It’s time to get real. Budgeting is no fun. It’s a necessary evil that we do day in and day out because it’s… necessary. At times, we warm up to it, like when we freaking rock our monthly goals or grow our savings or become debt free. We may briefly dub ourselves king and queen of budgeting and have the townspeople in our pretend kingdom chant, “All hail budgeting!” in the streets. No, that would be weird. But most of the time, budgeting’s a no fun, messy, frustrating, complicated affair.
Johnny and I have
probably definitely overshared on the topic of budgeting — ways to budget, using Mint, tracking our net worth, and where we keep our money, etc. But we’ve never actually compiled it all together and explained how we keep things simple and straight in our day to day. So here’s a major spoiler: we’re actually pretty lazy.
So ready for more oversharing? Yay! Here are our main budgeting tools and how we keep them simple in our crazy lives.
This app is our go to day-to-day tool. It houses all of our budgeting categories, and we use it to record our spending in real-time. As soon as I buy groceries, I enter the amount and the store I shopped at into our “Groceries” category. If I forget to enter an expense on the spot, I sometimes find myself entering items in bed right before I go to sleep. But we don’t use every feature the app offers or get overly concerned about tracking every little penny:
- We always round up or down to the nearest dollar.
- We don’t keep track of any of our checking/savings/credit cards or other accounts in the app.
- We only track our projected budget and our actual expenses. There are separate sections of the app for bills and income, but we don’t usually use these.
- At the beginning of each month, we adjust the budget as needed, depending on whether portions of our spending needs changing.
- Yes, it’s requires manual expense tracking and that’s how we like it.
In short, the entire purpose of this app is for us to be aware of our spending and to have an easy way to record it. That’s it. It’s not where we reconcile all of our finances. If it gets too granular or time consuming, we know we won’t do it.
Mint is our big-picture budgeting tool. We have all (and I mean all) of our accounts connected to Mint. Here’s an idea of what I mean:
- Emergency fund savings
- Business checking
- Business savings
- Health savings account
- Credit cards
- Roth IRA investments
- Taxable investments
- 529 college savings plans
- Car equity
- Scooter equity
YouTube-famous cat equity(still waiting on this to pan out)
It’s hard to keep track of all that stuff otherwise, so Mint is a great tool for keeping it simple and knowing exactly where all of our accounts stand. If we want to know exactly how much we have in liquid cash right that second, Mint will tell us. If we want to know how our retirement accounts are shaping up, Mint will tell us. You get the idea. We check it one or two times a week. And by “we,” I mean “Johnny.” He’s the nerdier one.
Tracking Net Worth
Johnny has this super nerdy net worth tracking spreadsheet that we use to reconcile our finances from month to month. He opens it up on the first of every month and manually enters in all of our account balances. Creating the spreadsheet in the first place took some time, but now it just takes a few minutes to enter our balances using Mint as a reference point. The spreadsheet does its thing, and we’re able to track how much money we gained (or lost) from one month to the next. It’s a great way for us to start each and every month knowing where our finances stand overall. Did we save as much as we hoped? Why or why not? After our move and some extra business costs, we were dreading computing our August net worth. And we didn’t end up liking what we saw. But it was a good reminder for us to buckle down in September and really watch our spending.
Keeping a Paper Trail
While spending with cash can be a good way to control spending, we actually avoid it. We prefer to do as much as our spending as possible with credit cards. They’re all synced on Mint, so we can see their balances and transactions at all times. And if we forget to record our spending, it’s easy to reference it. We’re able to rack up points or airline miles, and it’s really nice to have a paper trail of exactly what we bought. I can’t just splurge on pillows from Target without Johnny knowing — which is actually a very, very good thing. It’s easy for cash to be spent anonymously with no accountability of where it went, at least for us. And while we spend mostly with credit cards, we do it within the confines of our budget. We also make sure to always, always, always pay them in full at the end of each month.
We get our utility bills and phone bill e-delivered to Johnny’s email, and paying them is his responsibility. While we’re all about joint finances and discussing our spending as a team, we do break up certain responsibilities in order to keep things organized. I completely manage our meal planning and grocery spending, for instance. When it comes to paying off our credit cards each month, on the other hand, that’s on Johnny. By knowing who’s taking charge of certain areas of our budget, we never find ourselves wondering if a bill was paid or overspending on food because no one planned what to eat.
Our number one goal is to simplify our budget as much as possible (hellooo, we couldn’t live without our Everything Else category), while still keeping track of everything. The time we spend on budgeting is minimal. And while it’s always in the back of our minds (as well it should be), our system keeps us from feeling like budgeting is laborious or a burden in our day-to-day life.
So that’s how we KISS (keep it simple, stupid) and make budgeting work for us. What’s your budgeting system, and how do you make it work for you?
Hey guys! I don’t use any of the tools you use but some similar to do the same. For net worth have you considered personal capital? I try to check this to have a more positive feeling when dealing with money.
Thanks for the blog! Love reading it!
“It’s time to get real. Budgeting is no fun.” Well… unless you’re like me and get really excited about it! Living on one income can be tricky, but I chose to view it as a game- and it’s a game we are going to win. For several years, our budget and expense tracking was done with paper and pencil. This year, I played around with a few budgeting apps and then found out YNAB was free for college students (my husband). So, now we use YNAB to figure out our monthly budget and track every expense. I, too, like to track my expenses manually. When I’ve made a purchase at a store/restaurant, I usually enter the expense before I leave the premises. I keep track to the penny instead of rounding it. We use our credit card to purchase most things, but since I pay our balance almost daily (I’m a freak), I just put it as an expense from our checking out. The one area I’m not great at is tracking our net worth.
