Geek Money!

Budgets reduce clutter

2010-08-10T20:56:00.002-05:00

I've been taking a real interest lately in reading up on decluttering and simplifying my life and came to a rather obvious realization: budgets are a huge aid in simplifying life and keeping it from getting too cluttered with a bunch of junk.

Try this experiment: go to Wal-Mart twice. Once with no idea how much you can spend. Once with a budget meaning you will be limited to a certain amount of money for certain categories. If you are limited to $80 in fun money for the month, you'll be a lot less likely to buy that $15 movie you may or may not watch more than once. You'll rent it instead for $1 from RedBox or $3 from Blockbuster. Or maybe even NetFlix.

Save money & be healthy at vending machines

2009-04-06T22:28:00.003-05:00

If you work in an office similar to most of the offices I've worked at, there is one ever-present vending machine area. Get a little thirsty in the afternoon, put a dollar and some change in a get a nice, cold, carbonated beverage. And you might need a little snack with it too, so get a candy bar. Why not? What's the big deal?

The big deal is this - over time these little choices can erode your health and the amount of money in your wallet. Go ahead, do the math. One candy bar & one drink per working day throughout the month. I bet it adds up to quite a bit.

I've found a simple little way that almost feels like cheating to trick myself into not buying the junk from the coin scarfing monsters. Don't carry change or one dollar bills. Yep, that's it.

I have noticed that if I carry a $20 bill, I am extremely hesitant to get change and break it into smaller bills. If I have a $10 bill, I'm slightly more likely to get change & spend it. If I have a $5 there's a pretty good chance it will be spent within a couple of days. If I have a $1 bill or pocket change, it will be gone the next time I get slightly hungry or thirsty. So if you must carry money, carry a $20 and you'll have to think a little longer about do you really want that snack before you get it. And is it really worth the effort of getting the change?

As a bonus, whenever I do buy pop (soda, whatever you want to call it) I refill the bottle with water. If you don't like tap water, get a Brita filter or something similar. I tend to buy two drinks during the week and when I'm doing drinking them, refill them with water and keep one in the break room fridge. It tastes much better to me when it is cold.

Moneydance and planning future income

2008-02-17T16:23:00.004-05:00

Today I received a question about an earlier post I made about Moneydance.

Good morning

I saw your post about Moneydance

I d like to know if it possible to put future income - design jobs [website, catalogs, magazine] monthly or quarterly and check if they get done or not done and paid?

Also a flow graph with income and expenses for past future monthly or yearly

Thanks

The way I budget future income on Moneydance is by using the transaction reminder option. Go to "Tools" then "Reminders" and add a new transaction reminder. Daily allows repeating every so many days, weekly is every so many weeks on a certain day, monthly is every month on a certain day, and annually is just what it sounds like - once a year. The transaction reminder also allows specifying the amount, what account it is using, and who the payee is.

I put my salary in there with how much I'm expecting to get paid and have it set to go every other Friday. The only small issue with this approach: the cashflow graphs and similar tools in Moneydance only include transactions that have been entered, but do not include reminders. There are two ways around that issue:

1. Use the balance predictor extension. This has the option of projecting how much money you should have in the future based on all the reminders you have.

2. Go ahead and enter the income & expenses you're expecting and put "FUTURE" in the memo field. Just don't forget that these haven't actually happened yet & remove the "FUTURE" word once it does actually happen.

You could also enter "DONE" or "NOT DONE" in the memo or tags on the transaction to indicate whether the freelance job is done yet or not.

The Moneydance report & graphing tools will let you specify what dates (past or future) you want to see.

First bug report

2007-12-31T17:15:00.000-05:00

It seems I have my first bug report when it comes to my budgeting spreadsheet. Anyone not interested in the details can just go grab the latest version from DIYPlanner's financial section. If you want the gory details about spreadsheets behaving badly, read on.

Something that worked 100% fine in Numbers didn't work well at all in other spreadsheets. You could have a table called "Income" with a column called "Planned" and another called "Actual" and have a row with the totals of the columns. The total would look like =sum(Planned) or =sum(Actual). I tried to do this kind of set up in Excel and OpenOffice/NeoOffice and it seemed to work fine, so I copied the one month of budget I did 11 times to make for one year of budgeting worksheets.

