Author Topic: How detailed should be expense tracking be?  (Read 8500 times)

canadian

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How detailed should be expense tracking be?
« on: December 08, 2013, 07:06:18 PM »
I've just taken the big step of creating a spreadsheet for all of my income and expenses. I want to find the right balance between detail and time required to fill in the data. I tried Mint, but I found it never got things right, and want to use spreadsheets.

Much of my spending is via credit card (no month-to-month balance, and I get 1-2% cashback). The simplest method would be to review my statements once a month, and enter all the spending.

However, I'll lose some detail. For instance, I may have a $27.83 spending at the pharmacy. If I check statements once a month, I'll just enter that as "toiletries". But it's possible part of it wouldn't be toiletries, and this will prevent me from learning exactly how much I'm spending on, say, contact lense fluid over the course of a year?

My instinct is that as long as I've examines my contact lense/toothpaste/soap etc. spending, I don't need to know exactly how much I spend in the course of a year, and that having a broad "toiletries" category will be useful enough. Likewise for food. Is this wise, or is there a lot of value in being more detailed with tracking?

iamlindoro

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Re: How detailed should be expense tracking be?
« Reply #1 on: December 08, 2013, 07:23:53 PM »
I think this is individual.  For me, I log each transaction at the end of the day (In Quicken) and when it's not something I'll easily remember, I also log a memo.  This is enough granularity for me.  However, I know there are some who track down to the item, which seems a little excessive to me.  I find that transactions are exact enough so long as I'm not spending hundreds in a single transaction across multiple categories-- more commonly a single transaction is one or two items and/or fits neatly into a category.

Edit to add: I think tracking frequency is also a matter of personal comfort-- I would be lost trying to figure out what my transactions were at the end of the month (or I'd have to store the receipts and reconcile them, which doesn't sound like much fun), but I find daily logging when I get home and sit down is easy and allows me immediate feedback if I start to spend too much on something in a given month.
« Last Edit: December 08, 2013, 07:27:32 PM by iamlindoro »

avonlea

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Re: How detailed should be expense tracking be?
« Reply #2 on: December 08, 2013, 07:48:23 PM »
I do pretty much the same as iamlindoro.  Same reasoning behind my methods as well.  I'm so glad you answered first, iamlindoro.  You saved me from doing a lot of typing. :)

canadian

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Re: How detailed should be expense tracking be?
« Reply #3 on: December 08, 2013, 08:20:45 PM »
Thanks Guys. I have a followup: how do I balance income/expenses at the end of month?

I'm reading Your Money Or Your Life, and it says to record your account levels at the start and end of each month, then compare the difference to the net gain/loss you recorded in your tracking.

Sounds simple, but I don't know how to integrate credit card payments. My billing cycle doesn't fall on the first of the month (I can't change this). Is there a good way to track account balances at the start and end of the month AND account for credit card payments. Meaning, a CC payment made from my account in January will go to cover spending that occurred in December.

iamlindoro

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Re: How detailed should be expense tracking be?
« Reply #4 on: December 08, 2013, 08:29:42 PM »
I treat all transactions as money spent as of that moment, including credit cards.  So, I don't care when I pay the credit card bill, I just care about the transactions that occurred from the first day to the last day of the month.  Quicken has some nice reports that will break down your spending by category, and allow you to set date ranges.  There's no pressure to use Quicken, however, as Mint (and I believe also YNAB?) will also give you this data-mining capability.

I guess to get the information you are looking for, you could simply subtract your total spending for all transactions of that month on credit cards from your bank account balance.

I get a little more fancy than that-- I set Quicken to display all accounts with all scheduled transactions 90 days in advance so that I can see not just what my balance is today, but how it will affect things three months down the road.  I also set up a transaction for my next credit card due date for the payment, and update that amount daily as well so that my full payment of the balance each month is accounted for.  (This may not be clear, but basically right now I have a transaction sitting in Quicken for 1/5/14 which pays off the balance of the statement I just got.  I have one for 2/5/14 which I increase to reflect any amount I spend going forward this month.  Hope that makes sense.)

