Tracking: Manual vs. Automated

In past posts I kind of explained how we budget, from the budget meetings to how we split up our variable and fixed expenses. The one aspect I haven’t touched on much, which I believe is crucial to budgeting, is tracking.

The first step to budgeting is having a plan. Sitting down with Shaina and discussing our plan before each month is our first step. But how do we put that plan into motion? How do we know that our plan is working or that we are staying true to what we had jointly decided? To put it simple, I track everything. There are so many ways to track inflow and outflow of money these days. One simple search on the internet could land you dozens of online or mobile based platforms that claim to be the best money tracking tool available. What are my tools of choice? Good old-fashioned spreadsheets and a simple mobile based check book.

I realize just mentioning the word spreadsheet can cause most people to cringe; however, there is one aspect of spreadsheets that I have found to be the link between budgeting and actually staying within said budget. Most individuals who budget sincerely have great intentions of staying within them. The fact that most budgeting tools today have created a way to automate the tracking process of the user’s spending has created disconnect between the spender and their budgeted goals. Users are quick to think that using an automated app will take care of everything for them and somehow make all their overspending problems go away. Automation, to most, means easier. And there is nothing easy about getting out of debt. I firmly believe in a more hands on approach. I know this isn't the only method and I realize that there are people who have used those automated applications, and have gotten great results. But for us, being on top of our spending means knowing where our money is at every day and staying hands on.

Most automated spending trackers today allow the user to set up notifications of when spending in a particular category has exceeded the original budgeted amount. In my eyes, this is far too late. I don’t want to know when I have over spent. I want to know before that happens. So whether or not you’re checking those automated apps daily, or updating a spreadsheet, you need to be hands on. Using a spreadsheet and a simple mobile checkbook app, I manually enter each and every transaction. When a paycheck comes in I add the transaction to our account, take out all fixed expenses until the next paycheck, and am left with what we have available to spend on the items that we have previously discussed in our budget meetings. As those items occur throughout the month, I simply deduct the transaction. This really helps for certain categories that aren't as easily tracked as those one-time purchases, such as gas for our cars that have multiple purchases throughout the month. Having two cars and two different commutes, causes us to have two different needs as far as the amount of gas we each need. Using the simple checkbook app, I can keep track of our gas spending to ensure we don’t go over. These simple tools help me to always know where we are at, so when Shaina says she needs to fill up, I know how exactly much she can spend on a tank of gas. 

As with any budget or budgeting tool it takes tweaking and adjusting to find something that works for you. I used to be a big user of one of those automated apps. I would link to all of my banking accounts that allowed me to “track” my spending. Too often I would over spend in a particular category, would then be notified, and would roll my eyes at the message. It was too late. I had already spent too much. There may be other products out there now that offer a better notification system today, but, using these simple tools has worked well for us so far.

It is said that budgeting and getting out of debt is 20% about the numbers and 80% about your decision to get out of debt and the lifestyle changes and decisions you will have to make to get there. Tracking the numbers to make sure you know where your money is at is only a fraction of the battle. Being immersed in the process and being so hands on has forced us to change our lifestyle. Manually entering a transaction has more to do with discipline than anything. Discipline is needed to change a lifestyle. Doing things that will force you to stare your challenges straight in the face is the only way you will build up enough passion or motivation to overcome them. If I didn't have to look at our money balances everyday and be reminded of our budgeting goals and the reason behind them, it would be far too easy to ignore them. If you don’t face them daily, you will ignore them. Just as if you automate too much, and you’re not annoyed by the fact that you’re going over budget or you don’t know where you money is going, you simply won’t solve the problem; you will ignore it. This is why I choose to use the tools that I do.

If anyone is curious as to how my spreadsheets look or what mobile app I use, feel free to let me know.

I’m excited to get back to our intense and intentional plan of paying off debt. $25,000 paid off and counting!