It turns out in most spreadsheets, besides numbers, you can only have one batch of cells assigned a name - for the whole spreadsheet. So when I had =sum(Planned_Income) in January, February, March, etc. it was all reading from the Planned_Income cells in one month- January in this case. So I had to go in and assign the "Jan_Planned_Income", "Feb_Planned_Income", etc names to all the named cells and then adjust the formulas to use the new names. What a pain in the neck!

Top 10 I Learned from Becoming Debt-Free

2007-12-19T21:23:00.000-05:00

As promised, here are the top 10 things I learned from hitting my goal of being debt free.

1. Quit going deeper in debt! In other words, the first step to get out of a hole is to stop digging! I know it's common sense, but you wouldn't know it with how some people act. I was that way for a while.

2. Budgets aren't bad. A budget isn't paying your bills and then spending the least money possible. That's no fun, and it's not wonder budgets get a bad reputation if that's what people think they are. A budget, or spending plan if you prefer, is decided how you are going to spend your money before you get it.

3. Things go better if you have someone to talk to. I love spending money on computer stuff. My wife is super-frugal. Together we balance each other out nicely. From what I've heard, this is very common for married couples but you wouldn't know it unless you work TOGETHER to be smart with your money. For those of you who are single, find someone you respect & trust when it comes to finances to talk to.

4. Be out of debt & have an emergency fund before you buy a house. We nearly lost ours when I was laid off because we didn't do this. This is where about half of our credit card debt came from.

5. When buying a house, be sure you have enough money to buy stuff to put in the house. This goes along with item #1.

6. Keeping with the house theme, don't buy more house than you can afford. When we bought our house, the crack-headed rules they have would have let us buy a massively expensive house. If we bought the house they said we could afford, we would have had enough money to pay the house payment, electricity, and enough gas to get to work and back.

7. Things go much better when you have a goal to shoot for.

8. The goal has to have a time limit. Getting debt free went so much faster once we had a set time to hit the goal: Christmas 2007.

9. The goal must be believable. I'm sure we didn't do as well as we could for a while because it just seemed like such a huge deal.

10. It is good to have rewards for hitting goals, just make sure they are in proportion to your achievement and keep you going in the right direction. For example, if your goal is to lose weight, don't celebrate by pigging out at an all-you-can eat buffet. Going out for sushi may a good way to enjoy that - you'd be continuing your habit of eating healthy. Just don't eat too much of it!

When we started trying to get out of debt, I had a goal of paying off our credit cards and write down "buy a new laptop" for the reward. That would have delayed paying off the student loans at least a month!

We made it! Debt-free by Christmas 2007!

2007-12-16T22:03:00.000-05:00

What a wild ride it has been. At the beginning of this year, my wife and I set a goal of being debt free by Christmas. I did a spreadsheet showing how the finances would work and she created a wonderful motivation poster using colored markers and stickers, including one that looked like our cat.

We sent in our last payment to the student loan on Friday, December 8th and received the notice that said PAID IN FULL on Tuesday, December 11th. We paid off $21,888 in about 27 months!

I'm going to start with a look back on our journey, follow up with a post of the top 10 things I've learned, and then share some of the interesting reactions my accomplishments have received.

Our journey to be debt-free started on September 1, 2005. My wife and I had enrolled in the Financial Peace University class taught by Dave Ramsey. He had a no-nonsense very simple way of talking about money. He shared a way of creating a budget that made sense, some steps to dig out of debt, and how couples can and should work together to agree on what to do with their money. Exactly one year previous I had been laid off from my job, and we were still feeling the impact of that, even though I was working again.

The best part of the class was the accountability. Someone was there to give you a friendly thump and then some support when you screwed up and celebrate with you when things were going well.

Things were a bit bumpy - trying to stick with the budget despite medical issues and totaling the car when we hit a deer. We hit a major pothole on the road to being debt-free on August 31, 2006. I was laid off AGAIN. This time we had a budget, were used to spending less than we make. We had a plan. During the layoff in 2004, our credit card bills had doubled and hit a grand total of over $12,000. The 2006 layoff, using what Dave teaches - we didn't even have to dip into savings except to fix the car. And my in-laws paid for that for us for Christmas.

