No-Kill Finance

Historically, I’ve kept tabs on my money with…

Wait, what the hell am I talking about?  Historically?  I’ve only been “keeping tabs” of any sort for five or six months.  Anyway, in those five or six months, I’ve used a very simple program called Buddi.  I don’t recall how or why I became a Buddi user, as I’ve never heard it mentioned even in passing by any of the PF bloggers I read.  I think it was a random discovery when I was surfing through a list of free downloadable Mac OS X-native software.  I do recall that I had the program on my computer for a good year before I ever cared enough to start using it regularly…

Anyway, I’m a big fan of Buddi.  The general concept is the same as any other budgeting program, except that it’s 100% devoid of any bells, and about 98% free of whistles, too (and the remaining 2% can be toggled off if you’re a purist):  you set up accounts, you set up expense categories, and you record the transfers between those accounts and track the expenses into which your money disappears.  The program is capable of generating charts and graphs, but it apparently doesn’t have the ability to display those charts and graphs itself; it instead exports them to Firefox.  Or maybe it exports them to wherever you want them exported…mine go to Firefox.  The charts and graphs are a nice way to sit back and enjoy the fruits of all your careful documentation, a colorful and visually pleasing presentation of the data that will make you do a spit take and shout, “I spent HOW MUCH on my cat’s medication last month?!”

As mentioned (hinted at, really), I’ve been reading I Will Teach You To Be Rich by Ramit Sethi, author of the blog of same name.  He encourages a system of automation, because he is a smart man and understands that no 20-something is motivated enough to always stay on top of tracking his expenses.  (I’ve done pretty well, but I must confess that one of my expense categories in Buddi is “Disappearing Money.”)  So, he recommends Mint.com as a budgeting tool.  I’d heard this recommendation many times before, but his was the one that finally made me curious enough to sign up.  And since, I’ve been using both programs concurrently, to see which I prefer.

Like Buddi, Mint.com is totally free, so there’s no risk associated unless you consider posting your financial standing online to be a risk.  (Mint is renowned for its security, by the way, but I know that’s not enough for some people.)  Its main appeal is that it links up in real time with whatever bank/investment accounts you choose to give it access to.  The minute my debit card transaction goes through my bank’s website, it’s reflected in my transaction history in Mint.

This is where Mint shines:  Buddi is totally manual, where Mint is almost totally automatic.  It tracks my investment gains and losses (more on that later) as they happen, where I don’t even bother following them with Buddi because it would be too much work.  If I forget to record my expenses for four weeks, but all of those expenses were paid for by credit or debit, they’ll all have shown up on my Mint account automatically (but none in Buddi).  Plus, Mint seems to have a pretty good understanding of what categories these expenses fall into.  When the automatic bi-weekly transfer from my credit card to my bus card went through, Mint filed it under the “Public Transportation” budget tag without being told to do so.  Impressive, yes?

Unfortunately, I’m a cash guy.  And this is where Mint falls short.  You can use it to track cash spending, but it doesn’t keep a running tally of how much cash you have on you.  I’m a perfectionist, and Buddi humors me in that regard.  See, when I say you can set up “accounts” in Buddi, there’s no set definition as to what an “account” is.  With Mint, an account is anything you can give a user name and password to.  With Buddi, it’s anything you can imagine.  I have two very important accounts in Buddi that Mint just can’t help me track:

1. Wallet:  A cash account, and portable at that.  I like to have a record of where my cash has come from and where it’s gone.  This gives me 100% accuracy when tracking which budget categories my money is going toward, and it satisfies my newfound urge to have 100% control over every aspect of my financial life.
2. Owed to Katie:  My girlfriend and I pay for one another just about everywhere we go.  And, though my “Owed To” accounts are set up as credit accounts, if it’s my turn to pay and her turn to owe me, Buddi just documents a negative balance, meaning Katie owes me.  (At the moment, if I may pat myself on the back, that’s exactly the case.)  This removes the vague distrust that has always accompanied any “Isn’t it your turn to buy groceries?” conversation anyone has ever had.

But Mr. Sethi’s initial point stands true:  for anyone less obsessive than I’ve recently been, Mint.com would by far be the better option.  Also, embarrassingly, for anyone with a more typical income than me.  See, when I drop $5 in cash at a restaurant, I want it recorded and documented in the “Dining Out” budget category as having come out of my “Wallet” account, because five bucks is almost 1% of my paycheck going toward a lousy sandwich.  For most people my age, it wouldn’t even constitute half that much.