NinetyFour

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Re: How detailed should be expense tracking be?
« Reply #5 on: December 08, 2013, 09:16:33 PM »
I use Excel.  I track every penny because to me it's fun.  I'm actually really glad I have done that, because after the first few months, seeing what I spent in some categories was quite eye-opening!  I have 21 categories for spending.

avonlea

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Re: How detailed should be expense tracking be?
« Reply #6 on: December 09, 2013, 12:31:37 AM »
There's no pressure to use Quicken, however, as Mint (and I believe also YNAB?) will also give you this data-mining capability.

This is the one area where I am a bit different than most on the forum.  I use a budget program that my husband designed for me near the beginning of our marriage.  It's the best homemade gift I've ever gotten.:)  All of the recurring automatically paid expenses that cost the same amount each month (like life insurance) are listed as "deductions from income", and I don't have to worry about typing those out each and every time; they show up automatically when I open a new month's budget page.  Below "deductions", I have "budgeted categories" and I manually type expenses that go in there--some of these expenses are automatically paid but have a different amount every month (example: electric bill) and other expenses are purchases we make with credit cards or cash throughout the month (example: groceries).  I have heard great things about Mint, Quicken, and YNAB, but if you want to try my husband's program, you can send me a PM. It's free.  He lets anyone use it that wants it.  It doesn't link to bank accounts, so you have no choice but to type in all of your expenses manually, but I like not being allowed to be mindless.

The credit card bills are on autopay for us.  I check our cc accounts every month to make sure that the balances are accurate and that the payments have gone through, but I don't have them listed on our budget page.  I compare month-to-month spending by comparing budget pages.  Also, on the program I use, at the bottom of each budgeted category, there is a balance listed. An overall balance is also listed at the bottom of the budget page. (I think most budget programs are like this.)  At the end of the month, we use any remaining funds as either income for the next month's page or simply let it be savings.  And if we have overspent, we usually choose to have that amount deducted from the next month's income.

marty998

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Re: How detailed should be expense tracking be?
« Reply #7 on: December 09, 2013, 01:43:50 AM »
Just stop spending.

Then you'll have less to track.

Melody

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Re: How detailed should be expense tracking be?
« Reply #8 on: December 09, 2013, 02:32:52 AM »
I'd suggest a different level of granularity for different categories. Any "problem" categories (for me these are Clothes, Lazy Food, Personal Care and Entertainment) get quite detailed descriptions, whereas other categories (such as food or household) get only the name of the shop in the description. All Travel expenses that are not Hotel/Flight/other items booked/paid in advance get lumped into "Holiday" when I return using the sum of my ATM withdrawals while away, because I can't be bothered tracking when I am on holiday as expenditure is much higher - not necessarily in dollar terms but in terms of purchases per day. I have 16 "discretionary" categories and seven "essential" categories - more based around if I can avoid the expense temporarily or not and how often I should review it (so mobile phone and internet are "essential" as I'd have to cancel contracts, and I only price shop once a year, but food isn't - If I skipped a week or two I would be fine as there is always stuff in the pantry/freezer.)

I also don't track "how" I paid the expense (e.g. credit, debit, cash), or when I paid/incurred it (just the month it was paid in) as I can't see what help this information would be to me. So I guess just think about what you will do with the information and record that.

hybrid

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Re: How detailed should be expense tracking be?
« Reply #9 on: December 09, 2013, 06:52:49 AM »
I think the necessary level of detail depends on the person entering the data.  If you are already someone who has your spending under control and is very familiar with your income and outlays, then line-by-line budgeting may provide little value.  On the other hand, if you are struggling with getting spending under control then the more detail the better, it will expose all the warts.