In December 2006, I found a much better paying job. As I started messing with January's budget with the new income, I came to an exciting realization: if we really watched our pennies, we could be debt-free by Christmas the following year, 2007!

I told my wonderful wife this, and we both exclaiming "I know exactly what to do!" About half hour later, we were both in the kitchen. She was hanging this great poster on the fridge, and I had a spreadsheet of how it could happen on the kitchen table.

Things looked good until sometime in June. The new job wasn't working out. I ended up leaving their on July 17th. I figured that was going to blow the whole plan. But we left the poster up and just figured we wouldn't be paying any more than the minimum payments in July. We cried, we prayed, we hung in there. God blessed with two job offers in August. Both even more than the previous job. One of them ended up offering more than I imagined I could ever make any time this decade. I took it.

After redoing the budgets with the new income, another realization. It would still be a tight squeeze, but we could still hit the debt-free by Christmas goal!

The closer we got to being debt, free, the more exciting it got. In November and December, we were throwing over half my income every month on the debt snowball - paying down the credit cards and then the student loan.

So here we are - debt free two weeks earlier than our goal, paying CASH for Christmas, and we don't owe a cent to anyone except the mortgage company. I'm already seeing my stress level go down and the balances in my bank accounts go up.

Merry Christmas everyone!

Expect the top 10 things I learned from this early this coming week and the reactions this news is getting by Friday.

spending and goals

2007-10-14T18:49:00.000-05:00

Recently I noticed an odd line of thinking I find myself in. It seems that no matter what kind of goal I am striving to reach, I have this assumption that there must be some kind of reward for reaching it. If the reward isn't something that is already settled on, I decide to reward myself.

In some cases, this is fine. There is one case where this backfires a bit. My current big financial goal is getting out of debt. I have one credit card and some student loan debt left to pay off. While deciding with my wife how much to pay off and by when, I said I'd like to have a reward of buying something nice once the credit card bill is gone. She commented that being rid of credit cards once and for all should be reward enough and besides, any money we would spend on a reward should just go to paying off the student loans. We'll get to our bigger goal that much faster.

It hit me then: for the longest time, I've been thinking and saying that every time we hit some financial goal we should go spend money on something. This makes about as much sense as going out to eat at a buffet every time I hit a milestone goal in losing weight. Sometimes just accomplishing something good should be its own reward.

Zero-Based budget spreadsheet

2007-09-03T20:23:00.000-05:00

I've decided to go ahead and share the Zero-Based Budget spreadsheet that I've been using to set up my budget every month. This spreadsheet will work with NeoOffice, OpenOffice, and anything that can read/write Microsoft Excel files.

I actually prefer to call it a Cashflow Plan. "Budget" sounds like you have to pay your bills, pay down your debt, and then you've got $5 to last you the month. Cashflow plan (and Zero-based budget) means you figure out how much money you have coming in and you decide how you are going to use each and every dollar.

So far, I haven't found any personal finance program that does a good job at budgeting. MoneyDance does a great job at everything else. So I create my budget for the month with this spreadsheet and then put the final numbers into MoneyDance so I can track how my spending stacks up against the budget.

Terrific news (belated update)

2007-09-01T19:13:00.000-05:00

Things got crazy busy and just plain crazy in a good way. After a couple weeks of not a whole lot of luck with the job hunting, I heard back from the first place I applied this time around. They scheduled me for an interview. I ended up having another interview that same Monday. By 4:30 PM Monday night, I had a job offer, but I was also waiting to hear back from the other interview. The next day, I get a call with the other job offer. I ended up having two companies more or less fighting over me.

In the end, I ended up on a contract-to-hire position at a little company called Chase. I'm in with a group that handles the systems that stores images of checks for later viewing, so I'm not in a place that I have to worry that my job is putting people deeper in debt.

The best news is the pay: because of losing my job twice in the last year, I've ended up with a salary that is over DOUBLE what it was a year a go!!

My first paycheck was yesterday. I had started saving up some cash when I realized my previous job was looking not nearly as secure as I thought it would be. After this check, paying the bills, and setting aside enough to live on for the month, I had enough to absolutely destroy what was left of my smallest credit card balance. There is now $1,718.24 and one credit card less between my family and being completely debt-free!!! The debt-snowball is rolling and rolling fast!

