Online Finance Software: A Minty Way to Keep Track of Your Daily Spending
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How much money did you spend on In-N-Out, Alerto’s burrito, and fast food last month? What about gas? Or Groceries? Do you ever wonder where your money went at the end of the month?
Keeping track of your daily spending can definitely be a challenge, but thankfully, there will soon be a very Minty way to do it using
online finance software!
So why is it important to keep track of your daily spending?
- Doing so lets you know where your money is going, so you can direct it to where you really want it to go.
- 2. It allows you to create a reasonable, realistic, and workable budget. (Yes, we said the “B” word.)
If you’re inclined to a start a budget, the very first thing you should do before you start setting limits is to find out your actual spending habits. If you don’t have a clear picture of how much money you actually spend on a specific category, it will be very easy to set unrealistic and unattainable goals.
Example: You have a family of five and your actual monthly grocery spending is about $650. Without knowing your family’s actual spending, you set a goal of $500 for groceries in your budget. Of course, you easily exceed the budget. You may get frustrated and decide that budgeting just won’t work for you.
Even if you don’t want to budget, keeping track of your daily spending with budget planner software allows you to know where your money is actually going, so you can better direct that money toward an area you really want it to go. After all, how many of us have spent more than we realize on shoes, entertainment, and eating out without realizing it?
Example: You don’t have a budget (because you already have the discipline to put away a good percentage of your income every month). You notice that money is getting just a little bit tighter in recent months, so you log into your favorite free personal finance tool, and sure enough, there is a spending warning on the “Eating Out” category. You make a mental note to stop treating your less generous friends, and all is well again.
Give Me Some Real Life Examples, Please
Imaginary scenarios aren’t cutting it, eh? Let’s take a look at how fast food spending surprised a certain anonymous person.
For the past few months, I’ve noticed that I’m missing a couple of bucks here and there. Being the curious budgeter that I am, I logged into my favorite free personal finance tool, and typed in “Gas.” I’d been driving a bit more recently, so I thought it’d be a good place to start.
Hmm… Everything looks good. I did drive a bit more during April, but that one extra tank of gas shouldn’t account for the missing pieces of eight. Fun observation: I pump about the same amount of gas during each trip to the gasoline station, which is about 12 gallons. Even though I haven’t changed the amount of gas I pump, the price has steadily gone up — a reflection of recent raising gas prices. D’oh!
Deciding that gas wasn’t the culprit and taking another bite out of my juicy carne asada, I typed in “fast food.”
Uh… $112 on fast food? Woops?
You’ll notice that before the week of March 28, I didn’t even spend a dime on fast food. Quite a contrast in spending habit, and I didn’t even notice it. Five dollars for a combo meal here and there can really add up over time.
If I didn’t decide to check my fast food spending and keep the spending trend up, I would quickly spend about $700 per year on fast food alone (not including eating out at restaurants). Yikes!
Different Methods to Track Your Daily Spending
The important thing about keeping track of your daily spending is to find the method that works best for you. Having said that, here are various different methods you can try out:
- The small notebook – A great way to record cash spending! Carrying a small notebook around allows you to quickly jot down cash purchases (or any other type of payment). It’s especially easy helpful for anything you buy without your credit or debit card, because you can easily have a large expense category called “cash” without knowing what you really spend.
- The debit/credit cards – Handle all your purchases by debit or credit cards. This is possibly the easiest way to keep tabs on your expenditures, because all your transactions will be available via your bank statement or credit card bill. It’s a very good method for those that can pay their bills in full, but not such a good method for those that carry balances.
- Keep receipts – It’s very simple and straightforward, but can get a bit disorganized if you forget to record the expenses or update your receipt shoe box. The great thing about receipts is that you can often distinguish certain spending habits without even physically recording the amount of money spent. When 20% of the receipt is from Target or 7-11, you can easily tell where you money is flowing to.
- Minty budget planner software – Use the many available free spreadsheets online, or create your own (we recommend a very simple spreadsheet from Of Zen and Computing). Tools such as Microsoft Money and Intuit Quicken can also be handy to track your daily spending (although in our opinion there are simpler, cheaper applications out there).
Whatever you decide, choose a method that you’re comfortable with and can keep up with. Try keeping track of your spending for a month and then add it all up at the end of the month. You may be surprised to find out how much you’re spending on trivial expenses!
Quick suggestion: When you categorize and add up the expenses, make it meaningful by creating categories that means something to you. For example, you can have a large category called “food,” but that won’t really let you know where the money is going. Specify a category for “eating out at sit-in restaurants” and you’ll be able to better distinguish between your spending.
What to Do With the Numbers?