For me, I maintain an Excel spreadsheet that tracks overall net worth and it measures perhaps ten items (mortgage, 401K, bank balance, etc.) that I enter at the end of the month.  I already have a good handle on what we are doing right and what areas still can bear improvement.

NinetyFour

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Re: How detailed should be expense tracking be?
« Reply #10 on: December 09, 2013, 07:11:22 AM »
Just stop spending.

Then you'll have less to track.

Yes, quite true.  Having to enter every expense in my excel spreadsheet makes me hyper aware of my spending.  Thus, I am also quite aware of the days when I spend nothing--no data entry required!

aj_yooper

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Re: How detailed should be expense tracking be?
« Reply #11 on: December 09, 2013, 07:22:48 AM »
There's no pressure to use Quicken, however, as Mint (and I believe also YNAB?) will also give you this data-mining capability.

This is the one area where I am a bit different than most on the forum.  I use a budget program that my husband designed for me near the beginning of our marriage.  It's the best homemade gift I've ever gotten.:)  All of the recurring automatically paid expenses that cost the same amount each month (like life insurance) are listed as "deductions from income", and I don't have to worry about typing those out each and every time; they show up automatically when I open a new month's budget page.  Below "deductions", I have "budgeted categories" and I manually type expenses that go in there--some of these expenses are automatically paid but have a different amount every month (example: electric bill) and other expenses are purchases we make with credit cards or cash throughout the month (example: groceries).  I have heard great things about Mint, Quicken, and YNAB, but if you want to try my husband's program, you can send me a PM. It's free.  He lets anyone use it that wants it.  It doesn't link to bank accounts, so you have no choice but to type in all of your expenses manually, but I like not being allowed to be mindless.

The credit card bills are on autopay for us.  I check our cc accounts every month to make sure that the balances are accurate and that the payments have gone through, but I don't have them listed on our budget page.  I compare month-to-month spending by comparing budget pages.  Also, on the program I use, at the bottom of each budgeted category, there is a balance listed. An overall balance is also listed at the bottom of the budget page. (I think most budget programs are like this.)  At the end of the month, we use any remaining funds as either income for the next month's page or simply let it be savings.  And if we have overspent, we usually choose to have that amount deducted from the next month's income.

This sounds like a great program! 

We use YNAB and it seems very similar.  I think there is great value in recording each expense at the point of purchase; that is why I like the smart phone part of YNAB.

sibamor

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Re: How detailed should be expense tracking be?
« Reply #12 on: December 09, 2013, 08:08:34 AM »
I used sumproduct equations to automate this process for me. I export expenses once a week or 2x a month from my bank and insert into a the bottom of my spreadsheet. I go just have to fill in the Category (name needs to match exactly) and Description columns and the work is done. It tabulates automatically for month/amount/and category (after I type it in). I add descriptors when needed for unusually large expenses
------------
=SUMPRODUCT(($E$90:$E$2011),($C$90:$C$2011=$B39)*1,(MONTH($A$90:$A$2011)=MONTH(C$1))*1)
Red= cost column
Yellow= category column
Blue= date column



Le0

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Re: How detailed should be expense tracking be?
« Reply #13 on: December 09, 2013, 08:17:50 AM »
I used sumproduct equations to automate this process for me. I export expenses once a week or 2x a month from my bank and insert into a the bottom of my spreadsheet. I go just have to fill in the Category (name needs to match exactly) and Description columns and the work is done. It tabulates automatically for month/amount/and category (after I type it in). I add descriptors when needed for unusually large expenses
------------
=SUMPRODUCT(($E$90:$E$2011),($C$90:$C$2011=$B39)*1,(MONTH($A$90:$A$2011)=MONTH(C$1))*1)
Red= cost column
Yellow= category column
Blue= date column

I would follow this up. Excel is very powerful. For fun I have actually built the core functionality of YNAB into a spreadsheet.  If you structure you sheet right then you have have all sorts of time saving "cool things" built in.