The bizarre thing about this: I thought for sure when I lost my last job in July, there was no way we'd be able to make the goal we wrote down at the beginning of the year:

DEBT FREE BY CHRISTMAS 2007!!!

emergency crash mode budget

2007-07-23T21:33:00.000-05:00

Here we go again... I am once more in the land of the job hunters. It is a bit different this time. I saw it coming and saved up some cash. This would be the first time I've had more than a 5 second warning that employment problems were coming.

My current routine for the day: in the morning I apply for at least two jobs, clean a bit, eat lunch and then exercise. In the afternoon, I do some reading and work on some ideas that could earn some extra cash. Right now it is more working on coming up with ideas than actually doing them.

There's a neighborhood garage sale coming up in mid-August. We'll see how much junk we can sell.

I'm planning on using Dave Ramsey's Irregular Income Planning form available here to budget until I get another steady job. I'll have a spreadsheet version of that form up at the beginning of August, if not sooner.

the best use of money

2007-05-23T20:46:00.000-05:00

Over the weekend, my wife and I took a trip from our hometown of Columbus, Ohio up to Michigan to visit a friend of ours. We were planning on staying a night at a hotel, but someone else that was supposed to be visiting and staying the night at our friends' house never showed up. So we ended up staying the night at this friend's house for free instead of plunking down the cash for a hotel room.

We found out that this friend of ours needed some major financial help to get by until June 1. We decided to give our friend a few bucks. It felt really, really good. Instead of giving a hotel $50 or more, we got to spend more time with our friend and got to give some cash to help out.

I challenge anyone who is a Christian to start giving 10% to your church, and anyone who isn't to give 10% to your favorite charity and see what happens.

I heard that J. C. Penny (the founder of the company) gave away 90% of his income and lived on 10%. I also heard of a couple other people doing that, but I can't remember who. I just hope I'll be in a situation to do that some day.

tickerfactory.com

2007-05-10T21:39:00.000-05:00

On a site that discusses finances, I saw some people using a site called TickerFactory.com I'm going to try it out to track my debt as I pay it down.

Quick date entry in Moneydance 2007

2007-02-25T00:07:00.000-05:00

I stumbled across a cool little feature in Moneydance 2007 recently. It may be in early versions, but this is the first version I've seen it.

When entering transactions when you enter the date I'd been typing the whole date or using the arrow keys to edit the date. I found out if you enter the month and date such as 2/25 it will auto-fill the year. If you just put the date, it will fill in the current month and year. So if you just type 25 right now (February 25, 2007) you'll get 2/25/2007.

Moneydance 2007 keyboard shortcut tip

2007-01-28T22:33:00.000-05:00

When I switched back to Moneydance after using other personal finances software for almost a month, I had a few transactions to enter and then had to balance my accounts. One of them had quite a few transactions to mark as cleared. It seemed like it would take a while. I accidentally found a shortcut that makes it pretty fast.

Click on the account you want to reconcile and hit "Actions" and then "Reconcile"
Enter the ending balance and hit "OK".
You'll have a list of all the deposits and withdrawals for that account that have not been marked as cleared yet. Find the earliest transaction that has cleared and click on the field that indicates if it has cleared yet.
Once that transaction has been marked as cleared, hit the down arrow on your keyboard.
This should select the next transaction in the list and mark it as cleared too.
Repeat hitting the down arrow until all the cleared transactions have been marked as cleared.

I wonder how many other little shortcuts like this are in Moneydance that I don't know about?

Moneydance 2007

2007-01-28T22:24:00.000-05:00

So - my all-time favorite personal finance program - Moneydance has received a new update here at the beginning of the new year. I'll try not to drag this out too long and just do a brief summary of what is new and improved.

Icon - the new icon is slick. The old one was a green circle with the letter "M" in it. The new one is a wallet with money and debit cards.
Expense graph on home page - Moneydance has always had a very nice "Home page" a view of all your major financial info at a glance. You can chose what is shown on your home page in the preferences. This version of MD includes an expense graph. It shows where the biggest chunks of your money is going in a color-coding graph based on categories. I know I spent $205.88 this month on groceries without digging into any reports. You can pick if you want to see expenses or incomes and what time period you want to see.
Better budgeting: you can copy budgets and use an old budget as the basis for a new one - which is how I've been budgeting with spreadsheets since I started budgeting.
Status graph: a little element on the top of the home page that can either show your expenses and income in a condensed graph or your net worth in a condensed graph. You can chose which budget to view and what time period to view.