You can take your expenditure tracking a step further by creating a budget, making a mental note to direct your spending toward higher priorities, or inputting the numbers in convenient online calculators such as the Daily Spending Calculator from Canada’s Office of Consumer Affairs. It’ll allow you to see the really big picture.
Example: Using the calculator, I input my weekly spending on fast food (according the graph above), which is about $14. I plugged in my age of 24, maintained the retirement age of 65 and inputted the expected inflation rate along with expected investment return. The results, I’ll admit, are mind boggling.
The total amount of money I’ll spend on fast food until my retirement would amount to about $30,000. Had I saved and invested the money instead, I would have gained a return of $270,000. All from a daily spending of about $2 for a quick lunch!
Tracking Your Daily Spending Check-List
- Find a method of tracking that works best for you and be consistent!
- At the end of the month, total the amounts in meaningful categories.
- Decide if your spending is where you want your money to go.
- Take the next step and create a budget!
Have your own secret sauce way to keep track of your daily spending that wasn’t mentioned? Feel free to share!
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9 Comments so far
leave a commentI’ve been waiting for a quick, easy, web-based financial management tool.
I’ve tried making excel spreadsheets for budgeting, but have been terrible about maintaining them. I generally spend a lot of time on it once every 4 or 5 months, with little to no activity in-between. And then money still seems to just disappear.
I’ve been wanting to try this Mint software tool ever since I came across it, but haven’t been invited to beta yet. Luckily I came across something else to hold me over in the meantime.
I recently discovered MyPortfolio on Bank of America (a free service when you have an account there). It’s extremely convenient. I entered in all of my login info for every account I have (credit cards, student loans, investments, and even airline points) and it keeps track of every transaction and automatically categorizes everything. So far the categorization algorithm seems to work pretty well (occasionally I have to switch Quik Mart from “Groceries” to “Gasoline/Fuel”).
I can then view a few nice graphical representations of my spending (a pie chart across spending categories, cash flow time lines, budget vs. actual bar graphs, and %credit line utilization graphs). Visualizing this information has been helpful for keeping me more conservative in my spending. Additionally, it is helping me plan a bit better for future saving/spending.
Some areas for improvement:
1) It is not well-advertised or even positioned very highly on the BoA homepage (you have to look down at the “Other Accounts and Info” category when you log in). Maybe they’re still testing features out and aren’t ready to get everyone using it.
2) Doesn’t provide any advice for what to do with your money. No “hey, you have $5,000 sitting in this checking account that could be earning you x% more in interest!”
3) Somewhat limited graphical representations of data. For example, I can’t make a graph of my spendings on “Gas” specifically over the past year. Not yet anyway.
4) Doesn’t quite have that “wow, this is a cool Web2.0 gadget” feel. But I guess that’s just a slight taste for bubbly letters and bright colors that I’ve acquired.
Overall it seems like a good tool. And if you use BoA, there’s the added benefit of just having one place to go for all your financial needs, and theoretically you already trust them with that information. It does leave something to be desired as far as features go, however.
I’m really interested in trying out the Mint tool so I can see which I prefer.
My personal finances can definitely use a mint. Between the budget spreadsheet, two checking accounts, one savings account, and one credit card account (plus the interest earned on the checking, savings and credit card accounts) I’m starting to become lost in a sea of imaginary money.
Online banking only helps so much when you have to visit three separate bank sites, and interest earned is never incorporated into the account. And whiles a spreadsheet budget is an excellent jumping off point for managing your finances, it’s not really fool-proof. It’s nice for analyzing things AFTER the fact, but doesn’t do too much in the way of truly monitoring your spending habits while they’re happening.
I’m ready for a financial upgrade… may I have a mint please?
I think the absolute best way to keep track of spending is through your online checking statement as well as recording it on a spreadsheet budget. Set catagories across the spreadsheet and the total you expect or want to spend. Then each day record the amounts spent in each category. Everyday you will know how much you have left. Then once a week print your checking account transactions from online and go over it with a fine tooth comb. You may have missed some things that you didn’t put on your budget. You will also be able to keep track of fees and things you might not even knew about like the automatic debits for something you signed up for a year ago! Post the checking transactions on your list when you’re done to remind yourself what you are spending. One of my goals is to see how small I can make the list each week. Do I want that trip to Carl’s Jr for $20 on my fridge next week? It really helps control spending.
I can’t wait until My Mint software comes out. It looks like the program will help out more.
I’ve tried making excel spreadsheets for budgeting, but have been terrible about maintaining them. I generally spend a lot of time on it once every 4 or 5 months, with little to no activity in-between. And then money still seems to just disappear. My problem with spreadsheets is that they require too much tedious work to solve a problem that should just be automated.
