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.