I’m a huge fan of tools that can help you get the job done.
I wanted to share a few ways that you can manage (not just track) your personal finances using digital tools that are out there. If you’re just starting out trying to budget, get a notepad, write the month at the top, and keep it simple. Don’t try the most complex Excel spreadsheet right off the bat – you’ll get frustrated trying to keep it all straight. If you have a spouse that is less enthusiastic, don’t drag them through a tour of this new amazing personal finance software you found – you’ll lose them. Start simple, and build from there.
The first thing to note is that there are TONS of products out there, and with enough searching, you can probably find the one that is “just right” for you. I’m only going to cover a few today.
1) The “Old Standby” – Microsoft Excel or Apple’s iWork Numbers
It’s odd to call these “old,” but if you’ve been around for a while you know people started using Excel for this exact thing in the mid-90’s. If you purchase a new Mac, iWork (including their spreadsheet program “Numbers”) comes free; if you own a Mac already, you can pick it up by itself for $20 from the Mac App Store.
I love the traditional spreadsheet because I can make it exactly what I want. I can customize it to my liking, add styles, formulas, tables, graphs, etc. It’s really only limited by my knowledge of the program and my ability to keep it up-to-date. I can make it incredibly complex, or amazingly simple. I can use it to track progress against my yearly budget (like our friends John and Emily), or just keep up how much I’ve spent on food this year.
Currently, we use Excel to track various savings goals that we work toward each month. For our 5-year anniversary vacation, I used Excel to keep track of how much money we had built up in the checking account versus how much we had spent. We also use it to track our family Blessing Fund.
2) The “shiny new model” – Mint.com
Mint.com (owned by financial services giant Intuit) just about does it all. It connects to all your accounts (bank accounts, debts, and investments) and allows you to see and track them all in one place. It automatically categorizes most of your purchases, so you can see how much you’re spending in any one category. You can set goals and budgets, and it helps you stick to those.
They have a excellent apps for iPhone, iPad, and Android, making keeping track of your money easier on the go. The disadvantage is that if you use an envelope system like we do, you have to input a bunch of “splits” for your cash withdrawals. It’s not difficult, you just have to keep on it, like any of these systems. Also, you gotta keep track of your categories closely, because Mint may automatically categorize them differently than you’d like.
The cost? It’s free, if you’re willing to deal with the targeted advertising that comes from the financial information you share with them. If you have a mortgage they’ll suggest a refinance; if you don’t have investments they’ll recommend some advisers to you, etc. The service you is well worth the ads they show, in my opinion.
3) The “Support Group” – MyTotalMoneyMakeover.com
MyTotalMoneyMakeover.com is a subscription-based portion of Dave Ramsey’s site. For a low cost each month, it offers an excellent budgeting tool, a debt snowball tool, all three hours of his show commercial-free, and user forums where you can get a ton of money-saving tips and encouragement from people doing the same thing you are.
Obviously, one disadvantage is the cost, but you’re paying for that “support system” to help you make some things happen in your finances. It also does not connect to your bank accounts. But if you’re at a place where you need a lot of motivation to keep your intensity up to reach some goals, MyTMMO.com is a great tool.
I know I’ve only scratched the surface here. What system do you use to help you mange your money?