best way to get a handle on expenses?

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gips
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best way to get a handle on expenses?

Post by gips » Wed May 03, 2017 9:16 am

I've been retired since aug, I have a general sense of our expenses but would like to drill down into specifics. Having said that, I don't want to spend an hour per day entering expenses, so I'm looking for something easy. Mint has a pretty complete picture but at times I've found double entries, poor transaction descriptions and it doesn't seem to apply transaction characterizations to subsequent transactions.

would love recommendations on what's easy and fairly accurate.

tia,

livesoft
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Re: best way to get a handle on expenses?

Post by livesoft » Wed May 03, 2017 9:20 am

Use a credit card or two for all expenses. Never use cash for anything. Then rely on the annual summary of expenses from your credit card.

More complicated: Have a few credit cards and use one for one set of expenses, another for other kinds of expenses, and another for ....

Your bank's free online bill pay can also help with annual reports on what your spent.
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abner kravitz
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Re: best way to get a handle on expenses?

Post by abner kravitz » Wed May 03, 2017 9:25 am

I pay everything via credit card, and at the end of the month download the transactions to excel. I categorize each expense by pre-determined budget categories. It takes about a half-hour per month.

gips
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Re: best way to get a handle on expenses?

Post by gips » Wed May 03, 2017 9:28 am

thanks...we have a number of banking transactions for vendors that don't take credit cards. a separate download I guess.

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midareff
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Re: best way to get a handle on expenses?

Post by midareff » Wed May 03, 2017 9:46 am

livesoft wrote:Use a credit card or two for all expenses. Never use cash for anything. Then rely on the annual summary of expenses from your credit card.

More complicated: Have a few credit cards and use one for one set of expenses, another for other kinds of expenses, and another for ....

Your bank's free online bill pay can also help with annual reports on what your spent.

Livesoft has a great start for you and make sure it is at least a 2% cash back card. You can also take an excel sheet and start a list of categories.
Auto payment
Auto insurance

home mortgage
home property tax
home insurance

Health insurance
expected co-pays
prescriptions

IRS

groceries

cable

internet

phone

add in expenses for kids and so forth including how detailed you want to get for monthly eat out and such. We use a general category for that and miscellaneous expenses.

Once you have it set which will take as much as a couple hours you only have to revisit it for a few seconds for various insurance cost changes and such.

Easy peasy.

Then you can plug in your income streams and get discretionary... still easy peasy.

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Tortuga
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Re: best way to get a handle on expenses?

Post by Tortuga » Wed May 03, 2017 9:47 am

gips:

Our monthly checking account statement provides everything we need. All retirement income (SS, RMD, Miscellaneous) is deposited in the one account and all payments are debited from the same account. We scan each statement for any pass-through amounts such as a portion of the income that is re-invested directly into taxable accounts. Monthly total expenditures are then adjusted down by those investment amounts. We keep yearly and running averages.
If any month shows an expense anomaly we can then dig deeper but generally don't need to. By virtue of our life style our monthly expenses are fairly constant and we don't feel it necessary to slice, dice and analyze by category.
The only major expenditures that are excluded from this analysis are large charitable donations which we handle through a donor-advised fund (DAF) with stock transfers directly from the IRA.

Tortuga

traveltoomuch
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Re: best way to get a handle on expenses?

Post by traveltoomuch » Wed May 03, 2017 10:05 am

Quicken. Set it up to download from all accounts with one click. You'll spend less than one hour per month categorizing downloaded transactions, and drill-down is spectacular. Either lump all cash spending into one category or enter the transactions, as you prefer.

Warning: Quicken has a "sunsetting" planned death - it stops downloading transactions after ~three years.

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JDCarpenter
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Re: best way to get a handle on expenses?

Post by JDCarpenter » Wed May 03, 2017 10:12 am

traveltoomuch wrote:Quicken. Set it up to download from all accounts with one click. You'll spend less than one hour per month categorizing downloaded transactions, and drill-down is spectacular. Either lump all cash spending into one category or enter the transactions, as you prefer.

Warning: Quicken has a "sunsetting" planned death - it stops downloading transactions after ~three years.
And as has been extensively/exhaustively discussed in another thread, it may soon be tripling its price under a subscription model: viewtopic.php?t=210143 (Been using it daily since DOS days and agree that it is easy and comprehensive, but for just tracking expenses I think OP should look elsewhere--functionality is overkill for just tracking expenses.)

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Carson
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Re: best way to get a handle on expenses?

Post by Carson » Wed May 03, 2017 10:14 am

abner kravitz wrote:I pay everything via credit card, and at the end of the month download the transactions to excel. I categorize each expense by pre-determined budget categories. It takes about a half-hour per month.
This is my method as well, except I do it once a week, and it's about 15 minutes. The things I can't pay via credit card I have setup to all withdraw on nearly the same day every month, so I include that bank history in my excel list.
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LarryAllen
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Re: best way to get a handle on expenses?

