I have a budgeting system that's worked pretty well for a few years and I think it's been improving. It started as one Google spreadsheet with one page born out of desperation, when we kept hitting the bottom of the barrel on our checking account. This sheet just gave me a general idea of how cash flow would look for the month- would I have enough in our checking account or not? Later I took all of the "set in stone" expenses from that sheet, combined them with the typical set in stone stuff on our credit cards, took the difference between that and our monthly income, and that became a monthly budget for everything else. The last two years have been just keeping an eye on what comes out of that last number and otherwise just copying over the columns month to month on everything else.
I was really excited when I heard about You Need a Budget (YNAB), as it seemed to encode into software what I thought was the most distinctive feature of my spreadsheet system- the separate budgets/ accounts, or, as I called them, "pots," for different types of spending. Like, say, allocating $100/ month to home improvement or a vacation fund. When the app went on sale at the end of 2014, I scooped it up and coded as much of my system in it as I could.
So far, it's working, and it isn't. The pots are mostly fine- I like that money rolls over into the next month but it shows how we're performing against what's currently in the pot. Entry is quick and easy and works well on computers and phones. But now I see what really was distinctive about my system. It wasn't the pots, but the handwaving I did over most of the budget. YNAB allows transactions to be automated, but I don't want to think at all about my monthly mortgage payment, other than initially subtracting it from what money I actually have to work with. If I want to get that same sense of cash flow, I need to time up these automated transactions exactly and add in my previous credit card balances. I can't really do my monthly divvy up on the quarterly water bill. I need to add credit card payments in the same place where I put the spending transactions I care about. I've taken to just paying attention to the pots and ignoring the checking account and total values, because they look nasty and I'm not sure I trust them, and event less sure I care about them.
So, for now I think I'm keeping YNAB for entering transactions we track in detail and I'll continue with at least my monthly cash flow model. The whole ordeal has me wondering about the value of a different kind of budgeting app. The value of a budgeting app like YNAB or Mint or Quicken that strives to keep your entire financial picture by either pulling in your accounts or having you enter everything is just that- you give it everything, it should provide a perfectly picture of expenses and cash flow. But the cost is high- entering everything isn't easy, and pouring over a computer's interpretation of your credit card statement is tedious.
I want an app that just lets me hand-wave over the parts of my budget that I'm not concerned about. The mortgage payment will not change all year, nor will city taxes. I can estimate the electric bill for the year and come within $100, so I don't care about that, either. Assume that my salary is constant for the year. Ah, this is where YNAB really gets me- I can't really project anything, because I can't count on a paycheck until I get it. I get the idea that people shouldn't spend cash that isn't there, particularly for those who may have overspent or have an unstable income- key audiences for finance tracking apps. But I'm responsible enough to revise the equation if I lose my job. If I can assume I'm going to be gainfully employed for the year, I can do things like preallocate for big expenditure so I am underspending before then, and see how cash flow is affected when I will take the hit.
My working theory is that there's generally only about 25% of your budget (stuff after fixed bills, taxes, regular savings, etc.) that is really worth tracking for anyone who is not in a desperate situation cash-flow-wise. Tracking 25% should take me 1/4 of the work of tracking 100%, right? So, given an alter ego with 40 extra hours a week, I'd like to make that app. Financial tracking for lazy people who don't urgently need a financial tracking app. Probably not the best idea because it seems like there are already plenty of such apps that are well-geared towards the people who need or want them the most, but maybe it isn't a terrible idea because perhaps there are others like me who want to a bit of control without all the extra work.
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