I recently discovered MyPortfolio on Bank of America (a free service when you have an account there). It’s extremely convenient. I entered in all of my login info for every account I have (credit cards, student loans, investments, and even airline points) and it keeps track of every transaction and automatically categorizes everything. So far the categorization algorithm seems to work pretty well (occasionally I have to switch Quik Mart from “Groceries” to “Gasoline/Fuel”).
I can then view a few nice graphical representations of my spending (a pie chart across spending categories, cash flow time lines, budget vs. actual bar graphs, and %credit line utilization graphs). Visualizing this information has been helpful for keeping me more conservative in my spending. Additionally, it is helping me plan a bit better for future saving/spending.
I’ve also heard about this online tool called Wesabe (www.wesabe.com) that looks interesting. Does anyone have experience with that?
@Elissa – We hope to share the mint with you soon! I can definitely relate to what you’re talking about. As I switch my banking more toward online banking, all I really see these days are just numbers flying from one account to another. I hardly see cash and hardly carry anything more than a $20.
And you are right that spreadsheet works well after you have spend the money, not during the spending process. We are expanding our invite-only beta as time passes, and will definitely try to include everyone that’s interested in using Mint.
@Misti – That would definitely keep anyone on top of the game, if they log in and check everyday. It’s actually what I use to do. Everyday I would wake up, and religiously log into each individual accounts, check the numbers… see what transactions pop up and record the transactions I want onto a notepad, then at the end of the month I’ll throw them in the spreadsheet for whatever category I’m tracking for the week.
The thing about doing stuff like this (and I really agree with you that it’s the best way to be really on top of all your accounts), is that you have to really enjoy it. And I certainly did, because I was a personal finance junkie for awhile.
It allowed me to catch this random $7.95 fraudulent charge on my checking account. Something I could have easily missed, had I not check my balances everyday.
I haven’t done the logging in everyday thing anymore, as I have a better handle on how much money I have each month and where they’re going (or so I thought until the fast food incident), so I generally just log in every other week now to look at the numbers.
P.S. We really can’t wait to share Mint with more people too (as we fine tune it). I know it sounds cheesy, but it’s true!
“Tools such as Microsoft Money and Intuit Quicken can also be handy to track your daily spendings (although in our opinion there are simpler, cheaper softwares out there).”
“Softwares”? Please tell me that’s a typo
But yeah, totally, and hey, that’s why we’re here, right?
@Ben: Hah! Okay it’s a typo
Plurality aside, I’ll change it to applications since that fits more on what I was talking about too.
@Rick: First, let me apologize as I believe the spam filter ate your first comment and it wasn’t fished out until recently (forced you to type your comment again!) Secondly, you made many great points!
MyPortfolio from BoA utilizes Yodlee to aggregate many of the financial insitutations out there, and Mint have also partnered with Yodlee to provide you with many of the same functions you get from MyPortfolio (best of all, it’ll be free to everyone — not just BoA customers!)
Some comments on your points:
2. Exactly. Unlike MyPortfolio, Mint will be able to help you do more with your money by finding personalized ways to help you save and make more money.
3. We understand the limited presentation of data too, hence the nifty graphs we have above for whatever categories you want
4. Although web 2.0 doesn’t always have to be bubbly and colorful — Mint will strive to be simplistic in nature and easy on the eyes. You shouldn’t need a 50 page instructional manual to use Mint — and you won’t.
As for Wesabe, although I haven’t try it out myself, I do know a few people that actively use it. The tips that you can gather from the community seems to be quite helpful if they apply to your particular situations.
Lastlyy, we are working hard to get Mint out the door so that you’ll be able to choose what suits your need better (and we hope it’ll be Mint!).
I had been using an excel sheet for a long time and finally came across budgetEDGE (www.budgetedge.com). This is by far the most comprehensive online budgeting/expense tracking tool I have used.
I have tried mint and I love their charting and the overall look of the site, but I choose budgetEDGE simply because I don’t want to connect to my bank account and because budgetEdge offers more features such as manual account entry, credit card tracking, and basic asset and debt management. There is a basic charting module (not as good as the one on mint) that graphs aggregate demographic data and I hear these guys are going to release a more advanced version soon.
I find the interface very simple and intuitive and didn’t have to wait a month for an invitation to join. I would definitely recommend this tool to people looking for a complete budgeting and financial planning experience.
a small notebook! are you kidding me? what is my iPhone for? why can’t you just add feature that lets me track cash on Mint with everything else I’m tracking? a small notebook…. is this 2010 or what?