I think it is going to be a long time before I change personal finance applications, especially if the Moneydance developers keep the free updates coming! And even if they aren't free, they are normally $15 and the full version is only $30.

The only thing that may get me to switch would be if Cha-Ching is updated to have all the features I use in Moneydance. That may take a while.

money management technologies

2007-01-28T21:54:00.000-05:00

I've used quite a wide variety of money management software and technology. I started out with just my checkbook which worked out great when all I did was pay my phone bill once a month, textbooks once a semester, and ordered the occasional pizza. It didn't take long after getting out into the "real world" that I quickly realized something slightly more advanced would be needed. For a while I used a spreadsheet created in OpenOffice but once you get above two pages or so of transactions, that becomes fairly cumbersome.

I'll save any of you who are Mac users with a simple amount of finances to track some reading: if you have one checking account, one savings account, and one credit card or a similarly simple setup, check out Cashbox - it is free and open source and will most likely do what you want it to.

Soon after, I discovered personal finance software. gnucash worked great for quite a while once I got it installed. If you use Linux or MacOS/X and want a full-featured financial application for free, give Gnucash a try. It may be overkill for some people. Also, a word of warning: don't try to install it without some kind of package manager such as apt-get on Linux or fink on OS/X. You'll spend hours trying to install all the required pieces of software it depends on manually. On OS/X, you'll need to install X11 first.

Gnucash worked out great until I upgraded my Linux install and it dropped gtk1 support in favor of gtk2, and I couldn't get it working again. And that is when I found Moneydance - my current preferred personal finance app, which I'll cover in detail later.

I used Moneydance until I bought a Mac, which came with Quicken 2002 for the Mac. I upgraded to Quicken 2005 for Mac thanks to a mail-in rebate that came with TurboTax. At one point, I started noticing some stability issues with Quicken and decided to go back to Moneydance.

Moneydance is written in Java, so it works (in theory) on any computer that supports Java. They officially support Windows, Mac, and Linux. I used it happily for over a year and then had a thought: I'm using the envelope system for budgeting after going through Dave Ramsey's Financial Peace University class, why not use the envelope system for EVERYTHING? Enter the program known simply as Budget.

I purchased a copy of Budget because I was not happy with the way Moneydance did budgeting. It was $29.95 and came with free upgrades for life. They have a very active and helpful community and developers who actively answer questions on their forums. I just found myself not keeping track of my money as well as I had with Moneydance. There was just enough additional complexity that to me, it started feeling like more of a chore to keep track of my money. When you're used to a checkbook, the jump to using envelopes for everything was just too much of a mental jump. Maybe if I used it for a couple months more, I'd like it better, but I've got better things to do with my time.

I ended up purchasing Cha-Ching - a very promising looking program still in beta. They also boast an active forum with users supported each other and developers jumping in to answer questions too. Unfortunately, the budgeting part of Cha-Ching is currently completely unusable, making Moneydance or Budget seem like better options once again.

Just to put a weird spin on things, not two weeks after I bought Budget AND Cha-Ching, Moneydance 2007 becomes available as a free upgrade to anyone who purchased Moneydance after January 2004. So after I spend $45 for Budget and Cha-Ching and then a few hours messing with the two of them - here's the software I already use and really like is updated and the updates include enhanced budgeting functionality. If I had just waited a couple weeks, I would've saved time and money.

To keep this post from getting too long, I'm going to split off the descriptions of what is new in Moneydance 2007 into a different post.

yet another blog

2007-01-28T20:32:00.000-05:00

There's millions of blogs out there already, why do we need another one? I have a Xanga page, but it is purely for personal stuff. If there's something I want more than two of my friends to know, I post there and email them a link. Or even call them if it is something truly important.

I've been trying out multiple programs for managing my finances in OS/X and I'm very picky about how it is handled. After trying multiple programs, I have some opinions I'd like to share somewhere besides my Xanga page.