Wednesday, June 17, 2009

Questions from Readers: Expense Tracking

Here's a question from my May expense wrap-up post:

Anonymous Nobrainerdeals said...

What kind of program do you use for tracking of your bills? Do you input ur receipts daily? I use quicken and should breakdown my dinning even further like yours so I can know exactly when and what I am spending on.



For many years now, I have been using Quicken on my Mac at home, and synchronizing it with the Pocket Quicken for Palm OS, which is on my Treo phone.

The desktop Quicken has almost all the features I need-- I can download my credit card transactions and update security prices with single click. I used to be able to download my 401k transactions too, but my provider currently doesn't support that for Macs, so I have to enter them manually. I set up expense categories and budgets, editing the categories and subcategories to things that are meaningful to me. Every month, I use desktop Quicken to run reports on my net worth, how my spending breaks out into categories and how I'm measuring up against my budget.

For daily cash transactions or ATM withdrawals, I enter them in Pocket Quicken as they happen. This is a great way to capture every single penny I spend and minimize the cash that somehow disappears. About once a week, I synchronize my Treo with my Mac so all the handheld transactions appear on the desktop. This also keeps all my balances and transactions on the handheld up to date, so I can run basic reports on my spending vs. budget even when I don't have desktop Quicken handy.

I can't emphasize enough how important the PDA integration has been for me. I've always been a huge fan of Palm devices, and being able to use a neat-o tech toy has made it fun to track my finances religiously. I don't have to worry about jotting down spending on paper, or keeping receipts for everything. Occasionally I'll forget to enter something in the Treo and then be annoyed when my balance is off, but when I'm good, I literally account for every dollar I spend, no matter how minor the expense. I'm worried about the future of this method-- Palm OS seems to be getting phased out, and there doesn't seem to be a Pocket Quicken app for Blackberry. They've recently introduced an iPhone app that syncs with the free online version of Quicken, but that lacks many features of the desktop version. It also seems to be annoyingly focused on younger users who are focused on living paycheck-to-paycheck. I don't want an app that tells me how much I have left to spend before I get paid again, and I don't think that approach should be encouraged! (I realize that living paycheck-to-paycheck is a true necessity rather than a choice for some people, but those people probably aren't splurging on iPhones.) I also find it annoying that the crucial feature of PDA integration would only be available for a stripped-down free version of a program but not the deluxe/premier versions they expect you to pay money for! I hope someone at Quicken is listening and that other PDA/smartphone apps are planned that will work with the desktop Mac version of Quicken.

My method won't be right for everyone, but there are various options you can try. I think everyone should start with some program that at least lets you download or monitor your bank and credit card transactions-- you could use Mint, Geezeo, or Quicken, all of which are free. And then you should find your favorite way to keep track of day to day cash expenses-- if you love using your iPhone or some other device, use that. If you have a favorite kind of notebook, such as a Moleskine (the extra-small Volants are perfect) or the handy little Field Notes books, use that. Someone will likely point out that these name brand notebooks can be expensive and a cheapo drugstore notebook would serve the same purpose-- true, but if the feel of writing on nice paper is pleasurable to you, it will encourage you to jot down every expense, and to me that is worth a few dollars. The point is to do whatever you can to help you form this habit.

Tracking expenses isn't just about compiling a lot of data. I firmly believe that when you see where your money's going, it helps you control your spending and focus on attaining savings goals, and it doesn't have to involve a lot of time or effort. Anyone else have any tips to share on how you track your spending?

18 comments:

Anonymous said...

You hit on my biggest struggle with keeping track of expenses; atm withdrawls and spending of cash. I use quicken online which tracks all my activity but inputting cash purchases is the toughest battle. Granted it's laziness on my part, but having software on my phone would enchourage me to input purchase right when they happen.

I agree on your analysis of quicken online, but being a free product I can overlook the money remaining section and use all the other tracking features. That being said, I never used the desktop version so I have no comparison, but like quicken online very much.

1001 Petals said...

For cash purchases I just save the receipts and input them later on when I'm at home. The trick is always remembering to get a receipt, and if I forget, I scribble what it was and the total on the back of another receipt.

Carrie said...

Do you use Quicken online or do you have the actual software? I can't find any online budgets that link up to my bank!! :(

Madame X said...

@ Carrie, I have the software for Mac. I've tried the online version and though the auto-updates are nice, it really lacks a lot of features I use. Are you using a small local bank? I've been very impressed by the long lists of banks that seem to work with Quicken.

Anonymous said...

I track cash on my PDA (iPod Touch, in my case) with a free expense tracking application - my particular app is Cash Trails Lite, but it almost doesn't matter because I am using only the very most barebones functionality to enter the date, amount, and description for cash transactions while I'm out and about. Then I manually enter these in MoneyDance when I get home (or at least every few days).

