Old Habits for a New Year

I started using Mint.com and I noticed the same thing as you – they wouldn’t connect to my Fidelity investments. However, after a few weeks of problems, Mint.com recently fixed that issue! I am now connected to the investments without a hitch and I’m enjoying Mint very much now!

I would still highly recommend it for those that need a fun tracking method. The great graphics make it more pleasing than that old Quicken software!

I think you’re right though. People should use what works for them. If that’s writing everything down on a peice of paper, then that’s what you should do.

I recently did something similar with Microsoft Money 2006 version — although I have not used any tracking programs since a very short and quickly aborted effort back in the Windows 3.0 days. I didn’t really track my spending while eliminating my debt (debt free as of Septemer 2010!), but I am finding that my savings aren’t growing as quickly as I suspected they would, and I am 100% certain that the culprit is a relaxation of my spending habits. I reckon that the first step to solving this problem is to find out exactly where the money has been going. For that, Microsoft Money will be good enough. Like you, I tried Mint and Yodlee, but they are a bit much for simple spending tracking needs. In fact, I wish I had an earlier version of Money, when it was bare-bones and not much more sophisticated than a simple ledger.

A few months ago, I spent a while looking at different personal finance software and web app options – including Mint and Xero (which I’ve used for business and is very nice to use for that – but the personal one, when I tried it, was based entirely around bank statements, which made it almost impossible for cash transactions). I think I tried about a dozen different apps or software options but didn’t find one that did what I wanted.

So I’ve gone old school for recording spending – a pencil and paper diary. I won’t get any pretty graphs at the end of it but the interface is easy to use (even kids can use it!) and I don’t have to turn my computer on to record buying a chocolate bar. It also doesn’t, obviously, link into any of my bank accounts but the savings accounts etc that I’ve got don’t need day-to-day management – I just check on them once a month and record the findings.

Until about three years ago I didn’t really track spending other than just balancing my checkbook. We were supposedly doing everything “right” – mortgage well within our means, two paid for cars, no debt at all, good income – so I thought we didn’t need to track spending. But I got tired of having no money at the end of every month and even though we were saving never feeling like we were saving enough. Money just seemed to disappear. I tried Quicken and Money and hated them both. I discovered YNAB and that really worked for me. Our savings amounts are way up and I feel like I have a MUCH better handle on where everything is going now. I certainly sleep better at night which is really the whole point of tracking for me.

The three areas that I have set for this year in terms of goals include (1) make use of more automatic payments, whether it is to myself, savings or paying bills, (2) use online tools to pay bills instead of writing a check and putting the bill in the mail, and (3) further consolidation of my saving, investment and credit card practices. I have never established a monthly budget, but have created monthly spreadsheets in order to understand where all of our family money goes. In that regard, I am hoping that consolidation will allow me to find some savings to invest in the future.

I signed up for Mint months ago and tried to link up my checking and savings account at my credit union but Mint still doesn’t have them online. It seems they are only connected to the large interstate banks and if you do your banking at a community bank or credit union it’s impossible to use Mint. I’m about to cancel my account and I’m greatly disappointed because it sounded like just what I wanted. Not sure what to do now, so I’m curious what others find useful alternatives.

Have you been peeking in my bag lately? How did you know about my spiral notebook?

While I’m an early adopter of most technologies, when it comes to budgeting, I’ve always found that the available options were either too limited or too labor intensive for my tastes. Nothing has ever come close to the ease and flexibility of my notebook, in terms of laying out exactly what I want to track. What I like best is that I can choose to be as detailed or as general as I want to be in a given month, without having to change my entire system. About four years ago, I also created an Excel worksheet, but I use that for tracking my progress on specific goals long term. Besides, there is something very visceral about physically crossing off various expenses as I pay them throughout the month! I don’t get the same thrill when I grey out a line item in Excel.

I worry about giving all my passwords to Mint. Should I?

I use a small notebook that fits in my purse. I’ve tried other methods but I keep coming back to what works. I love spreadsheets, but I need something that I keep with me or I forget to mark what I’m spending. Sometimes I feel old school doing it, but it’s the best method for me.

I don’t think I’ll ever be able to give up tracking my spending. I’ve stopped before but quickly things get out of control. I have the hardest time tracking when things get bad because I get down on myself, but I’ve learned the hard way that just makes it worse.

DH has been fiddling with his adult allowance. He’d been at I dunno, $30 or $35/week, plus 10X that at Christmas and his birthday. But then he put in a Zingerman’s (fancy food) order for $600 that gave me a negative literally physical reaction when I saw it, though I tried to fight it down because it’s his money and he can spend it however he wants. He decided his allowance was too high as his needs have diminished over time (mostly he’s got a French press that makes better coffee than any place in town and he hasn’t been going out to lunch). This was causing him to go a little crazy in the looking for things to spend money on arena.

So he dropped it to $15/week (!) But recently he realized he wants a super fancy desk chair, so he reinstated it to $30 and made it retroactive. We’re going shopping for chairs this weekend.