If you need any help ask away because there are a lot of us who love excel here.

canadian

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Re: How detailed should be expense tracking be?
« Reply #14 on: December 09, 2013, 09:04:44 AM »
Great replies guys. I'm going to take your advice and add detail in any areas I'm trying to reduce.

I'm still wondering how to make sure things are balanced. I'll give a really simplified example to clarify my dilemma. Here are some fake expenses:

November

Income: $2000
Rent: $500
Groceries: $600
Toiletries: $150

December

Income: $2000
Rent: $500
Groceries: $500
Toiletries: $100

Now suppose I pay for the toiletries and groceries by credit card, and the rent by cheque. I want to make sure that the expenses I've tracked match the actual changes in my financial accounts.

In December, my income/expense tracking would show a $900 net gain. But, in practice, I would pay the credit card bill for November in December. So if you look at my actual accounts, you'd only see a $750 net gain, as the november CC payment would be $750.

My question is: how do I balance my books, and thus make sure that I've correctly tracked everything? My actual finances are more complicated, as my billing cycle is from the 3rd to the 3rd, usually.

Le0

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Re: How detailed should be expense tracking be?
« Reply #15 on: December 09, 2013, 09:13:47 AM »
Great replies guys. I'm going to take your advice and add detail in any areas I'm trying to reduce.

I'm still wondering how to make sure things are balanced. I'll give a really simplified example to clarify my dilemma. Here are some fake expenses:

November

Income: $2000
Rent: $500
Groceries: $600
Toiletries: $150

December

Income: $2000
Rent: $500
Groceries: $500
Toiletries: $100

Now suppose I pay for the toiletries and groceries by credit card, and the rent by cheque. I want to make sure that the expenses I've tracked match the actual changes in my financial accounts.

In December, my income/expense tracking would show a $900 net gain. But, in practice, I would pay the credit card bill for November in December. So if you look at my actual accounts, you'd only see a $750 net gain, as the november CC payment would be $750.

My question is: how do I balance my books, and thus make sure that I've correctly tracked everything? My actual finances are more complicated, as my billing cycle is from the 3rd to the 3rd, usually.

I think its best to record spending when you spend it nor matter what account if comes out of. However make sure you also record which account it comes out of so you can track where your accounts are.

I'll be honest the YNAB method is what your looking for. Taking a look at the free online course that they offer might help you figure out how you sure run your spreadsheet.
http://www.youneedabudget.com/support/training-and-education

canadian

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Re: How detailed should be expense tracking be?
« Reply #16 on: December 09, 2013, 10:04:41 AM »
Great replies guys. I'm going to take your advice and add detail in any areas I'm trying to reduce.

I'm still wondering how to make sure things are balanced. I'll give a really simplified example to clarify my dilemma. Here are some fake expenses:

November

Income: $2000
Rent: $500
Groceries: $600
Toiletries: $150

December

Income: $2000
Rent: $500
Groceries: $500
Toiletries: $100

Now suppose I pay for the toiletries and groceries by credit card, and the rent by cheque. I want to make sure that the expenses I've tracked match the actual changes in my financial accounts.

In December, my income/expense tracking would show a $900 net gain. But, in practice, I would pay the credit card bill for November in December. So if you look at my actual accounts, you'd only see a $750 net gain, as the november CC payment would be $750.

My question is: how do I balance my books, and thus make sure that I've correctly tracked everything? My actual finances are more complicated, as my billing cycle is from the 3rd to the 3rd, usually.

I think its best to record spending when you spend it nor matter what account if comes out of. However make sure you also record which account it comes out of so you can track where your accounts are.

I'll be honest the YNAB method is what your looking for. Taking a look at the free online course that they offer might help you figure out how you sure run your spreadsheet.
http://www.youneedabudget.com/support/training-and-education

I am recording as I spend. My question is different: how do I make sure I accurately recorded, given that payments out of bank accounts to credit cards don't occur in the months in which I log the credit card spending?