Unfortunately, although I can’t bring myself to dump Buddi for those reasons, I like the idea and the smooth, streamlined function of Mint too much to abandon it, too.  So I’m now using two pieces of budgeting software, when I used to struggle to keep up with just the one…though admittedly, Mint does most of its work for me.

At long last, final week is over and I’m returning to the world of blogging.  My mood is summed up perfectly in the title of a particularly overplayed Alice Cooper song.  And no, it’s not “I’m Eighteen”.  That would be weird.

In my absence (I wish I could say it was time spent studying, but there was also a lot of TV-watching and general laziness in there, too), a lot has happened that deserves reporting here.  The short list:

1. I received a sizable tax return.
2. I used said tax return to start a Roth IRA.
3. I watched as a minor financial meltdown took a bite out of my brand new IRA only days after I started it.
4. I organized my filing cabinet for ease of access during next year’s tax preparation.
5. I started reading, and have nearly finished, another personal finance book, which I may or may not review here in the near future.
6. Inspired by said book, I set up a fully automated online banking system to make sure that, even if I get lazy about being money-conscious (because, as I’ve proven with repeated absences on this blog, I tend to get lazy about everything from time to time), my money will keep saving itself.
7. Also following the reading of said book, I started an account with Mint.com, which is very sleek and amazingly smart, and very easy to use, but inferior to my former budgeting system in many ways (upcoming blog topic?).

Anyway.  This post was more for myself than for anyone else…I need to get back in the habit of writing in general, as well as writing on the blog that I pay money to maintain (ironic for someone who writes about trying to save, isn’t it?), and I was hoping that this practical use of a lunch break at work should be a good start.

So, in short, I’m back!*

*until I disappear again.

I’m the sort of guy who likes to have a road map.  I’ve never really thought of myself as such, but it’s true.  Hell, I’m the kind of guy who likes to memorize a road map…before I take on a task, I like to know exactly what to expect and exactly how to cope with anything that might go wrong.  I like to feel like an expert before I even get my feet wet.  I find, though, that people with the exact opposite tendency seem to have a lot more expertise in whatever subject I’m approaching.

Take Katie the Girlfriend, for example.  Where I’ve read several cookbooks in their entirety just to learn the theory behind cooking, she’s been known to roll her eyes at my technical approach and just cook, since she learned how to do so by actually, you know, doing so.  She doesn’t wait for a precisely preheated oven, she doesn’t use exact cooking times…she doesn’t even use exact measurements of ingredients.

Another example:  at the end of the winter (still arguably in progress given last night’s weather), I commenced in reading two gardening books.  While I was busy highlighting passages, taking notes, and sharing my newfound wisdom aloud, she was busy planting seeds, caring for seedlings, and transplanting plants outdoors.  Every time I would point out an error in her ways (“Um, the book says we shouldn’t move them outside for another few weeks”) she simply responds, “Oh well.  This is what I did last year and it worked fine.  We’ll start over if we need to.”  And I don’t know why this logic doesn’t sit better with me.  Clearly she’s more experienced than I am.  I, after all, am not the expert that wrote the book I’m reading.  Actually, I’m pretty dumb in comparison.

Enter tax season.  I don’t know a single thing about taxes.  I (I’m ashamed to admit) have never even prepared my own taxes before.  My dad has always taken care of them for me, and due to the fact that I’ve always been 600 miles away from my parents’ filing cabinet during tax season since before graduating high school, he’s never gotten around to teaching me how.

Now, since I’ve started finally growing up and putting effort into taking care of myself (a change that came far too late in my life), I simply won’t sit around and let other people do my taxes for me.  But, for some reason, I didn’t follow my usual routine and read 600 websites that instructed me on how to file…I just went in blind.

Why, with something so frivolous as grilling a pork chop, am I willing to read a 300-page cookbook, when I’m unwilling to read even a summary webpage in order to learn, for instance, what a 1040 form is?  I perplex myself sometimes…

One of the keys to my recent success at saving money is that I’ve had absolutely no time to do otherwise.  It’s helped me at times in the past, too…even when I was being less consciously responsible with my money, I found myself saving unintentionally by simple virtue of the fact that I didn’t have any free time to, say, go out to a movie.