Um… I used to track every penny we spent and feel guilty about anything that was a want rather than a need. I used to game money more (chasing interest rates, the lowest cost gas, the cheapest plan, and I was the master of short term CDs, grocery inserts, coupons), because the small amounts we gained from that had a big impact to our bottom line. We have gone back to none of that. Even two years ago when we were trying to save DH’s entire salary and the year after that when we were living on one salary and savings, we haven’t gone back to that. I like feeling relaxed about money. I like making a lot more than we spend so that I don’t have to think about money all the time.

In fact, I’ve made a conscious decision not to go overzealous on the mortgage pre-payment so I can keep that freedom from thinking and worrying about money. http://nicoleandmaggie.wordpress.com/2010/12/01/mortgage-update-and-a-worry/ I grew up worrying about money and did a fantastic job saving on graduate stipends and I love not having to do that. We could cut our spending in half but we don’t have to. http://nicoleandmaggie.wordpress.com/2010/09/13/why-im-in-no-hurry-to-become-a-millionaire/ I love this freedom.

I do still do some comparison shopping… the easy stuff like comparing the per unit prices on things. I judge the difference in quality vs the difference in price. If the quality is unknown I’ll often take a chance on the cheaper one. We thoroughly research big purchases (like desk chairs– DH has already spent hours online and is now going to the city to try things out for himself before making a calculated decision). DH has become a master at home repairs, except plumbing which (from experience) we’ll spend the $80 on a plumber. We don’t shop with the grocery inserts, we don’t go out of our way to use coupons.

If one of us were to leave our jobs, then we would have to go back to more mindful spending because with maximum contributions to retirement, we’re a living off a little bit more than one set of take-home pay. If we were down to one income, then our supercharged retirement savings would become even more important.

So in short, we’ve mostly relaxed. Some things are still habits. What’s gone is the worry and the mental tracking. Monthly checks to credit card statements are good enough for us. We love spending less than we earn.

We have plenty of savings but we love tracking our spending. We use (sigh) Quicken 2003 for Mac and input every receipt we bring home.

At the end of the month, my husband updates his “Budget Cruncher” excel spreadsheet. On this sheet, we mostly keep track of our savings. We also do accruals here each month for things like charity, college expenses, music lessons, and hair appointments (mostly things that we budget for each month, but maybe the payments are on an odd schedule). We also make a number of charitable donations at the end of each year and it’s fun to have a big pile of money to work with.

When you have a substantial savings account, it’s just as important to track spending. It’s like losing weight; it is so hard to lose it, but easy to put back on.

One thing to watch out for when using an old version of Quicken… at some point they may no longer allow you to download data without upgrading to a newer version. That happened to me (granted, it was several years ago).

I use an Excel spreadsheet. Tried various other software but I don’t like tracking, so I need a very low entry level. In Excel, I just can add a new row for a new category that I want to create, don’t need to have a watertight financial system that adds up to the penny.
The sheet isn’t very sorted but good enough to find out the biggest costs and reduce them. I plan to improve it this year.

Different to (obviously) most people here, I really hate tracking. My ultimate goal is not to need to look at my accounts at all, just make enough to pay my monthly costs and save some money. That would be my personal idea of financial haven Looking out for a new job this year which hopefully will pay more, and do more freelancing projects on the side again.

We still do the adult allowance. If we don’t, we just spend too much. The other thing that has helped us A LOT is targeted savings accounts, which we began doing last October. Now our emergency fund is completely separate from our tuition fund which is completely separate from our vacation fund. Our kids have been itching to get back to DisneyWorld so it’s nice to be able to ask them if they really want to do a particular activity or would they prefer we added to the Disney account.

Seeing one big number in savings was giving us a false sense of security which resulted in overspending. As I think of it, we should probably start a replacement car fund too. Our cars are 5 and 2 years old so they’ve still got plenty of life in them, but if we start saving now, we’ll still be able to pay cash and leave our emergency funds intact.

J.D., I’m wondering if you’d consider putting up a blank excel template for download to use for tracking/graphing this information. I am not the most savvy person with software, and creating something like that for myself isn’t likely to happen because I just don’t know the program well enough.

I don’t track my spending to the dime, but I also have a $200 spending amount that I allow myself to buy whatever with!

I do use my credit cards to capture the discount for purchases via the rewards card though…

I’m desperately trying to convince my wife that we need a budget for spending (same as your spending plan). We tend to be a bit too frugal in my opinion… A “Spending Plan” would help us spend that amount that would enhance our life (and our son and daughter’s life too).

I completely agree that taking the small amount of time to manually track every expense gives you that sense of control that you need. It helped me completely turn around my bad habits and get out of debt and rack up a substantial savings in a relatively short period of time.

We use a spreadsheet on Google Docs. Very simple and my wife and I can both update it as time allows. Tried different versions of Quicken and found it entirely too bloated with features, even the earlier versions.

