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11-07-2010, 05:27 AM
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#41
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Recycles dryer sheets
Join Date: Oct 2010
Location: In a van down by the river
Posts: 407
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This is a bit off topic but stay with me.
A real time fuel gage in your car can assist you in saving gasoline by changes in the way you drive or even the kind of car you drive. Smart metering of your electricity can assist you in saving on you light bill by getting you to turn off the lights or even the kind of light bulb you buy. These "economic" behaviors can cost or save you money over time. If the savings amounts to $20 or $30 per month, then as Susy Orman would say, put that into a mutual fund at 8% compounded appreciation and over twenty years you're talking some money here...
Between the Mrs. and I we have many funds in our portfolio. Tracking their performance individually, by account, by asset class... can help us make management/rebalancing decisions. Contribution limits have to monitored/maintained over the year to maximize deferred tax savings.
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11-07-2010, 06:23 AM
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#42
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Dec 2007
Location: Denver, Colorado
Posts: 6,258
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Quote:
Originally Posted by ERD50
... Seriously, I guess I still don't understand what the tracking gets you. We try to be good shoppers, so at that point, what good does it do to parse out that X% was 'groceries'? What are we gonna do that we aren't already doing? If we were happier with cheaper/less stuff, that's what we would buy.
Now for me, this is where the 'big picture' comes in. If I see more total $ going out than what I've set up for auto-deposits coming in (EZ to see, checking balance goes down!), we start to ask ourselves about the needs for this or that....
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Nobody is claiming that your method is defective only that it is not for them. (YMMV in action.) I am glad that it works for you and wish that it did for me. However, my experience with determining how much to spend by the amount in savings/checking or pocket was disasterous. Of course, I was much younger then and didn't have the reserves needed to recover from miscalculations... wait! That describes my current position. I always keep in mind the Hemingway quote about being asked how he went Bankrupt: "Slowly at first, then very rapidly."
Like everything, whatever lets you sleep peacefully at night is the correct course to take.
__________________
"It's tough to make predictions, especially when it involves the future." ~Attributed to many
"In theory, there is no difference between theory and practice. But, in practice, there is." ~(perhaps by) Yogi Berra
"Those who have knowledge, don't predict. Those who predict, don't have knowledge."~ Lau tzu
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11-07-2010, 08:10 AM
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#43
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jun 2006
Posts: 12,880
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I'm continuing to evaluate MD, and I'll report on it when I'm done.
So far it's looking like I'll have to give up some of the reports and graphs that I regularly use, if I make the switch. But I may switch anyway. Those nice reports and graphs are not worth the blood pressure rises that I get from every new bug I find.
__________________
Al
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11-07-2010, 11:32 AM
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#44
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Sep 2005
Location: Northern IL
Posts: 26,896
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RE: why track at this level of detail?...
Quote:
Originally Posted by RonBoyd
Nobody is claiming that your method is defective only that it is not for them. (YMMV in action.) I am glad that it works for you and wish that it did for me.
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I hope my questions are not coming across as me claiming anyone else's methods are 'defective'. I'm trying to figure out how people actually use this data to drive decisions, and if it would help me. I'm open to the idea, if there is some "there" there.
Quote:
However, my experience with determining how much to spend by the amount in savings/checking or pocket was disastrous. ...
Like everything, whatever lets you sleep peacefully at night is the correct course to take.
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Yes, whatever works for you, YMMV, etc. But I am trying to learn if this would work for me. That's why I'm looking for examples that drive decisions so that I can evaluate if those would do anything for me. For the most part, I seem to just be getting generalities ( paraphrase: 'I know how much I'm spending on what in real time', 'watch the pennies, dollars will take care of themselves'), or specifics ( 'bought two shirts'), that are not giving me insight as to how this would positively change my behaviors.
Quote:
Originally Posted by keegs
This is a bit off topic but stay with me.
A real time fuel gage in your car can assist you in saving gasoline by changes in the way you drive or even the kind of car you drive. Smart metering of your electricity...
