How Does MoneyDance Do This?

[ChrisC]

Okay, another Cliché: "God is in the details."

What action can one take as to "AA, overall performance trends, etc" without knowing how you got there? For instance, I hear of those who believe that 75/25 (or whatever) AA is ideal and (seems to me) blindly sell and buy to maintain that ratio. How productive is that?

Getting so bogged down in details and exerting so much effort in getting these details could be counterproductive or of marginal value.

If you like getting into the nitty gritty of details that's another thing altogether, but I'm not sure getting involved in every detail is worth the result: the juice is not worth the squeeze to me.

 

[RonBoyd]

Getting so bogged down in details and exerting so much effort in getting these details could be counterproductive or of marginal value.

If you like getting into the nitty gritty of details that's another thing altogether, but I'm not sure getting involved in every detail is worth the result: the juice is not worth the squeeze to me.

You understand I am not advocating making a full-time j*b of it? I am speaking of perhaps an hour or so a month. But you are correct, "details" and "bogged down" are very personal things and mean different things to different people.

Another cliché: "You say potato, I say potahto."

 

[keegs]

Okay, another Cliché: "God is in the details."

What action can one take as to "AA, overall performance trends, etc" without knowing how you got there? For instance, I hear of those who believe that 75/25 (or whatever) AA is ideal and (seems to me) blindly sell and buy to maintain that ratio. How productive is that?

absolutely

 

[Nords]

I used to do it that way. With local checking accounts, roth iras, trad iras, taxable, there are 18 different accounts. Every month many of them have dividends reinvested, etc. Each would have to be typed in with share price, etc.
In the past I would just occasionally enter dummy data to bring things up to date, but even with the hassles, downloading data is faster. For everything except the VA stuff, it works smoothly.

I'm in the same situation, but I only enter some data a few times a year-- for example IRAs don't get updated more than quarterly.

I was just trying to suggest that there may be ways to limit the mistakes by entering data manually. Maybe there's a way to not download VA data along with the rest.

Another benefit to manual data entry is that it helps me think about where the money is going, and reminds me of things that need doing. Just the act of manual data entry serves as sort of a portfolio review and planning session. I don't know if I'd get that benefit from downloading.

 

[TromboneAl]

I've been playing with MoneyDance. My first impression was that it is too primitive, and the reports were too limited, but on closer inspection, it may work out.

 

[Meadbh]

I tried Quicken once. I had the problems Al is having. I found it inaccurate and confusing, so I gave up on it. I check all my accounts online at least twice weekly, and at least once a year I do a big NW calculation and trend analysis on Excel. That's enough navel gazing for me.

 

[braumeister]

OK, but for me personally, I wouldn't want to mess with a separate program for this. I just throw the receipt in my tax file, or maybe enter it in a spreadsheet that I keep for tax entries. Pretty simple.

-ERD50

I often find myself looking up the details of expenses that are as much as 5 or 6 years in the past, occasionally even longer.
Trying to deal with that much paper (receipts, statements, etc.) would drive me crazy. I really like being able to do it in seconds on the computer.

 

[keegs]

My bank provides an Intuit budgeting tool called Financeworks that captures all my credit/debit/share draft transactions, catagorizes them and presents the data graphically. It does trending and goals, email allerts...etc.

I was told that in 2011 Fidelity is coming out with a performance tool for broakerage/IRA/401k accounts that's supposed to provide account trending info for any given time period.

 

[ERD50]

I often find myself looking up the details of expenses that are as much as 5 or 6 years in the past, occasionally even longer.
Trying to deal with that much paper (receipts, statements, etc.) would drive me crazy. I really like being able to do it in seconds on the computer.

I'm trying to understand how these programs help with that. What kind of expenses? If I downloaded my CC statement or checking statement into a program, it wouldn't tell me much, maybe only that on a certain date I spent $535.42 at Home Depot, and $125.99 was on a light fixture that I want to track the purchase date on. I'd be hard pressed to find that $125.99 out of the other purchases.

What I do find handy is when I buy things on line. I normally get emailed a detailed line-by-line description. Those get saved to a "Purchases" folder, and my hard drive is indexed so context searches come up with answers as fast as I can type.

Okay, another Cliché: "God is in the details."

What action can one take as to "AA, overall performance trends, etc" without knowing how you got there? For instance, I hear of those who believe that 75/25 (or whatever) AA is ideal and (seems to me) blindly sell and buy to maintain that ratio. How productive is that?

I can look at the performance of a fund/stock on the Internet. I'm really not getting how my personal records are going to tell me anything more than that. Now, I've been curious in the past if some transaction I made really panned out as I hoped. But I track those transactions for tax purposes already, so I've got everything I need. For non-taxable, I track it if I think I'll be interested. But not every dividend, etc - again, that is all on the Internet. There are some specific things that I'll just make a spreadsheet entry on if I want to track it.

I'm not trying to be contrary, people can do as they please, but I am trying to understand what they are getting out of this that makes dealing with a separate program worthwhile. So read my comments as "Should I be doing this, am I missing out on something?" and not as "Why the heck do you bother with this nonsense?".


-ERD50

 

[braumeister]

I'm trying to understand how these programs help with that. What kind of expenses? If I downloaded my CC statement or checking statement into a program, it wouldn't tell me much, maybe only that on a certain date I spent $535.42 at Home Depot, and $125.99 was on a light fixture that I want to track the purchase date on. I'd be hard pressed to find that $125.99 out of the other purchases.

OK, I see your point.
In my case, I download no transactions from anywhere; I don't trust the application to get them right, and I don't like the idea of giving it my password access to other accounts.

What I do is to simply enter everything manually. Once a week or so, I go to my investment accounts, look at the transactions, and enter them in the software the way I want them. I do the same for bank accounts and credit card accounts.