Way to go, Caity! That’s a great perspective to have. It sounds like you have a great system in place and have found a perfect app for you!
Oh my YES!!! I actually enjoy playing with our budget trying to get things *just so*. I LOVE YNAB for being so simple to use – my hubby absolutely hates all of this, and even he can use YNAB and keep us on track. I love that it’s manual, i used mint for a while and found it didn’t really help because I still didn’t have to interact with the purchases. Mint is still a great tool for having an overview of just about every account you could possibly have – and they track your net worth for you.
The hardest part of budgeting is the changing world around me. If everything stayed the same, I’d be golden. But having two middle/high schoolers has wreaked havoc on my budget this school year. I’ve changed the monthly allotment for “kids” expenses to a weekly one. It used to be here or there type money they needed on the weekend, but now I’ve changed it to $20/week. It makes my life calmer knowing that I have enough budgeted for a football game, ice cream, or the occasional movie with friends. The elementary child is still pretty cheap!
One way, I budget is to go back a year and look at what we spent in Quicken that was out of the ordinary. For that particular month, I am reminded of a friend’s birthday party, a trip, or a special event that only happens in that month. I also look back on my Outlook calendar at the previous year. It makes budgeting gifts, entertainment, and kids a whole lot easier when I know what’s coming.
Oh, I can’t even imagine how much our budget will change once we have teenagers! Kudos to you for finding a way to keep it simple and less stressful.
And that’s such a good idea to look back on the month’s budget from the year previously. Great tip!
I am interested in using Mint but have always been hesitant for security reasons – having to enter in all my account numbers and passwords gives me pause. How can I trust that the site is truly secure?
As evidenced by the constant data breaches you hear about in the news, it seems nothing on the Internet is completely safe. So it’s definitely a risk you have to weigh. We’ve never felt that we’re putting our financial safety in jeopardy, and Mint uses the same security standards as your bank. Here’s some more about how their security works: https://www.mint.com/how-mint-works/security
I spent a good deal of time researching this very concern, Andrea. Here’s more info on their security policies and how they keep your sensitive banking info secure: https://www.mint.com/how-mint-works/security
I am using AceMoney. It’s a PC program I purchased 6 years ago. Pretty nifty and it allows me to track my spending. I have tried other solutions, but this works better and I got really used to it.
Awesome! Thanks for sharing!
I do something pretty similar–thanks to you guys. I use HomeBudget to track spending and income (all entered manually) but I usually enter it once a week while checking Mint. I use Mint to check all my transactions and to easily make sure I have enough in the right accounts for all the auto withdrawls for bills. Then on the last day of the month, I have an excel spreadsheet that I enter all the actual spending budgets into by looking at HomeBudget so I can easily see where things went wrong or right that month within each budget category–Homebudget doesn’t have a very good way of looking at the big picture and Mint bugs me with how it categorizes/ budgets things even when I customize it. It sounds ridiculous but I don’t know if there is one program that could do everything I want and these three work together for me now.
I’m currently toying with the idea of doing cash only for my husband’s budget, my budget, “eating out” and the “everything else” budget since that’s where I tend to overspend the most. Groceries are groceries–I menu plan and stick to my list for the most part and we’ve got to eat so I don’t really worry about going over on that (although I try not to go crazy). So maybe having a few cash categories would help me since that’s more of a deterrent for overspending for me.
We feel the same way! No one system seems to work perfectly, so we kind of have to combine a bunch of different systems. We find HomeBudget and Mint annoying for the same reasons… maybe that perfect app will appear someday!
It’s worth giving cash-only a try for a month and seeing if it makes a difference in any of the categories you mentioned. I could use that for our “Home/Personal” section now that we’re living in a new place… I love decorating a bit too much!
I too definitely use the KISS principle when it comes to managing our family’s budget however it may involve a bit more manual data entry than what you guys use since I don’t use any computer apps but rather just 2 excel spreadsheets (monthly, yearly).
Data security is maintained because I keep this info totally off of my computer’s hard drive (using instead a removable USB stick), thus ensuring that it’s safe should my computer ever die on me (like my old computer did recently) or have to be accessed / repaired by some unknown dude at a computer repair shop.
I track (estimated) budget vs actuals for 4 income streams for both my wife and myself. Against that I also track the same for 25 expense categories. The devil is in the details, right! 🙂
Using the above I then have set up excel to track my % variances (ie., how close to my estimates were my actuals). This helps me to continually refine my monthly budget estimates to become more accurate.
At each month end, I then take my info from my monthly spreadsheet and append it into my annual spreadsheet. This helps me to track year over year trends in my income, expenses and spending flows.
Looks like a lot of work but really isn’t as I spend about 5 to 15 minutes a day updating my actual spending for that day. I do use an “everything else” or a “misc. spending” category but mine covers less spending categories than yours does – which is why I use 25 expense categories, preferring to directly track stuff like clothing, gas, entertainment.
Goodness! You have quite the system in place! It sounds like it’s working great for you… I especially like that you track yearly trends in your income and spending. You could probably give us all a good lesson in Excel!
I like the new and free every dollar app from Dave Ramsey 🙂 find it more user friendly than ynab
Great post! Thank you for sharing. I’d like to hear more from you.