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Those are good examples because they provide transparency where there was little before. And I'm thinking of installing some kind of simple/cheap smart electric meter for my own use, for that exact reason.
However, I'm having trouble seeing how telling DW that we spent $X on 'groceries' so far this month, and that is 23.1% ahead of where we were last month at this time is going to change her behavior at Costco. First, there could be all sorts of perfectly reasonable variation "Dear, remember we had a dinner party last week, you had the beer club over, and I made dessert for everyone for SIL birthday, they had a sale on cleaning supplies so I stocked up - should I pass up a sale on stuff we use just to level-load our budget, etc, etc". Geez, how do you account for this minutia?
I find it much more valuable to simply think about our food purchases - is this product a good value, or is this cheaper (or more expensive) product actually a better value?
The other example people give - gasoline purchases. This is even easier. I never just get in the car and drive for the heck of it. Our cars get reasonably good mileage, and I do track mpg just about every tankful. We combine trips, plan our trips, ride-share when we can. What do I learn from knowing I spent $XXX.XX on gasoline any given month? Again, if my driving habits vary, there is a good reason for it - what am I going to change? "no dear, we are not going to your Cousin's house warming party 2 hours away - we didn't use that much gasoline last month, so NO. Pictures will have to do."
Quote:
Contribution limits have to monitored/maintained over the year to maximize deferred tax savings.
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Excellent example. I run a simple spreadsheet for this. EZ. Cheap (free as in OpenOffice.org).
I still don't get it, and remember, this thread started over complications in using these programs.
-ERD50
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11-07-2010, 12:03 PM
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#45
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jul 2006
Posts: 11,401
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The way I see it:
You have input indicators (e.g. monthly income) and output indicators (e.g. monthly expenses) and process indicators (every detail of your spending, e.g. $25.99 on drycleaning).
It's perfectly true that you get what you measure. Most of us have easy access to input and output indicators. If we see unwanted trends, we may want to analyze one aspect of our financial management in depth. That's where the process indicators come in. An investment of an hour of time investigating opportunities for improvement can be very worthwhile. ('Honey, why are our heating bills out of control?" "Because you didn't redo the caulking, dear". "OK, I'll do it today.").
But analyzing every possible piece of data may not be worthwhile. For one thing, there is a law of diminishing returns. For another, the amount of data may be overwhelming. It may lead to "paralysis by analysis". If it takes one day a week of your long awaited retirement to do this, and if your blood pressure is going up (shortening your lifespan) because the program you bought to help you requires that you troubleshoot and reenter all the data, is that the best use of your valuable ER time?
Just my $0.02.
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11-07-2010, 12:24 PM
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#46
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Sep 2005
Location: Northern IL
Posts: 26,896
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Quote:
Originally Posted by Meadbh
The way I see it:
If we see unwanted trends, we may want to analyze one aspect of our financial management in depth.
But analyzing every possible piece of data may not be worthwhile. For one thing, there is a law of diminishing returns. For another, the amount of data may be overwhelming.
Just my $0.02.
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Far more than $0.02 worth. It's right on the money.
I realized a moment ago, my reaction is probably a reminder back to all the data collection I had to do at work. Most of it was collected for the sake of collecting it, I guess this thread touched on old wounds
Far more valuable (IMO) to dig deep where you see a problem. And mostly, those can be identified with a high level view. And the analysis probably has little to do with the numbers themselves, but the underlying drivers to those numbers. So, a totally made up example: dear, the past few months the account has been dwindling. The only think out of the ordinary is that we've been having a lot of large dinner parties lately, serving some pretty expensive food and wine (I said it was made up!). Is this something we want to continue, or is it time to cut back? We need to adjust somewhere else if this is what we want.
-ERD50
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11-07-2010, 12:27 PM
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#47
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Moderator
Join Date: Feb 2010
Location: Flyover country
Posts: 25,362
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Quote:
Originally Posted by ERD50
I still don't get it, and remember, this thread started over complications in using these programs.