Usually, there isn't much to enter that way, because I enter the transactions at the time I make them, so the weekly check is really more of a double check.

I use the Memo field in the software transaction register to fill in the details of transactions. For example, if I buy something with a credit card, I'll enter the date, merchant, amount, category, and "2 shirts" or something like that.

It's probably more trouble than many would want to deal with, but I've been doing this for many years and I'm comfortable with it. Knowing my spending by category, payee, and with specifics like the memo field, I find it really easy to work out my budget, analyze my spending history to project future needs, and generally reassure myself that I'm likely to remain solvent.

 

[Nords]

What I do is to simply enter everything manually. Once a week or so, I go to my investment accounts, look at the transactions, and enter them in the software the way I want them. I do the same for bank accounts and credit card accounts.
I use the Memo field in the software transaction register to fill in the details of transactions. For example, if I buy something with a credit card, I'll enter the date, merchant, amount, category, and "2 shirts" or something like that.
It's probably more trouble than many would want to deal with, but I've been doing this for many years and I'm comfortable with it. Knowing my spending by category, payee, and with specifics like the memo field, I find it really easy to work out my budget, analyze my spending history to project future needs, and generally reassure myself that I'm likely to remain solvent.

Exactly, but the labor of this task is what everyone refers to as "tracking your spending". I'd find it impossible to do this from just downloading credit-card statements. It's the data entry, the error-checking, the review, and the analysis that helps me get a handle on what happened to it all.

It's also very handy for answering spouse's occasional comment "God#$%^mit, when did we %^&*ing buy this %^&*ing piece of @#$%?!?"

 

[TromboneAl]

It sounds like those of you who haven't done much automatic downloading aren't really understanding how it works.

Most of the transactions are clearly understood and categorized as they are downloaded. Transactions from Safeway are groceries, and from Chevron, gasoline. When I see something from amazon, I just search my email for the amount if I can't remember what I purchased.

Yes, sometimes you don't remember what you got at the hardware store, for example, but if you download monthly, you can usually recall it. Other times you just assume that what you got was just miscellaneous hardware.

Also, you do check and "accept" each transaction, so it's not as if it gets into the application under the radar. You still get a feeling for what you spent money on.

I just counted an average of 44 transactions/month on just the credit card (all monthly bills paid that way). That would be a major investment of time if entered manually -- way too much work.

 

[ERD50]

Most of the transactions are clearly understood and categorized as they are downloaded. Transactions from Safeway are groceries,...

Glad it works for you, but DW buys most 'grocery' stuff at Costco - it's a real mix of food, paper goods, cleaning products, batteries and other odds and ends, etc. For me, HW store is a mix of maintenance, home improvements, little hobby projects, etc.

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.

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. But as I say, we are already careful shoppers, so that would normally translate to maybe cutting back on some of the more discretionary items, like delaying a home improvement project or 'toys' or some other purchase outside of day-to-day existence.

-ERD50

 

[Nords]

It sounds like those of you who haven't done much automatic downloading aren't really understanding how it works.
I just counted an average of 44 transactions/month on just the credit card (all monthly bills paid that way). That would be a major investment of time if entered manually -- way too much work.

As long as it takes less time than:

After another wasted 45 minutes dealing with the Quicken bugs, I'm once again looking for alternatives.
I realize that one major irritation is that for every bill paid via my VanguardAdvantage (VA) account, I must go through this:

1. Manually edit the downloaded Money Market transaction to indicate that the money was transferred to the VA account.
2. Accept it.
3. Find the matching transaction in the VA account. If two checks cleared on the same day, the amounts are combined.
4. Find the matching check entry in VA or add one and edit it. If I use a memorized payee, the amount disappears, and I must re-enter it.
5. Accept the transaction.

Also, there are usually some quicken errors involved. For example, it may show the check as new rather than detecting a match with an entry I've already made.

 

[deserat]

I have MoneyDance and do both manual and auto entry. When I download my credit card and checking transactions, MoneyDance allows me to split the transaction and properly allocate the money to the different expense buckets. I don't go down to "2 shirts", but I do split transactions into the different categories. Living here in Europe, I use cash for quite a few of my transactions, so I save the receipts and input the information - have to use the rate of exchange, so the amounts aren't exact due to the changing nature of the exchange, but it gives me a good approximation of what I'm spending on which categories. I use that to direct my behavior or reinforce it.

I do not track my investments with MoneyDance, my husband is doing that with Quicken - and he is not very happy with Quicken. For example, we upgraded all of our VG to Admiral just last week or so and it took him quite awhile to figure out how to do that in Quicken.

For a more sophisticated analysis, I use an excel spreadsheet. I wanted to know our AA - wasn't easily done due to the different accounts (yes, we should consolidate a bit more, we are working on it) - I put the info in a spreadsheet, used the pivot table function and had a nice little analysis.

I've bounced around in my money tracking - started out with Quicken for DOS and loved it - then ended up with an excel spreadsheet - didn't track for awhile and then broke down and bought MoneyDance last year. For the simple tasks I want for MoneyDance to do, it's been great.

Bottom line - YMMV with any tool

 

[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 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.

 

[RonBoyd]

... 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....

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.

 

[TromboneAl]

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.

 

[ERD50]

RE: why track at this level of detail?...

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.

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.

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.

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.

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...

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."

Contribution limits have to monitored/maintained over the year to maximize deferred tax savings.

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

 

[Meadbh]

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.

 

[ERD50]

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.

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

 

[braumeister]

I still don't get it, and remember, this thread started over complications in using these programs.

-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.

 

[TromboneAl]

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.

 

[NW-Bound]

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.

 

[Texas Proud]

budgetpulse.com

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....