How Does MoneyDance Do This?

[sengsational]

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--

 

[ERD50]

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'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

 

[NW-Bound]

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?

 

[keegs]

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

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..

 

[ERD50]

...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?

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!

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..

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

 

[NW-Bound]

...Sure, the market changes are bigger than my spending changes, but one I can control the other not so much...

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.

 

[easysurfer]

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.

 

[TromboneAl]

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?"

 

[Onward]

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

 

[Rustward]

...
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.

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.

 

[Nords]

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

4) It lets me know when I need to check under the car seats & floormats...

 

[Onward]

4) It lets me know when I need to check under the car seats & floormats...

I resemble that remark, sir.

 

[headingout]

I spend 1-2 hrs/week entering data in Quicken. I agree with others that this gives me an intuitive feel for our financial situation. I hope for the day when I feel financially secure enough to stop tracking expenses to the penny. Until then the benefits I see of using Quicken are:

1. Precluding mistakes from our financial institutions. (To be fair, I've never seen a substantial one.)
2. Optimizing within budget categories: contributions, groceries, and dining out are 3 areas that we have/will adjust depending on our financial situation.
3. Quickly looking up past transactions: Is it time to pay for the annual service contract again? How much have I given to that charity so far this year? How much was the water bill last quarter?

 

[Katsmeow]

Heck, a look at my waistline tells me we buy too much groceries. 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.

There are a couple of different things going on in tracking spending.

From a budgeting standpoint, there are a couple of schools of thought.

Years ago, I read an article

Limit spending to 60% of income and save more - MSN Money

The basic idea is that you take savings and investments off the top for example and it doesn't really matter what you spend your money on as long as you don't go into debt and save what you want to save.

Theoretically I agree with this. If I think I can afford to spend $X a month on non-committed expenses it really doesn't matter whether I spend $X on traveling, or on e-books, or on pretty clothes, or whatever.

If you really, really believe this then a case can be made that you don't really need to track individual expenditures because it doesn't matter what you spend it on as long as you don't spend too much.

I agree.

At the same time, however, most of us don't have unlimited funds and we need to plan our spending. Some people call it a budget. It doesn't matter in the end if I spend $100 this month on books or if I spend $100 on dining out. It matters a great deal, however, if I spend $100 on dining out and that extra $100 means that I go into debt or I don't have money to pay for the car repair that just showed up.

The budgeting program I use (YNAB) starts from the position that each month you give every dollar a job. You might give some dollars the job of being saved for retirement, others to pay the mortgage and others to spend on dining out. You also need to foresee the irregular expenses that either don't come regularly but are fixed (annual property taxes for example) or that are very irregular but not fixed (that car repair).

If I have a set amount of money that I want to spend each month it is helpful to know what I've spent in the past as that helps me to foresee future spending. For example, I tend to underestimate home repairs. I am always optimistic going forward. Yet, when I look back I realize that last year I spent $3000 on a well repair and another time there was an AC repair, etc.

 

[NW-Bound]

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.

Yes! What was I thinking? You can tell that I have not used this kind of program to its full utility.

Yes, my wife has been logging in online to our AmEx account to check posted expenses, but I never pay any attention (I do have access to our banking account, as it is my job to refill that) . And I am sure Quicken can automate the download of the credit card transactions

The question for me is whether my wife will like to use this instead of her own method. I will set it up and spend some time with it, to see if I will have problems like T-Al described earlier. No need to hear my wife's sneering that I try to fix something that ain't broke.

 

[NW-Bound]

... For example, I tend to underestimate home repairs. I am always optimistic going forward...

Yes, I underestimate all kinds of expenses...

Until I get my act together on the expense tracking side, I will just keep working part-time to maintain a slush fund...

 

[kaudrey]

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

ERD50 - this might start to get at the heart of why you don't think these programs would benefit you. I am the same way. I save first, and then I "allow" myself to spend what is leftover. So I don't really "budget", I just have a savings target. But many people can't/don't operate that way.

As you know, LBYM is hard for the majority of the population. Knowing all the details and keeping better track of where all the money goes can really help. I can mentally keep track of when we've been going out to eat too much, and change our behavior for awhile by eating in, but not everyone is that tuned in to their finances. Most people would say "I don't know where my money goes".

I used Quicken for about a year, once, and then gave up. I have a spreadsheet for retirement projections and keep track of my NW on a monthly basis. Annually I update my retirement projections based on what actually happened to my account balances. These things don't necessarily need as much analysis when they sort of work on auto-pilot.