-ERD50
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Because there's nothing to get. I think you're beating a dead horse at this point.
Some people like to track their finances in detail.
Others, like you, don't.
Those in either group are unlikely to be persuaded of the value of the other group's approach.
End of story.
__________________
I thought growing old would take longer.
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11-07-2010, 02:25 PM
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#48
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jun 2006
Posts: 12,880
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Actually, I don't like tracking my finances in detail, but I am willing to put up with it because I like getting the answers to questions I have about my finances.
__________________
Al
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11-07-2010, 02:43 PM
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#49
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jul 2008
Posts: 35,712
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I have used Quicken for only a couple of weeks now, but I am more interested in being able to see my stocks and MFs marked to value. My numerous accounts are a bit, just a little bit, worse than T-Al's 18 accounts.
My wife has been tracking and paying bills with her own spreadsheet. I entertained the idea of getting her to use Quicken, but am having 2nd thoughts. It's not just the problems like T-Al described, but more due to our own spending habits.
My wife wants us to use our Costco AmEx cards as much as possible, in order to maximize the kickback that they offer. Because of that, with Quicken, all we would see at the end of the month is a big charge of several thousand dollars for that credit card account, with no itemization. My wife is currently tracking the credit card charges and classifies them by hand already. Any additional software would just cause her aggravations for no added benefits.
__________________
"Old age is the most unexpected of all things that happen to a man" -- Leon Trotsky (1879-1940)
"Those Who Can Make You Believe Absurdities Can Make You Commit Atrocities" - Voltaire (1694-1778)
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11-07-2010, 03:46 PM
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#50
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: May 2005
Posts: 17,244
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Quote:
Originally Posted by Onward
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Thanks, but I do not want to put all of my finances online... I would prefer to have a stand alone program on my own computer....
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11-07-2010, 04:04 PM
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#51
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Moderator
Join Date: Oct 2010
Posts: 10,725
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I started out with MYM back when the PC first came out. Stayed with it when NationsBank bought it. It was abandoned by the bank when they got an online version, but I still actually use it! But primarily as a checkbook reconciliation tool. The DW gets a lump sum, so I don't have a lot of transactions to enter. I do keep my investment accounts in it, and it's a bit of a pain to mark my stocks and MF's to value (manual, not download), but I only do it monthly or quarterly. If there aren't any reinvestments, I just type the value from the statement and hit reconcile with adjusting transaction and relabel the adjustment to gain (or loss).
The benefit of this data entry is minimal but what is helpful is to compare long-term utility costs, long-term travel costs, etc. For instance, we were planning a rare summer cruise and I was able to look-up several past cruises in that we had taken in the spring (when prices are much less expensive). I determined that it was like 60% more expensive than usual (after adjusting for various things). Still went on the cruise but at least knew what we were getting into.
As for the AA / NW, I have been using the same spreadsheet for 20+ years. That actually takes quite some time to do (but every quarter only). I've written my own scraper that works for Fidelity statements, but I don't enter all that detail into the NW spreadsheet; it just takes the ins/outs/gains/losses. The result of this work is valuable in that it allows me to re balance. It also shows me the IRR of each investment, the IRR of a collection of accounts, the IRR over a specific period, and ad hoc analysis of my investments going back to the 1980's. Folks here seem to be pretty quote happy...what's the one about if you don't learn from failures, you're destined to repeat them?
--Dale--
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11-07-2010, 04:43 PM
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#52
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Sep 2005
Location: Northern IL
Posts: 26,896
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Quote:
Originally Posted by braumeister
Because there's nothing to get. I think you're beating a dead horse at this point.
Some people like to track their finances in detail.
Others, like you, don't.
Those in either group are unlikely to be persuaded of the value of the other group's approach.
End of story.
