting. I just like seeing where our money is going.

Trifele

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Re: How to get into budgeting/tracking money flow?
« Reply #10 on: April 23, 2018, 08:56:13 AM »
For me tracking by credit card bills didn't work that well; The 3-4 week delay bothered me, and I wanted it to be more real-time and accurate.   


I applaud your spiral notebook (might even be a bit jealous!), but in case this is helpful, the billing cycle delay is a thing of the past. You can get up-live data for any credit card purchases or credits by registering with their online banking website. You can even see pending charges within minutes. This is what Mint pulls from. I check Mint daily.

Cool -- good to know.  I'm just using Excel now, but will check this out and see if would speed things up in any way.  Thanks

Phoenix_Fire

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Re: How to get into budgeting/tracking money flow?
« Reply #11 on: April 23, 2018, 11:16:29 AM »
I have Mint, but use it more for looking at my net worth quickly. 

For tracking actual expenses, I use an excel spreadsheet.  I would say that I was like you, I didn't spend lavishly, and there was always money left over at the end of the month.  I wasn't really paying attention to Mint, since I didn't devote the time to categorize things correctly, and found it frustrating that I would have a gas expense and a fast food expense get categorized as gas when I purchased them at the gas station (gotta love QT).  I would have to manually adjust them, and found that annoying. 

When I decided to start a spreadsheet, I had the control over categories.  I set it up, and was happy with it, then was curious at previous spending, and back filled it for a year by looking at previous credit card statements.  A few months after that, I back filled 2016 expenses as well.  They aren't completely accurate as they are missing any cash, but it's better than nothing. 

The effect this had on me was that I realized I was paying too much for home and auto insurance.  I switched both.  I also realized that while prepaying my mortgage gave me warm fuzzies, I was better off increasing my 401k to the max as well as my HSA.  This in turn led me to calculate out how much taxes were being withheld, and to adjust those so that I should be within $20 when I file my taxes in 2019. 

I actually look forward to filling out my spreadsheet when I have an expense now.  I know how much I have budgeted to each category, and can see when I am getting close or have gone over.  For me my budget is hard and fast, it is a guideline that I try to keep to what I have told myself.  It is mainly to be mindful of where I am. 

I have all of my bank/credit card apps on my phone, so I can quickly access a previous days spend.  If a purchase at the grocery store has food and cleaning supplies, I take a photo of the receipt so that I can break it out on my spreadsheet accordingly. 

I find that keeping track of spending has made me enjoy cooking at home more, and then when we do go out to eat, it is much more appreciated. 

AMandM

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Re: How to get into budgeting/tracking money flow?
« Reply #12 on: April 23, 2018, 05:04:31 PM »
We track our spending on paper.  I use old-fashioned yellowy-green ledger paper (they're called columnar pads at Staples). I try to enter expenditures the day they happen; if I get too far behind, it feels like too big a burden to enter them all at once. Also, I don't have a smart phone and the computer is often in use by someone else, so doing it on paper means I can do it whenever is convenient for me.

I do enter the monthly totals for each category into a spreadsheet. That lets me easily get monthly total spending, annual total spending, monthly average by category, etc.

Bartleby_the_Scrivener

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Re: How to get into budgeting/tracking money flow?
« Reply #13 on: April 24, 2018, 08:02:10 PM »
You could allocate money in advance. Three big categories are helpful: savings, needs, and wants.

Once you determine your fixed expenses (the needs category), you can determine how much goes into savings, and what's left over is used for everything else.

One book that I read suggested 50 percent into needs, 20 percent into savings, and 30 percent into wants. Since you're on here, though, you probably would want to shoot for a much higher savings rate.

The advantage of this is that you're not sitting there allocating $10 a month here to 57 different categories (which some people like but others do not). The disadvantage is that you don't get the granular detail.

Just a suggestion, although it's certainly not an original one.

Linea_Norway

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Re: How to get into budgeting/tracking money flow?
« Reply #14 on: April 25, 2018, 03:31:25 AM »
My internet bank has an economy module that tracks my expenses automatically. I guess it is a bit similar to Mint. I often need to adjust one or 2 transactions that are not standard and aren't recognized. When I started I had a large backlog of not categorized transactions. But after the initial cleaning up, it works very well. The fact that I spent less money also helps to keep the number of transactions low.
I also have 2 separate credit cards. From those I import the transactions into the internet bank described above, so I have detailed tracking on those transactions as well. I mark the payments to my CC accounts as "ignore, transfer between own accounts".

I don't do budgeting, because I think budgets are not flexible enough. Just having an aversion to spend a lot of money ensures that I spend quite little.

Buying bulk of products necessary on sale, it a very good habit.
« Last Edit: April 25, 2018, 03:36:27 AM by Linda_Norway »

jim555

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Re: How to get into budgeting/tracking money flow?
« Reply #15 on: April 25, 2018, 06:15:36 AM »
I do a spreadsheet with dates running down and categories going across, every sheet is a year.  Simple and effective.