Does anyone know of any good budgeting tools?
I've realized over the past few hours that I've spent an absurd amount of money relative to my income over the last few days, and I think that starting to budget would probably be a very good thing for me. Does anyone know of any good tools for keeping and managing a personal budget?
For strictly budgetting purposes the envelope method can be used in meatspace. Basically, you come up with a budget for your cash flow and set aside the physical monies in labelled envelopes (i.e. groceries, transportation, gifts, savings, etc), thereby gaining a mini-budget for each category. The physical aspect is pretty important since humans are better at conceptualizing with concrete objects and it acts as precommitment to the previously determined spending limits.
Otherwise here are some thoughts on software that I've tried (all targeted at Americans). For more, check out this Wikipedia list of personal finance software.
Ease of use, total privacy loss:
Manual data entry, slightly better privacy:
Manual data entry, private:
Some banks actually have a formal (more secure) way for Mint to get the transaction information. Presumably in those cases the Banks are okay with it.
Look if your bank support OAuth. If they do you're golden. But a lot do not.
GnuCash is nice but l've noticed quite a few errors where the software suddenly can't read my file. If you use it, use lots of backups.
Also, many of these softwares are US-focused and working with them in say, European monetary systems may be different, since debit cards are way more prevalent over here.
Oh hey, I'm the one that shared the plain text accounting thing here! I haven't kept up with it but thought it was neat and might pick it up again soon.
Thank you for the detailed response! I'll definitely look into what you suggested. The envelope method and gnucash both sound especially interesting.
One vote for YNAB here - my savings rate has gone up drastically (to be fair, started near zero outside retirement savings). The "giving every dollar a job" approach really clicked.
Tools might be the least important part of budgeting. Figuring out your personal philosophy towards money always struck me as more important. Do you budget like every dollar of income is your last? Do you assume you can always find a way to make more money? Is the purpose of money to make the world better, to buy happiness, to just keep you alive while you do more interesting stuff? Before you can allocate your dollars, you need to figure out what your goal is.
Probably the best budget advice I ever got was to set aside 10% of my income for frivolity, no matter how little that was. But that's because it resonated with me, not because it's some universal truth.
I always liked The Seven Laws of Money as a starting point, but I'm probably just showing my age there.
This is honestly the most important part. Every budgeting tool will want you to come up with proportions to keep aside, and how are you going to do that if you don't know what's important to you?
For me not having to worry about budgets is a big part of how my budgeting works, so I have a really simple system; most of my entertainment budget comes from subscriptions except for an extra roughly $20 every paycheck. Then I basically void every optional expense I possibly can and pocket what's left whenever I can. it works out pretty decently for me.
Admittedly might be not very useful due to obviousness, but Excel (Or, more likely Google Spreadsheets) + someone else's nicely formatted spreadsheet (you can google for some on the personalfinance subreddit).
A mental model for luxury spending is to calculate how much money you're comfortable spending, get a rate, and base off of that.
i.e If after taxes I take home 9k a month, rent + utilities + necessary food = 3.5k a month, I want to save 20% of my takehome paycheck = 1800, that gives me 9000 - 3500 - 1800 = 3700 a month of spending money, which is $123.33 a day.
So if I make a $300 purchase one day, I try to consider that as -$300 that builds bake up $123.33 a day, so I'll try not to spend extra for the next 3 days or so.
Not that it actually matters, but it can be easier to think of things on a day-to-day basis.
Lunchmoney.app came up in a hackerne.ws discussion about budgeting stuff. Looks pretty nice.
also: Monarch, and Buxfer.
You might wanna give the whole discussion a look.
These are all great products but they all seem like far too much effort for me. What I do instead is keep three bank accounts (all free with my bank), one with my card linked, a savings account (emergencies etc) and a bills savings account. I recently got a visa debit card hooked up to the bills account so bills could auto pay via it as well.
When I get paid, I log onto my bank website (usually via the phone app) and put away money into these accounts that I don't immediately need to pay rent or buy groceries. While there, I pay any bills I need to manually handle as well. I also keep a spreadsheet, where I enter the basic details of each bill with its category (e.g. rent), how much and its reference number. This allows me to quickly look them up if there are any disputes and allows the opportunity to use simple pivot tables if I really wanna know where my money is going.
This process takes about 30 minutes once a week with a cup of coffee and kept me out of debt with a large family of 5 for years. This is despite not earning a heap of money as well, though rare I would much rather negotiate payments for a large bill then put it on credit (haven't had to do this in years either). I'm the only person I know who pays their electricity bill on time without a credit card, which is one of the most expensive bills where I live.
The other nice thing about squirreling my money away is that it removes the temptation to blow it on junk in the first place. If I want something, I need to log into the bank app and transfer the money to my account with the card linked. Usually once I log on, look at my balances etc it's enough to make me reassess any spontaneous spending. I also set my almost adult son's bank accounts up in a similar way and he's put enough money away with this system while working to purchase his own car outright without a loan in a few weeks.
Where approximately are you located?
The place that's been on fire a lot lately.
Check out https://halfdollar.org/
It's a really cool budgeting tool that is based on a google sheet. You can use it completely offline if you'd like which is nice since it's financial data.