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I'm not trying to persuade anyone. I'm trying to learn if I'm missing out on something that I should be doing. There are plenty of things I get a kick out of doing that I wouldn't expect others to understand, so I'm fine if someone "likes" tracking their expenses. I can even kinda understand it, but I'm too lazy to want to do this w/o some clear benefit. Others can make a different decision, that's fine with me.
I may be beating a dead horse, or I may just be tenacious in seeking information . Seriously, I was hoping someone would come up with a "light bulb turning on" example that might inspire me, and I thought that that might come out with a bit more prodding.
-ERD50
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11-07-2010, 05:37 PM
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#53
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jul 2008
Posts: 35,712
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People are all different. Some like to track expenses to minute details, as I have seen here on this board, yet many say they only look at their portfolio quarterly or monthly. I don't understand!
I am fixated to my portfolio, and want to know how much I have to the last dollar, and keep a diary to log the value at the end of each day. Yet, I do not know how much we spend, and rely on my wife to track that. On the income side, if I say that as I write this, I do not know my year-to-date income, do people believe me?
My reasoning is that the inflow and outflow are small compared to what the market gives and takes from me each day, so why shouldn't I pay attention to what matters most?
__________________
"Old age is the most unexpected of all things that happen to a man" -- Leon Trotsky (1879-1940)
"Those Who Can Make You Believe Absurdities Can Make You Commit Atrocities" - Voltaire (1694-1778)
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11-07-2010, 05:57 PM
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#54
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Recycles dryer sheets
Join Date: Oct 2010
Location: In a van down by the river
Posts: 407
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Quote:
Originally Posted by ERD50
I'm not trying to persuade anyone. I'm trying to learn if I'm missing out on something that I should be doing. There are plenty of things I get a kick out of doing that I wouldn't expect others to understand, so I'm fine if someone "likes" tracking their expenses. I can even kinda understand it, but I'm too lazy to want to do this w/o some clear benefit. Others can make a different decision, that's fine with me.
I may be beating a dead horse, or I may just be tenacious in seeking information . Seriously, I was hoping someone would come up with a "light bulb turning on" example that might inspire me, and I thought that that might come out with a bit more prodding.
-ERD50
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You're living the high life ERD50.
If you had a financial goal that required you to use your before retirement savings income (assuming you're not retired in my supposition) to achieve that goal you'd be looking at your consumer spending.
Congratulations..
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11-07-2010, 07:08 PM
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#55
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Sep 2005
Location: Northern IL
Posts: 26,896
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Quote:
Originally Posted by NW-Bound
...yet many say they only look at their portfolio quarterly or monthly. I don't understand!
I am fixated to my portfolio, and want to know how much I have to the last dollar, and keep a diary to log the value at the end of each day. ...
My reasoning is that the inflow and outflow are small compared to what the market gives and takes from me each day, so why shouldn't I pay attention to what matters most?
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I seem to look less and less often, other than specific trades I may have "in play". Sure, the market changes are bigger than my spending changes, but one I can control the other not so much. When the market has had a big run up or down, I might look to see if I want to re-balance. I can tell that from the posts here, without looking at my portfolio!
Quote:
Originally Posted by keegs
You're living the high life ERD50.
If you had a financial goal that required you to use your before retirement savings income (assuming you're not retired in my supposition) to achieve that goal you'd be looking at your consumer spending.
Congratulations..
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No correlation at all. I have a well defined budget set by the amount I have automatically deposited in my checking account each month. As long as I stay within that, I meet my goals. Regardless whether I spend it in category X,Y or Z. And that is what I did my whole working life also. Money went into savings, 401K, etc and we lived off the remainder without micro-managing the budget, and after a while we generally had a surplus to put into savings.
Maybe others find the micro-managing to work better for them, but I'm still looking (beating?) for examples of how it helps (or maybe it is just a preference?).
-ERD50
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11-07-2010, 08:32 PM
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#56
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jul 2008
Posts: 35,712
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Quote:
Originally Posted by ERD50
...Sure, the market changes are bigger than my spending changes, but one I can control the other not so much...