 

[rayvt]

The problem with a "smart" program that does everything---is that it does whatever the heck it wants to do, and you have no clue as to what's going on inside the box. I tried Quicken many years ago and was totally frustrated with it.

Yeah, some people are what you might call anal-retentive about keeping track of everything to the penny. Unless you are running right on the ragged edge of poverty, that doesn't really get you anywhere, IMHO. You can get so bogged down in minutia that you can miss what's really important--the big picture. Maybe some people need to know things to the penny. But what does that gain you?

Do you really need to be able to look back and see that you paid $21.47 on that shirt five years ago? Who the heck cares, and what substantive decision can you do with that level of detail?

Before I retired I was a programmer. Things like Quicken tend to focus on minutia and pennies because it's free. A computer can keep track of expenses down to 4 digits after the decimal point as easily as whole dollars. But that's silly. It can drive you to beleiev that keeping track down to the penny is important. It's not.

Pencil & paper never loses data to a hard-drive crash, never has a problem with incompatable upgrade, works even if the power is off. And it has the clear advantage that you can EASILY SEE what's going on.

It is simple and easy and transparent to keep track of major cach inflow/outflows, and the balances of all your various accounts in a simple Excel spreadsheet. Once a month I log onto all the accounts to get the balances and enter them in the spreadsheet. Takes me all of 30 minutes. And I don't enter pennies or even whole dollars. For record keeping purposes I round to the nearest ten dollars.

And I don't spend any time or effort in fighting anything about how to account for $0.12.
Oh, and once a year I log into each of the credit card accounts and download the previous 12 months transactions. Should I even have the need to look back for an expense, it's all there.

Life's too short to spend much effort on trivialities.

 

[figner]

ERD50 - this might start to get at the heart of why you don't think these programs would benefit you. I am the same way. I save first, and then I "allow" myself to spend what is leftover. So I don't really "budget", I just have a savings target. But many people can't/don't operate that way.

Interesting, I don't have savings targets: I buy what I need, some of what I want, and anything left over gets invested. It so happens I'm pretty frugal and wind up saving a fair amount, but I'm often not sure of the spending details. So if I notice the money isn't piling up as fast as usual, it's nice to go to my GnuCash records and see what categories have been slurping cash for the last few months, or year, or whatever.

This leads to minor epiphanies like "Maybe I shouldn't buy berries every time I grocery shop," or "I need to hike more, I've been spending too much time at the mall buying clothes."

 

[Ed_The_Gypsy]

The problem with a "smart" program that does everything---is that it does whatever the heck it wants to do, and you have no clue as to what's going on inside the box. I tried Quicken many years ago and was totally frustrated with it.

Yeah, some people are what you might call anal-retentive about keeping track of everything to the penny. Unless you are running right on the ragged edge of poverty, that doesn't really get you anywhere, IMHO. You can get so bogged down in minutia that you can miss what's really important--the big picture. Maybe some people need to know things to the penny. But what does that gain you?

Do you really need to be able to look back and see that you paid $21.47 on that shirt five years ago? Who the heck cares, and what substantive decision can you do with that level of detail?

Before I retired I was a programmer. Things like Quicken tend to focus on minutia and pennies because it's free. A computer can keep track of expenses down to 4 digits after the decimal point as easily as whole dollars. But that's silly. It can drive you to beleiev that keeping track down to the penny is important. It's not.

Pencil & paper never loses data to a hard-drive crash, never has a problem with incompatable upgrade, works even if the power is off. And it has the clear advantage that you can EASILY SEE what's going on.

It is simple and easy and transparent to keep track of major cach inflow/outflows, and the balances of all your various accounts in a simple Excel spreadsheet. Once a month I log onto all the accounts to get the balances and enter them in the spreadsheet. Takes me all of 30 minutes. And I don't enter pennies or even whole dollars. For record keeping purposes I round to the nearest ten dollars.

And I don't spend any time or effort in fighting anything about how to account for $0.12.
Oh, and once a year I log into each of the credit card accounts and download the previous 12 months transactions. Should I even have the need to look back for an expense, it's all there.

Life's too short to spend much effort on trivialities.

Aye!

 

[RonBoyd]

The last few Posts, bring to mind the thought that this subject is very similar to that constant struggle most of have with weight control. Sure there are those who seemingly can eat as much of anything they want and stay forever [-]skinny [/-]thin but there are others who must control every [-]mouth-full[/-] taste and are still "overweight." So there are those who require help (perhaps in the form of a computer program like NutriBase) and those who believe that personal weight gain is proof of some mental defect. Thank goodness most of us are somewhere in between.