Le0

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Re: How detailed should be expense tracking be?
« Reply #17 on: December 09, 2013, 10:10:52 AM »
Great replies guys. I'm going to take your advice and add detail in any areas I'm trying to reduce.

I'm still wondering how to make sure things are balanced. I'll give a really simplified example to clarify my dilemma. Here are some fake expenses:

November

Income: $2000
Rent: $500
Groceries: $600
Toiletries: $150

December

Income: $2000
Rent: $500
Groceries: $500
Toiletries: $100

Now suppose I pay for the toiletries and groceries by credit card, and the rent by cheque. I want to make sure that the expenses I've tracked match the actual changes in my financial accounts.

In December, my income/expense tracking would show a $900 net gain. But, in practice, I would pay the credit card bill for November in December. So if you look at my actual accounts, you'd only see a $750 net gain, as the november CC payment would be $750.

My question is: how do I balance my books, and thus make sure that I've correctly tracked everything? My actual finances are more complicated, as my billing cycle is from the 3rd to the 3rd, usually.

I think its best to record spending when you spend it nor matter what account if comes out of. However make sure you also record which account it comes out of so you can track where your accounts are.

I'll be honest the YNAB method is what your looking for. Taking a look at the free online course that they offer might help you figure out how you sure run your spreadsheet.
http://www.youneedabudget.com/support/training-and-education

I am recording as I spend. My question is different: how do I make sure I accurately recorded, given that payments out of bank accounts to credit cards don't occur in the months in which I log the credit card spending?

Don't count paying off your credit card as an expense. Because it isn't as long as you didn't get any interest.

It works like this.

You Spend $10 on food from the CC, then $10 from the checkings on Clothes.

You record 10 in the food category and 10 in the clothes category. You mark one from cc and the other from Checkings.

Now since you didn't spend money you didn't have it means you can transfer the $10 from your checkings to the CC to pay it off.

You don't record a transfer as spending for the month. You already recorded it when you actually spent the money.

Do that make sense? I can do a better example if needed.

canadian

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Re: How detailed should be expense tracking be?
« Reply #18 on: December 09, 2013, 10:37:23 AM »
Great replies guys. I'm going to take your advice and add detail in any areas I'm trying to reduce.

I'm still wondering how to make sure things are balanced. I'll give a really simplified example to clarify my dilemma. Here are some fake expenses:

November

Income: $2000
Rent: $500
Groceries: $600
Toiletries: $150

December

Income: $2000
Rent: $500
Groceries: $500
Toiletries: $100

Now suppose I pay for the toiletries and groceries by credit card, and the rent by cheque. I want to make sure that the expenses I've tracked match the actual changes in my financial accounts.

In December, my income/expense tracking would show a $900 net gain. But, in practice, I would pay the credit card bill for November in December. So if you look at my actual accounts, you'd only see a $750 net gain, as the november CC payment would be $750.

My question is: how do I balance my books, and thus make sure that I've correctly tracked everything? My actual finances are more complicated, as my billing cycle is from the 3rd to the 3rd, usually.

I think its best to record spending when you spend it nor matter what account if comes out of. However make sure you also record which account it comes out of so you can track where your accounts are.

I'll be honest the YNAB method is what your looking for. Taking a look at the free online course that they offer might help you figure out how you sure run your spreadsheet.
http://www.youneedabudget.com/support/training-and-education

I am recording as I spend. My question is different: how do I make sure I accurately recorded, given that payments out of bank accounts to credit cards don't occur in the months in which I log the credit card spending?

Don't count paying off your credit card as an expense. Because it isn't as long as you didn't get any interest.

It works like this.

You Spend $10 on food from the CC, then $10 from the checkings on Clothes.

You record 10 in the food category and 10 in the clothes category. You mark one from cc and the other from Checkings.

Now since you didn't spend money you didn't have it means you can transfer the $10 from your checkings to the CC to pay it off.