Post by LarryAllen » Wed May 03, 2017 10:15 am

I download all to Quicken once a month. Takes about one hour a month to download and verify the items are labeled right. We have a ton of transactions. Probably 250 a month. I tried Mint but it wasn't as complete. With Quicken I can easily create all the categories. Then I can look at the cash flow for any date range I want and compare to a year previous if I want. I say an hour a month but probably first couple months a little more time getting your categories how you want them.

GLState
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Re: best way to get a handle on expenses?

Post by GLState » Wed May 03, 2017 10:16 am

If it would take an hour a day to enter expenses, perhaps you are just buying too much stuff? :D

I have quite a few bills that I can't pay by credit card or they charge 2% or 3% to do so....property taxes, utilities, etc so using credit cards to track expenses wouldn't work for me. My credit card info only tells who I bought from, not what I bought. A lawn mower at Walmart looks the same as groceries.

I spend well less than 15 minutes a week entering transactions in Quicken. From these transactions, Quicken gives a complete picture of my finances. How much I spend, how much I owe, current balances on any debt (mortgage, car, etc), all investment balances and performance, budgets, etc. Others prefer MoneyDance or other programs over Quicken, but I've been using Quicken since it was just a DOS checking account program and prefer it over others I've tried. Any program will take a bit of time to set up and learn, but, in my case, it was time well spent.

The old Microsoft Money program is still available from Microsoft for free. It would be worthwhile to try and would work well to track expenses.
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bloom2708
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Re: best way to get a handle on expenses?

Post by bloom2708 » Wed May 03, 2017 10:19 am

Use a debit card or credit card to purchase items.

Sign up for Personal Capital. Link your various accounts. Spend 5 minutes (maybe 10) categorizing your transactions.

Mint is another option. I tried Mint and ended up switching to personalcapital.com about 3 years ago.

We track our full net worth on PC using linked accounts and manual accounts/items for things that can't be linked automatically to download transactions.
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flamesabers
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Re: best way to get a handle on expenses?

Post by flamesabers » Wed May 03, 2017 11:02 am

I also agree with using a credit card to keep track of your expenses. Anything you can't pay with a credit card, get a receipt.

My USAA credit cards automatically assign a category to my transactions as they post. Sometimes the transactions are categorized incorrectly, but fortunately I can set rules to fix this such as having all charges from business xyz be categorized as a healthcare expense or whatever. At the end of the month, I can sort my transactions by category to see what I'm spending my money on. One downside to this approach is if you use a number of credit cards for the same type of transactions.

If you don't mind shopping for credit card rewards, you could also use cards that offer higher cashback for certain categories, such as for gas, groceries, restaurants, etc. Not only will it make it easier to track your expenses, you'll get more in cashback rewards. :happy On the other hand, you'll have to manage paying off multiple cards every month.

MikeG62
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Re: best way to get a handle on expenses?

Post by MikeG62 » Wed May 03, 2017 5:25 pm

livesoft wrote:Use a credit card or two for all expenses. Never use cash for anything. Then rely on the annual summary of expenses from your credit card.

More complicated: Have a few credit cards and use one for one set of expenses, another for other kinds of expenses, and another for ....
This is what I do - the multiple CC method (with minimal usage of actual cash). I then summarize the spend in excel monthly from theCC statements (including comparison to budget spend by category). I don't think this takes more than an hour or two per month. Really easy and keeps me close to the numbers (which I like).
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traveltoomuch
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Re: best way to get a handle on expenses?

Post by traveltoomuch » Fri May 05, 2017 6:37 pm

If you decide you need to track cash spending, I suggest writing it down daily, either on paper or on the computer. Do not try to enter each transaction into your financial software everyday. Entering a month's cash transactions should only take a few minutes.

delamer
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Re: best way to get a handle on expenses?

Post by delamer » Fri May 05, 2017 6:57 pm

Quicken works fine for downloading transactions from our credit cards and our checking. You will need to invest some time upfront to set up the downloads and determine the expense categories that you want to use. Quicken has standard categories and you can add your own. Plus you will need to set up a report to see the results

But after the initial set up, it is very easy -- I probably spend 1/2 hour a week downloading the transactions and then analyzing the results, and I am pretty anal.

If you use cash a lot, this all will take a lot longer. We probably have no more than 2 cash transactions a week.

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Re: best way to get a handle on expenses?

Post by AlohaJoe » Fri May 05, 2017 7:19 pm

You've received a lot of good advice so far. As an alternate viewpoint...

I pay cash for almost everything I buy. (I live in a country where most transactions are by cash and even online shopping offers Cash On Delivery payments. Most businesses will charge you an extra 2-4% if you use a credit card; that is, they pass the cost along.)

I manually enter every transaction I make into YNAB with their mobile app. It does not take me an hour a day. It takes about ten seconds per transaction, which usually happens after I've given them money and am waiting for change.

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