For years I tracked my expenses rigorously using MS Money. When MS discontinued it, I moved to Mint. At first I missed a lot of the Money features, but I don’t anymore. I also don’t track my expenses as closely as I used to. I realized after a while that for all the time I spent recording and classifying transactions, I rarely went in and ran reports off those transactions. Since that’s really the whole purposes of classifying them, it was really time wasted for me. With Mint, I don’t enter anything, and for transactions that have a clear category, I assign one. Increasingly though, for stores like Target, I find that say a $80 purchase covers a number of distinctly different categories. My time slaving over receipts with a calculator to split those costs is over. It’s not worth it. I pay myself first, and make sure I don’t spend more than I have with the rest. I’m achieving pretty much the same results with a lot less time invested.

I’ve been tracking my spending since about June 2008 using excel. But I don’t use categories and rarely look at them after I’ve entered them.
I have one sheet per account (Chequing, Saving, Credit Card 1, Credit Card 2, ING, Cash). Each sheet is labelled Date, For, Credit, Debit, Total. I’ve tried to come up with a budget, but as I’ve always spent under/at my income, and (according to my sister) rarely spend money on fun stuff it just doesn’t seem to make sense to do so.

I do find this article had interesting timing. I was reading the globe this morning (Globe and Mail – Canadian newspaper) and came across “Why Expense tracking won’t help you save” (http://www.theglobeandmail.com/globe-investor/personal-finance/home-cents/why-expense-tracking-wont-help-you-save/article1861079/). I’m not sure I agree with it, but interesting point of view.

You asked about what habits were abandoned after one has paid off debt and built savings.

For us, expense-tracking was the first to go. It was essential for me in the debt-paydown years, as I am a natural shopper and accumulator: but it was an unnecessary hassle for my naturally frugal husband. Once we had paid off debt and saved a good chunk, I happily abandoned my little notebook and spreadsheet.

Among the habits we did not abandon: automatic savings plans, monthly net worth statements and the monthly updates where we talk through our finances together.

I think it has cost us financially to not track expenses, because it’s easier to waste bits and pieces when you don’t track. I sort of care, but mostly I don’t. We save plenty, we increase our automatic savings amount each year, we tithe, we’re out of debt (except for our mortgage, which will be paid off in March); and expense-tracking was a major pain that we can now afford to abandon. The monthly discussions keep me in check enough.

To use the old weight-loss analogy: A while back I lost 60 pounds. I would like to have lost 70, but I realized that keeping 70 pounds off would have required more ongoing work than I’m willing to do. I can keep the 60 pounds off with regular exercise and moderate portions. To keep 70 pounds off I would have had to keep myslef on a short leash forever with lifelong calorie-tracking(analogy: the spending plan) and a punishing level of exercise. So I decided “normal” weight was good enough.

We could save more, but it wouldl require a lelvel of control that feels punishing to me personally so I don’t do it.

Had tried the paper/pen expense tracking many times before and never got the motivation to keep at it consistently.
For the past 3 years tracking our expenses has worked pretty well on a spreadhseet. Only drawback I see is no advanced analytic capability. Maybe it’s just me but I hesitate to expose my personal financial details to the cloud (aka Mint, Yodlee, etc)!

We are officially debt free since Dec 2010, and I can vouch that tracking expenses was critical in maintaining our financial discipline. Goals for this year are Save & Invest, so keeping to a budget and tracking expenses are very important to us. Apart from providing detailed information on spending habits tracking expenses aid as a psychological factor in financial discipline as we have set up max limits in different tracking categories.

Hmm for awhile I was just monthly tracking my checking/savings (excel). Now they we are reconfiguring our finances (refinancing, taking money out, both making our cash savings larger but our mortgage larger as well) having the isolated approach is not going to work as well, so I need a new way of gauging our progress or lack of. I could add some more columns in Excel, but maybe I’ll give mint a try. I confess I also feel accounting fatigue and want to take a break from it.

I know you specifically asked about tracking spending, but J.D.’s comment about spending real money versus using a card caught my eye.

My best friend and I recently had a conversation about spending cash versus using a card. I also track my spending and pay my balance off every two weeks. But she was paying me back in cash for something, and I made the comment that spending cash seemed like spending play money for me. I almost never have cash, and when I do, it’s usually a gift from someone. So cash, for me, feels like free money – it doesn’t show up in my online accounts and it’s harder for me to track.
In my head, once that money is out of an account or online tracking, it’s no longer available. And so whatever cash I might have in my purse always seems like play money. Which is why I almost always high-tail it to a bank when I find myself with more than about $20 in cash.

I like this post a lot!

Like I mentioned in the post you announced you’d be trying Mint, I had a similiar experience to yours. There’s a honeymoon period and then it wanes. I do what works for me and it’s Excel all the way complete with drop down menus and charts like you.

I’m not where you are yet, but you’re definitely something I aspire to. I like your honesty on the struggles you face with money no matter what your financial position is.

I think we somehow develop this belief that once you get so much money together, you’ll be fine and won’t have to worry about it anymore. But you do worry about it, just in different ways. Great post!

If you decide to try something else, since you’re on a Mac you could try Moneywell. I used to use Quicken but it works the opposite of the way I think. I don’t really need to know what I spent last week nearly as much as I need to know if there is enough left in my “allowance” to spend THIS week.

Tracking isn’t as useful as a spending plan is for me.