You don't record a transfer as spending for the month. You already recorded it when you actually spent the money.

Do that make sense? I can do a better example if needed.

That makes sense. But how do I account for tracking errors under such a system? For example, suppose I forget to write down 2-3 cash transactions in the month. Then I'll think "Oh, I spent $300 on groceries" when really I spent "357.63". I could be leaking money from multiple categories without realizing where it's going.

The book (Your Money Or Your Life) said to account for this by comparing starting and ending bank account balances for each month. I'm wondering how to fit CC payments into such a system, if possible. Does that make sense? I want to know how to make sure the system does error checking.

Le0

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Re: How detailed should be expense tracking be?
« Reply #19 on: December 09, 2013, 10:53:58 AM »

That makes sense. But how do I account for tracking errors under such a system? For example, suppose I forget to write down 2-3 cash transactions in the month. Then I'll think "Oh, I spent $300 on groceries" when really I spent "357.63". I could be leaking money from multiple categories without realizing where it's going.

The book (Your Money Or Your Life) said to account for this by comparing starting and ending bank account balances for each month. I'm wondering how to fit CC payments into such a system, if possible. Does that make sense? I want to know how to make sure the system does error checking.

Ok I see what you want.

I think you are going to have to make sure you pay off your credit cards in the same month you spend the money. Sometimes when I spend something on a credit card, I go home and transfer the money online right away. That way you can compare the month to month statements the way you want to.

The other option, and this might not work for you, is make sure you do not miss any spending.

The third option is what I call invisible money (money the budget can't see). If you notice a large difference between the month end numbers you manual adjust it via invisible money. If this money gets way to big, it means you need to record more carefully, but if it stays within a manageable amount month to month you can forget about it.

I am personally the type that budgets every last penny. But that's a matter of preference.

anotherAlias

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Re: How detailed should be expense tracking be?
« Reply #20 on: December 09, 2013, 11:05:17 AM »
I struggled with incorporating CC payments in the tracking at first too.  Let me see if I can explain my crazy spreadsheet.

Each row is a pay period and each column is an income or expense category.  So I have a column to enter my paycheck, another one for interest earned and a whole bunch for various expenses.  As I get paid or buy stuff, I log it in the appropriate column for that pay period.  Then the last few columns are summary columns for that pay period:  Total Income, Total Expenses, Ending Balance (which is the previous row's ending balance + Total Income - Total Expense).  For the first payperiod of the year, I have to type in a seed value for the beginning balance.  With this layout I can have an entire years expenses on one worksheet.

So that's the layout.  For CCs, I only use one because tracking more than that gives me a headache. I record my CC transactions in the pay period that I will be paying that statement.  I know that my CC statement ends on the 14th of the month and is due on the 7th of the following month.  So when I enter a CC transaction, I have to pay attention to what day I entered it so it would be included in the correct pay period.  For example, today I bought something online.  Since my statement period hasn't ended yet, I know that transaction will be in the next CC bill which is due on Jan 7.  Clear as mud?

canadian

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Re: How detailed should be expense tracking be?
« Reply #21 on: December 09, 2013, 08:50:27 PM »
I struggled with incorporating CC payments in the tracking at first too.  Let me see if I can explain my crazy spreadsheet.

Each row is a pay period and each column is an income or expense category.  So I have a column to enter my paycheck, another one for interest earned and a whole bunch for various expenses.  As I get paid or buy stuff, I log it in the appropriate column for that pay period.  Then the last few columns are summary columns for that pay period:  Total Income, Total Expenses, Ending Balance (which is the previous row's ending balance + Total Income - Total Expense).  For the first payperiod of the year, I have to type in a seed value for the beginning balance.  With this layout I can have an entire years expenses on one worksheet.

