How could you get more transparency with your finances?

Question

I'm fairly new to this forum. I'm trying to get a better handle on my finances and am especially curious to see where all my money is going. I've got a few questions for this group:

(1) Where do you believe you could use more transparency with your finances? What tools do you use to get this transparency today to see where your money is going?

(2) Where do you think money is being wasted today, and how are you trying to reduce that waste?

Thanks!

Richard Elvin · Answer

YNAB You Need a Budget. Google it. :)

Michael Lucero · Answer

My excel management was very tedious as in manually coding every charge to about 20 categories, which is a waste of time and i only did it to get a detailed idea of where we spend our money, i no longer do that.

If you want an easier, more automatic thing use mint.com which pulls your statements and categorizes for you. Its a great free online budgeting tool.

Michael Lucero · Answer

accidental charges, yes two days ago i found a double charge on my credit card for $112, called in and was out reimbursed. what i do now at month end is just download my credit card transactions to excel and review for any weird things and talk about them with my wife. I also see subscriptions being charged that we may no longer be using and we cancel them such as amazon prime or netflix, its like a reminder when u actually see the charge instead of forgetting about it like the companies want you to do.

Ani Mohan · Answer

Thanks everyone for the responses -- this is super helpful as a way to get started!

One question I have is around what tools you all use to track your spend. YNAB, bank software, and excel spreadsheet tracking seem like good options. But they all sound like a fair amount of work. How do you all feel about that -- are they tedious to use? Are there simpler tools available that provide some of these benefits?

Also, regarding waste, have you all identified fees or accidental payments through this tracking?

Michael Lucero · Answer

A very good exercise is to track where you spend every penny for a few months. I assume a majority of your spend is through a credit card or debit card which you can download the activity to excel and parse thru it. Then u will have the info of where you spend, then identify which type of costs are necessary and which arent and get rid of some. This will take self discipline. Then also ask yourself if any remaining expenses can be lowered through contract negotiations or new service providers. In the past personally used a multitab excel to track all of this that i built myself. Now that i have my things in order i no longer categorize my expenses, its a waste of time, because i know the lifestyle i live will align generally with my budget that i set up over a few years.

Jason G. · Answer

I have my paycheck deposited into two different checking accounts.  One checking account is for all recurring expenses, including set monthly withdrawals into an emergency fund and extra principal payments on my primary home's mortgage.  The other checking account is my own personal spending money that I can piss away on whatever I want.  This way I don't have to worry about accidentally spending money that is needed for regular recurring expenses.  Once a year I go through all the recurring expenses and update if any have increased to make sure the correct amounts are allocated for those items.  There is plenty of "waste" in what I spend money on (going all out on our yearly vacation, dining out, throwing parties, and buying things we don't need, but rather want), but between my salary and my girlfriend's salary, it isn't something we feel guilty about :-)

Alexander Felice · Answer

with modern bank software transparency is pretty easy. Track your spending like a hawk.

PAY YOURSELF FIRST. This was critical when I first got a grip, take that 20% off the top and put it somewhere you can't get to it (Ally savings account @1.15% is what I use)

Money gets wasted the same way time gets wasted, when you don't' have clear goals you are motivated to accomplish. Set some goals, get obsessed with them, track your spending like a fiend and watch it grow.....then spend it all on RE

Debra Grumbach · Answer

I have a budget. I include breakdowns for weekly, monthly, quarterly and annual expenses.Any "fixed" expense gets paid through direct debit through checking account or to a credit card. Any mandatory expense (e.g. gasoline, dry cleaning) also goes on a credit card. Savings is a fixed expense. I do take out cash for groceries. That's the only category that if I have a credit card or "excess cash" on me, I can/will spend more than the budget. All groceries, all eating out are bought with cash. It's a set weekly amount and I withdraw the cash the same day every week.We have a budget for everything - haircuts, clothes, fun, airfare (emergency as we live 2000 miles from family), vacation, vehicle maintenance and inspection and registration even. And a few others. A total of 28 expenses in all.All amounts for each expense, I attach a weekly number to.  So if I estimate $5200/yr car auto maintenance, $100 per week is set aside for that expense. And for larger, variable expenses like this, I keep track to see if I am going over on an annual basis. Everything else is easy to see on my credit card/bank statements. Then every time the paycheck clears, I put the total for all those quarterly and annual expenses, as well as a portion of our monthly savings, into the savings account.