For the longest time, since my university days and with the advent of phone apps, I have been tracking my expenses. It was a lot easier when I did not have a credit card or multiple accounts and I just had to be aware that my cash-on-hand is being taken care of. There were also less monthly recurring payments and I did not keep my money in multiple pots for different purposes. And even then, when I attempted to reconcile what I tracked with what I actually have, I had to spend a couple of hours to make sure that it was all aligned.
And then I got married and my wife and I agreed that “our money was our money”. I know different couples do it differently, but this was what we did so that we were completely transparent with each other about the few accounts that we held. It also meant that because I could afford it, I decided to pay off the student debts rather than let it incur unnecessary interest even before we got married (but that’s a story for amother time).
We wanted a robust budget tracking app for all our household expenditure and even monies set aside for investments and savings. It was also important that both of us played a conscious role in tracking and so we wanted something that could sync seamlessly between our devices. So we tried and tested a few lite version apps and finally on one that really suited our needs: HomeBudget by Anishu, Inc.
The app allowed us to track our expenses and automatically allocate them to various buckets according to our planned budget. We were also able to generate reports that compared between current and previous years’ earnings and savings. Recurring payments could also be set up so it makes it a lot easier to track monthly bills.
But of course, an app is still an app and unless you’re willing to allow apps access to to your bank accounts so that the data is updated automatically, there is still a need to set aside some time (about 1-2 hours each month) to reconcile any differences. But apart from expenses paid by cash, almost everything else is recorded in monthly statements these days, so it’s not too difficult to keep everything up-to-date, even if we happened to miss one or two transactions.
I must say that budget tracking has imposed a quantifiable form of discipline in terms of my expenses habit. It means that every month, I will look through every single line of expense and roughly recall what I spent out. The app also lets me see how our spending habits on different categories have changed over time and whether We am indeed keeping within a budget that We started out with. But beyond just financial planning, there are also other benefits too!
- Checking for credit card fraud: on more than one occasion, I have detected fraud almost immediately because I noticed that the balance did not tally with that in my app. And with fraud, the faster you deal with it, the more likely the credit card company is in your side.
- Checking for correct refund amounts: Because of COVID-19, we had to cancel our holiday plans and apply for refunds. It was only from my diligent tracking that I noticed something a missed when the refund amount was significantly lower than what I initially paid for flights and only then realised that I did not seek refund for my wife and daughter in the same refund application
One final point is that it also helps me work towards my financial goal of attaining passive cash flow. I have confidence that the number I have set is right because I have a true value of the total amount that I am ‘spending’ monthly + some buffer. I say ‘spending’ because I have included everything such as money set aside for investments and mortgage payment (I know some who do not see count these towards their expenses).
So yes. If you are thinking of improving your financial sense, I think budget tracking is a great way to start developing some good habits. You can always try the lite version of this app for free and purchase the paid version ($6.98) only if you like it. You have to purchase the app on each phone that it is to be used on though. The MacBook version costs a bomb ($28.98) though and I am not sure if it provides any additional features.
What budget tracking app do you use?
Disclaimer: By the way, not a sponsored post.