So that's the layout.  For CCs, I only use one because tracking more than that gives me a headache. I record my CC transactions in the pay period that I will be paying that statement.  I know that my CC statement ends on the 14th of the month and is due on the 7th of the following month.  So when I enter a CC transaction, I have to pay attention to what day I entered it so it would be included in the correct pay period.  For example, today I bought something online.  Since my statement period hasn't ended yet, I know that transaction will be in the next CC bill which is due on Jan 7.  Clear as mud?

Makes sense in theory. I'm trying to work out the practice. Some items aren't posted for several days. So I may buy something Jan 2, but it's posted Jan 4, and so falls in the next month (my statement is on the 3rd).

In that case, I guess I would:

1. Only fill in CC transactions once statements were posted.
2. Fill CC transactions in for the month in which I pay off the statement.
3. So really I'll be calculating earnings-minus payments in December, as opposed to earnings-minus spending in December.

In other words, I'll have the figure for this month's earnings minus LAST month's CC spending and this month's cash/debit spending. So my spreadsheet for december will show:

Net gain = December earnings – November CC spending – Dec Cash/debit spending.

I think I can live with that. My spending is stable enough month to month that this should produce useful data. On the other hand, I could probably manage to track everything. So I could calculate earnings minus spending in a given month, but at the cost of not being able to compare my data against my bank accounts.

1. What does everyone think is the more useful system?
2. Is there another alternative that I'm missing? Specifically, one that allows you to track earning minus spending within a month, but that also lets you compare account balances and CC payments.

anotherAlias

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Re: How detailed should be expense tracking be?
« Reply #22 on: December 10, 2013, 04:13:19 AM »
Yes it's not a true record of your income and expenses each month.  As for CC purchases that don't post right away, I just enter them as if they post immediately.  Then each weekend I double check my balances against my checking account and credit card account.

What I like about my system is that I can see the entire year at a glance and I think it's easier to notice trends in spending.

anastrophe

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Re: How detailed should be expense tracking be?
« Reply #23 on: December 10, 2013, 08:21:16 AM »
I track down to the penny for categories. $67 at the grocery store might be $8 toiletries and $59 food and I record it as such. Toiletries are taxable in my state and food is not, so I would also include the $.48 tax as part of the toiletries purchase. I find this level of detail is very helpful for me in determining where my problem habits are and where I can save via bulk purchases, etc.

For credit card purchases, I have the credit card set up as a separate account and log purchases in the same way using the postdate on the card. The credit card payment the next month is not recorded as a purchase, rather a transfer between accounts. Thus the spending is tracked at the point of purchase in the appropriate month, and with the same level of detail as any other purchase.

I'm using YNAB but before that I had a spreadsheet and they work exactly the same in this way. Having a phone app is very helpful for making sure I don't miss spending. The alternative is to save receipts and reconcile them carefully, and since I generally only make 10-15 purchases a month this isn't difficult (see marty's point).

aclarridge

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Re: How detailed should be expense tracking be?
« Reply #24 on: December 10, 2013, 08:25:35 AM »
Just make sure you write cash expenses into your spreadsheet as soon as possible after they are made. This shouldn't take up much time if you only use cash rarely.

In regards to granularity - use a Pivot Table in Excel. Copy/paste from your credit card statement or get a .csv output once a month from it. It will have date, item, amount. Then add one or two more categories like Type/Subtype. Once a month run through and categorize everything, it takes 5 minutes. Then refresh your pivot table and you'll see all the totals and subtotals by month or year and type/subtype - however you prefer. If you want to drill down and see what purchases added up to one of the numbers, just double click on that number. It's really awesome. If you want PM me and I'll send you the one I made.

aclarridge

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Re: How detailed should be expense tracking be?
« Reply #25 on: December 10, 2013, 08:47:40 AM »
I'll just put it here. Just type in your expenses and then hit Ctrl-R to trigger a small macro to refresh the pivot tables.

thelamb

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Re: How detailed should be expense tracking be?
« Reply #26 on: December 10, 2013, 09:24:18 AM »
Reconciling between the credit card and the checking seems to be the big challenge you're having.  I have it too.  Maybe this will help...