Now more than ever I’m short on free time.  I’m in class four days a week and I work six (in order to keep full-time hours, therefore keeping myself medically insured).  My only day off is Sunday, and Katie and I usually make a point of devoting our Sundays to the inherently low-cost activity of lounging around the house and enjoying what little free time we share.

Of course, along with the glory of saving-money-whether-I-mean-to-or-not comes the stress of having little to no free time.  This is where the positive aspects of my busy schedule is often overshadowed by the negatives.  I hardly see my friends any more…not that I make as much effort as I could, but then again, I do legitimately prefer to spend my free time relaxing rather than going out and putting all that effort into being social (yes, I’m that big a hermit–it takes a lot of effort for me).

So, is saving money that I’d otherwise spend on maintaining my friendships really worth the 1.4% interest I get by putting those savings away in an account when the cost is a dwindling social life?  Unfortunately, until my final exam (four weeks and counting!!!), I don’t really have much of a choice.

I’m not the sort of guy to loudly and angrily undertake stands against companies.  If a business or organization offends my principles somehow, I tend just to stop giving them my money.  I don’t write letters of protest; I just go ahead with my silent boycott.  So it has gone with companies as large as Wal-Mart (whose ruthless disregard for the interests of small business offends me deeply) and as small as the corner store by my old apartment (which I felt, since it was never open when I wanted a late night snack, did not deserve my money during daylight hours).

Add to the list the convenience shop in the student center at UIC.  In between classes today, I got the idea that buying a bag of Doritos was the right thing to do.  (Note:  I was wrong on two counts, as I am both on a budget and on a diet.)  Upon purchase, though, the cashier took my five dollars, gave me four in change, crumpled my receipt and threw it in the trash can behind the counter.

What?  That receipt doesn’t belong to the trash can.  It’s MINE.  I paid good money for it, and will need it when I go to record my expenses (I shudder to call Doritos an “expense”) at the end of the night.  It’s not your right to throw it away like some common piece of trash.

Oh well, UIC junk-food depository.  We had a good run, right?

But what’s even worse?  To top off the fact that I’m now being forced into boycotting my main on-campus Doritos source (which will seriously impair my ability to cheat on my diet/budget), I’m going to be known as the jerk who asks, before every transaction, “Can I keep the receipt?  I’m on a tight budget.”

…when buying overpriced snacks.

A quick post to start the day:

I was reviewing my accounts this morning, and something was off:  I owed $1.50 on the credit account that I’m so proud to have finally maintained at $0.00 for a whole month.  How could this be?  Did an ineptly risk-averse identity thief steal my credit card number and only charge $1.50 to it, just to play it safe?

It turns out that Chase charges a minimum interest fee every month, even if you don’t carry a balance.  At my interest rates, I could carry about a $150.00 balance, and pay the exact same interest rate I pay for carrying $0.00.  This strikes me as somewhat ridiculous.  Granted, I don’t understand the intricacies of the banking world, but I do understand the phrase “no-fee credit card,” and I also am pretty familiar with the phrase “false advertisement.”  Am I really supposed to pay interest on money that I haven’t even borrowed?

Chase has been a pretty disappointing bank for a while now.  The random fees attached to the (here’s that false advertising claim again) “free checking” and “free savings” accounts have probably cost me a few hundred dollars in the several years since my BankOne membership was bought out and turned into a Chase membership (mind you, this happened without the CEO even asking my permission!).

Plus, although most of my savings is done with my ING Direct accounts now (ING rave review still forthcoming in a future blog), I still have a small Chase Savings account that I use as short-term savings to set money aside for rent.  So, although I’m constantly contributing and then withdrawing from the account, the $300 I have to keep in it to avoid a $4.00 monthly fee gains only 0.01% interest annually.  Stacked against inflation, I’m probably losing $10 a year by saving with Chase!

I’d imagine I’d do better with a local credit union…the chief convenience of Chase has been the plethora of ATM locations all around Chicago.  But, frankly, I rarely use ATMs any more.  Chase and I have just grown apart.  And I think it would be better for both of us (or maybe just better for me and not at all noticeable to Chase) if I just moved on.

Where do you bank, readers?  (I do have readers, right?)  Are you big corporate bank people?  Small local bank people?  Credit union people?  Cash-under-mattress people?  What do you like/dislike about your banks?  (Please refrain from complaining about your uncomfortable mattresses.)