There are those of us that can seemingly spend to their heart's content without upsetting the Apple Cart and there are those who shouldn't be allowed anywhere near a checkbook/credit card. Most of us are somewhere in between... thank goodness.

 

[NW-Bound]

One thing I have pointed out before and want to stress again here is that LBYM'ers usually do not need to budget to the last dollar of expenses, when they are still working and still have earned income. But when they retire, living beneath the reduced means may require a bit more care. And when there's talk of the possibility of 2.1% SWR in the coming decades, higher taxes and means-tested SS, can one be too careful?

Just a viewpoint of a sloppy expense tracker...

 

[ERD50]

The last few Posts, bring to mind the thought that this subject is very similar to that constant struggle most of have with weight control. Sure there are those who seemingly can eat as much of anything they want...

I don't think that analogy is appropriate as you present it. This isn't about how much you eat or spend, it's about how you maintain a specific, defined number over the long run.

If you are going to diet, there is probably a set amount of calories you need to stick to. Pick a number. Now, maybe some need the help of a program to get the amounts/calories of what they eat to match up to that, and maybe others have been doing it so long that it has become second nature to them. Even to the point of "I'll have that extra slice of cake today, and make adjustments the rest of the week".

In fact, when I successfully lost weight. I just mapped out how many calories I could have at each meal and snack. Then I did some studying to learn what size portions of the various foods I ate would add up to those calories. But once I got a handle on that, I never tracked it, I had the big picture. Worked for me. But I put it back on because I just got tired/lazy of thinking about portion size at each meal. And my wife is too good a cook! And I'm weak.

So this has enlightened me a little. I can definitely see where someone just starting out, or with a major life-style change might need to track very closely to learn to maintain a new number or adjust to new circumstances. I made a pretty detailed budget for myself when I first started out. Though I don't recall tracking it in great detail, it was more for awareness that yep, I could pay the mort/rent, utilities, buy meals gas, insurance, put some in savings and have ~ $X left for fun and misc. But I don't see the benefit for someone who has managed to stay within a set budget for a long time - I guess I really am pretty much on 'auto-pilot'. If circumstances are different, it probably makes sense. But I guess it does surprise me that people who would appear to have been doing it a long time, still find it necessary to track at this detail level. I really wonder if it isn't just inertia.

-ERD50

 

[ERD50]

One thing I have pointed out before and want to stress again here is that LBYM'ers usually do not need to budget to the last dollar of expenses, when they are still working and still have earned income. But when they retire, living beneath the reduced means may require a bit more care.

Again, maybe just my personal circumstance, but my overall expenses didn't really change much after retiring. Health care went up, a few other categories went down, no major shift. Again, personal, but if retiring would have required a major budget cut, I wouldn't have done it. That might be the absolute right choice for others (and I would do it under different circumstances), and some may not have had a choice. Gotta do what ya gotta do.

-ERD50

 

[RonBoyd]

If you are going to diet, there is probably a set amount of calories you need to stick to. Pick a number. Now, maybe some need the help of a program to get the amounts/calories of what they eat to match up to that, and maybe others have been doing it so long that it has become second nature to them. Even to the point of "I'll have that extra slice of cake today, and make adjustments the rest of the week".

In fact, when I successfully lost weight. I just mapped out how many calories I could have at each meal and snack. Then I did some studying to learn what size portions of the various foods I ate would add up to those calories. But once I got a handle on that, I never tracked it, I had the big picture. Worked for me. But I put it back on because I just got tired/lazy of thinking about portion size at each meal. And my wife is too good a cook! And I'm weak.

And that is my point. Dieting (for most of us) is much, much more than counting calories -- and if you listen to, for instance, the Atkins folks -- that isn't even an important facet. The food you eat is made up of a kagillion things that need to be tracked and [-]learned about [/-]understood before long-term success -- vitamins, minerals, protein, fat, carbohydrates, etc., etc. -- read as "before going on auto-pilot" (again, most of us). Just as the money we spend is made up a kagillion separate transactions.

The proof is in your statement: "But I put it back on because I just got tired/lazy of thinking about portion size at each meal." What was it Hemingway said? "Slowly at first, then quite rapidly." I suspect it is easier for any one of us to make corrections in the "slowly" stage than in the "rapidly" one -- laziness aside.