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But I thought you said that in essence, your spending was somewhat "optimized" and there wasn't a whole lot to do about that. That has been true with me.
A while back, I was impressed with how people here knew their spending very precisely. I thought that being LBYM meant one under-spent his income, hence freed himself of the tedium of tracking the outflow. And of course I never thought of ER.
And this was being during the low market of 2008-2009, and my part-time income was drying up, I came to the revelation that the expenses, no matter how low one thinks it is, do matter a great deal if one has no income. Duh!
So, I asked for my wife's Excel spreadsheet and looked through it. There was little that I could do to reduce it without major changes in our life. I already dropped the travel. Tell the kids to drop out of college? Sell the 2nd home or downsize in this housing market? So, in a way, I could not tweak my expenses that easily.
But, but, but, about control over your portfolio.... Don't you have the "buy" and "sell" buttons that I do? Just click right here, if you can summon up the courage.
OK, OK... I did not click all that often, but I did click a few times. Still had a bit of luck left in me, thank goodness. But as they say, "Don't push your luck." So, I stop clicking, but watch it I still do. Yes, siree.
__________________
"Old age is the most unexpected of all things that happen to a man" -- Leon Trotsky (1879-1940)
"Those Who Can Make You Believe Absurdities Can Make You Commit Atrocities" - Voltaire (1694-1778)
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11-07-2010, 09:25 PM
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#57
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jun 2008
Posts: 13,150
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I use Budget Advisor ( Home Budget Software) for my budgeting. This gives me a quick picture (reports and graphs) of where my budget stands each year. Software is not free, but has 30 day free trial and is reasonably priced.
For my checkbook recording and balancing, I use Mr. Pen, Mr. Checkbook Register and Mr. Calculator . (note, being sarcastic here)
For my net worth, etc. I refer to my Vanguard summary statements and my own spreadsheets when I do my asset allocations.
The process works for me. Not overly detailed, but enough to see where I'm going.
When I used to use Quicken and record each transaction. I found that I'd rarely refer back and dig up old transactions. Instead, my main use was to see if I'm staying on course with my budgeting and making sure my checkbook was balance.
__________________
Have you ever seen a headstone with these words
"If only I had spent more time at work" ... from "Busy Man" sung by Billy Ray Cyrus
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11-08-2010, 07:54 AM
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#58
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jun 2006
Posts: 12,880
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If you're going to track at all, it makes sense to track "to the penny." It doesn't take that much more work (as long as you are downloading transactions), and checking for agreement with online balances is a good way of making sure that you don't have any mistakes.
Easysurfer made me realize that one of my top uses is to find out when I bought something. "How long did that laptop battery last?" "Is the dehumidifier still under warranty?"
__________________
Al
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11-08-2010, 09:04 AM
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#59
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Thinks s/he gets paid by the post
Join Date: Jul 2009
Posts: 1,934
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I manually track all expenditures and account transactions to the penny. The reasons are:
1) It allows me to check the accuracy of my financial institutions' numbers
2) It allows me to update accounts immediately. Balances are never off while waiting for a check to clear or an electronic transaction to go through
3) It subconsciously encourages me to spend less
__________________
And if I claim to be a wise man, it surely means that I don't know.
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11-08-2010, 12:11 PM
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#60
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Thinks s/he gets paid by the post
Join Date: Apr 2006
Posts: 1,684
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Quote:
Originally Posted by NW-Bound
...
My wife wants us to use our Costco AmEx cards as much as possible, in order to maximize the kickback that they offer. Because of that, with Quicken, all we would see at the end of the month is a big charge of several thousand dollars for that credit card account, with no itemization. My wife is currently tracking the credit card charges and classifies them by hand already. Any additional software would just cause her aggravations for no added benefits.
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I might be misunderstanding your post, but in Quicken you setup an account for each credit card and enter or download each transaction into the credit card account, giving you the itemization. Payments to the card account are recorded as a transfer from your checking account (or other account of your choice) to the credit card account.
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