I have two tracking systems that don't match up, which is fine for me because the point is to reduce and control.  In one sheet is bills.  This is a monthly record of what is going to come out of checking accounts. Beginning of month, enter the amount in each checking, then each thing that is going to come out of those checking accounts, one of which will be my credit card bill.  Just about everything else is actual bills, usually fairly static:  mortgage, electricity, etc.  This spreadsheet serves more to gauge overall cash flow and what will be left over to either pay toward any debt or to push to investments. 

The other sheet is tracking of the credit card as this is the variability that needs to be reduced, controlled and monitored as often as necessary--the frequency of updating increases as the month nears an end or if I've pissed away too much and I want to know what's left in the budget.  The tracking is based on the statement cycle (for me the 17th to 17th--very different than the bill cycle) so if need be, I can just pull down an entire statement versus reconciling to the actual month.  Each statement is a worksheet where I simply categorize each line item somewhat specifically:  booze, dining, transportation, clothes, etc.  A summary worksheet sums the categories and diffs against the budgeted amount. 

The way they sort of reconcile is that this month's cc budget (ending in 7 days) will be next months cc bill.  Assuming all other bill amounts to be static and entering just my income as the beginning checking balance, I can then just plop in what I guess next month's cc bill will be and quickly derive what will be leftover.  If I don't like that number, the focus goes back to the cc budget:  where else can I reduce? 

Le0

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Re: How detailed should be expense tracking be?
« Reply #27 on: December 10, 2013, 10:31:19 AM »
I'll just put it here. Just type in your expenses and then hit Ctrl-R to trigger a small macro to refresh the pivot tables.

Great use of Pivot tables... people tend not to use them for what they are for.

Wildflame

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Re: How detailed should be expense tracking be?
« Reply #28 on: December 11, 2013, 04:49:54 AM »
I keep it very, very simple.
As long as my savings balance is increasing by $xxx per month, I am happy.
If it's more - great! If less - I look back through my online banking records and try and determine why, usually by identifying unusual or uncommon expenses of at least $50 (recent examples: plane tickets / symphony orchestra tickets / electric lawnmower / bike trailer).
I consider it a form of management by exception. =)

That said, I do have a mental estimate of what my bills, rent, groceries, eating out, transit, and miscellaneous spending will cost each month, so I do have reference values by category. However, I tend to find that some weeks my bills are greater, but I eat out one fewer time. Or I skimp on groceries because I bought too much last week, etc.

Whenever my income situation changes, or if I find myself consistently under-saving, I re-evaluate my income and expenses to determine what my $xxx monthly savings should be, and how much it is as a percentage of post-tax income. Presently it is hovering around 50%, which I am very happy with.

This may be an appropriate system for someone with relatively simple financial affairs, or who is more concerned with the outcome (achieving $xxx monthly savings) than with ruthlessly detailed optimisation, or someone who is easygoing (lazy *cough*). I am all three!

randymarsh

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Re: How detailed should be expense tracking be?
« Reply #29 on: December 11, 2013, 07:09:01 AM »
For a long time, I went crazy detailed in Mint. But then I realized it wasn't accomplishing anything except wasting my time.

I would spend time categorizing each of my food purchases as groceries, fast food, restaurant, coffee, or candy & snacks. It was more trouble than it was worth. I don't know what the line is between fast food and restaurant is. Sometimes I'd call Chipotle fast food and other times a restaurant. Is Five Guys fast food if I get it go but a restaurant if I sit down with friends? Same deal with campus food. If I grab a yogurt from the cafeteria, is that fast food or a snack?

Now I just let Mint pick what it thinks is fast food or a restaurant. It's all spending I do too much of anyway.

I don't split things up unless the difference is more than $10 or so. If I buy a case of beer and bag of chips, I just call it all "Alcohol".