Moneydance, my Quicken alternative, lives on my iMac and doesn't have fancy sync capabilities - some of my accounts I can download data right into it, a couple I have to save an .ofx file and then import it into MD. My paycheck (all the taxes, things I pay for via payroll deduction, etc., not just the net pay that is deposited to my checking account) needs to be entered manually because our payroll system doesn't have an option, but most of those items are the same every two weeks, so it's not much of a chore.

elleandish said...

I wish I had a PDA just for this reason! I use my little day planner and a pen, and I do keep all of my receipts in a box and calculate them into a google docs spreadsheet weekly. But a PDA would make things so much easier! sigh.

Anonymous said...

I used to have Microsoft Money. Then (before they stopped supporting it) I moved everything to Yodlee. It's great for tracking budget/expenses and integration with online credit cards and banks. For cash expenses I do something similar to Anon (6/17/2009 1:10 PM): use Pocket Excel on my Windows Mobile phone/PDA to document date, amount and description and then once a week manually enter it into Yodlee online. The only thing about having a Yodlee manual cash account is that I have to manually set the balance after I put in my expenses. Small price to pay. FYI Yodlee is the backbone used on Mint/BoA/Fidelity Full view, etc.

Anonymous said...

I use a spreadsheet on my PDA (HP iPaq, which I absolutely love)for cash transactions and then manually enter them into my desktop Quicken the next morning when I do my daily fianance update. I could buy the Pocket Quicken, I suppose, and let it sync up, but I'm too cheap to pay for something I don't use all that often (most transactions are debit card based).
-Deby

Carrie said...

@ Madame X Well, it actual finds my bank and links up to my checking, but I also have a credit card through that same bank (which ALL of my purchases flow through) and Quicken can't link to the credit card. I would consider just purchasing the software if I could get it to link up....but it link up the same way it does online or can I sync it up manually? You know what I mean? I would really love to use it...

Madame X said...

@ carrie, not sure how it would work for you and your bank, but for my credit card, I go to the bank's website, select "download activity," and it gives me data formats to choose from. I choose the Quicken one, and that then opens automatically with my desktop app. It's not as automatic as with the online version but it works for me.

Cents in the City said...

I created my own Excel spreadsheet. I determined my fixed monthly income and divided it into categories for expenses. Some examples of my categories are food, rent, utilities, cell phone, gym, discretionary spending, savings, and student loan. The goal is to reach 0 at the end of the month.

Next to each main category, I have a column for expected expenses and a column for actual expenses. Using simple formulas, I am able to keep track of what I’m spending in each category and how much I have left for the month. At times I go over in some categories and under in others. I also leave a bit of padding for unexpected expenses, so it’s rare I go over.

Some categories are fixed, while others end up having multiple entries. Once the base spreadsheet has been created, I then copy it 11 times so that there is one workbook per month.

There is a 13th tab that tracks additional income that isn't fixed like items such as tax refunds, monetary gifts, rebates, etc. In addition I keep track of unexpected expenses or any large expenses that couldn't be covered in a monthly budget, like a vacation. I also have a formula that adds what I put into savings each month. The final formula adds additional income and savings and then subtracts unexpected expense, so that ultimately I can see what I saved or spent each year.

It's not a perfect system. Credit card expenses are the easiest to track. I usually just hold onto the receipts and then add it into my spreadsheet every day or so. It takes a minute or two a day at most…easy once it became a habit. I often note how much cash I have in my wallet before going out (it can get a bit fuzzy after a few drinks) and try to get a receipt if possible. Mostly I use credit cards to reduce any possible mistakes, plus I like the points!

Carrie...On The Cheap said...

@ MX I know exactly what you're talking about. Thank you so much!!!!

Anonymous said...

I keep track in a little notebook which I update every week in five categories: "rent" "food" "insurance" "Y membership" "other". I don't overspend so don't need to account for every penny. I love my little notebook, and I love even more keeping things super simple :)

Chad said...

It amazes me how many people are willing to put all of their financial resources online in one place like Mint or Quicken Online. I bet it would be cake to hack them. Just give me a Pocket Quicken for my iPhone that doesn't connect online and I would be happy. Of course, they can't do that they have to include all the bells and whistles of an online connection to increase my risk if I ever lose my iPhone, get it hacked, or had the site (Mint, Quicken Online, etc.) hacked.

Sicilian said...
This comment has been removed by the author.
Sicilian said...

Let's try this again. . . . Cents in the City. . . . I too use an excel file. . . . I like sorting it different ways to get different perspectives about spending patterns. . . .I also use a 13th sheet to track my car and house payments. . . . my goal is to retire debt early. . . . any extra cash goes to the car. . . . and when that is paid off . . . the house.
Ciao

Anonymous said...

Bronx Chica- I jot down my daily expenses into a lil pad brought from staples. I don't know if verizon carries an app. Once I do get home, I transfer the info into a composition book & excel spreadsheet.

Dave said...

I like to keep it easy-squeezy :)

I posted a free template I created for tracking my daily expenses here:



Best,Dave