I don't do "budgeting." I've tried. Budgets and I were just never meant to be. Call me reckless!
Instead... we track our spending weekly and summarize it monthly. We track net worth monthly. To keep expenses down we have frequent dialog about where our money is going, this conversation includes relating our spending to things we value. (By the way this is our main message for our kids... money... values... they should be connected.)
The way we set up our accounts and expense tracking is all centered around keeping our money talks concise, accurate, and up to date. We've more or less been on "auto pilot" for a few years now.
In part 1 of my no-budget approach to personal finance, I'm sharing how our accounts and expense tracking are set up. In parts 2 and 3 you'll see how we use these systems on a weekly and monthly basis to make decisions.
Our Spending and Investment Accounts
We don't believe in having separate checking accounts. My opinion on couples who state that they function better with separate accounts is... that's hogwash. Perhaps that works well to keep you from being overdrawn or keeps you out of hot water when you buy things you know he/she wouldn't approve of, but damn... those are shitty financial goals.
Here's where our our money resides...
- Chase Checking (Joint)
- Chase Credit Card (Joint)
- Mr. Sense - 401k
- Mrs. Sense - 401k
- Mr. Sense - Vanguard IRA
- Mrs. Sense - Vanguard IRA
- Joint - Taxable Vanguard Investment Account
Other Things We Track
- Mr. Sense's corporate stock
- Mortgage account
- Our home's estimated value
My custom spreadsheet is where I established our spending and income categories many moons ago. On a monthly basis we look at our spending and investment summary here. We also track our net worth here. The kids even have their own tabs in this spreadsheet to track their investments!
Below is a screenshot of one of the tabs from my spreadsheet. It's super simple to make a spreadsheet like this. Just a little bit of adding and subtracting going on here. If the thought of making your own spreadsheet like mine has your head spinning... you're not my people. Okay I'm just kidding, maybe I'll post a version I can share one of these days.
The goal of this sheet is to get a big picture view of a whole year's worth of spending. See that green box in the bottom? Thankfully it's green and not red! This is basically our flex money for the year. The majority of this will go into investment accounts over the course of the year!
This spreadsheet is my all important hub. From here I can generate graphs and chart of all types to give the kids a visual snapshot of our spending!
You might think this spreadsheet looks suspiciously similar to a budget. But it's not! I swear it! I'll explain more about how we use this spreadsheet in Part 3.
The Phone App - CheckBook
This could very well change if I find something I like better in the future, but the app I've been using since the beginning of 2017 is called CheckBook. You can find it for your Android or Apple device.
I have tried a shit-ton of budgeting software. I've liked some of them (YNAB is an example of a really good software that I used for a long time), and absolutely hated others. The challenge for me in finding a good app is two-fold. One, I'm incredibly picky and prefer to crunch my numbers the way I want to, not the way the "budgets for art majors" software thinks I should. And two (it took me awhile to figure this out) I don't really actually "budget," so an app for budgeting is not really what I need.
My criteria for my finance tracking phone app:
- Don't make me enter a budget amount, cause I don't want to
- Customizable categories and sub categories
- Allows split transactions
- Can transfer amounts between credit and checking accounts
- Gives me a summary of spending by category for the month
- Ability to export and backup data
- Uncompromising Security
The CheckBook App is not necessarily a perfect solution for me, it's just the closest I've come so far. This app doesn't sync with any bank accounts so it requires me to manually enter my transactions. This is good and bad, but mostly good for me (more about this in part 2). Your data is stored on your device, this works okay as long as you don't lose your phone and/or make sure to backup your info.
The one problem I could see for other users of CheckBook is the inability to sync data between multiple devices. Since I do most of the spending in our household (it's a tough job, but somebody's gotta do it) and Mr. Sense and I have the communication thing figured out, this isn't a problem for us.