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Budgeting or Expense Tracking: How Much is Enough?

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One day in 1991, a package arrived at my doorstep. Inside were thick paperback user manuals, and a shrink-wrapped bundle of floppy disks. I carefully sliced open the shrink wrap and inserted the first disk into my desktop computer. I then typed the letters “Q-U-I-C-K-E-N” at the command prompt, and recorded my first financial transaction.

budgeting toolsMy path to financial independence had begun.

Most of us in the early retirement/financial independence community view budgeting or expense tracking as a fundamental prerequisite for a healthy financial life. In my first book Retiring Sooner, I wrote that “You can’t possibly retire early and safely, without a deep understanding of your expenses. There is simply too much risk that you’ll run out of money otherwise. ”

I went on to note that “…a prominent financial advisor and leader in retirement research writes that there isn’t even any point in trying to do retirement planning if somebody can’t figure out his or her basic expenses!”

But the opinion isn’t universal. I also noted that “A prominent blogger and author writes that most people won’t even bother to read books that tell them they need to track what they spend, because it makes them feel guilty.”

Which side are you on? Do you track your spending to the penny, or stuff receipts in a shoebox and sort them out once a year, if then? Or are you something in between?

In this post I’ll review budgeting software in general, and discuss my own journey from a dedicated penny-tracker in my early years, to gradually easing up on my financial controls here in later retirement….

Budgeting vs. Tracking

Let’s start with clarifying some terms: The general loathing of “budgeting” probably stems from the use of “budgets” in business and government. These are cheerless documents that prescribe sums of money you are allowed to spend in certain categories before incurring the wrath of your boss, or voters.

Almost nobody wants to live their private life under those kinds of controls. That’s why, though I throw around the common term “budgeting,” what I most often mean, and generally advocate, is simply “tracking expenses.” Yes, in my experience, keeping track of your regular spending and sorting it down into categories on a periodic basis so that you know where your money is going, is vital to financial independence.

Why Track?

As I wrote in Retiring Sooner, “Many spending decisions are emotional – they can reflect our deepest desires and fears. Tracking your money helps to create awareness, which leads you to the essential reasons you spend, and control over your emotions. Once you become aware of your spending, you can begin to make intelligent choices about whether it fits in with your personal ideals, financial priorities, and long term goals – or whether you are letting emotions override your own best interests. Over the long haul, being aware of your spending is one of the most important actions you can take to build wealth and retire comfortably! ”

Finally I described the real point of a budget: “In my opinion, 90% of the value lies in the actual spending data, and only 10% in your stated goals. Awareness is key. My approach is to track spending carefully, understand what it costs you to live each month in all important categories, and keep in mind your goal to live below your means. The rest will happen naturally, without draconian adherence to an artificial “budget.””

How to Track

In my experience, there are two possible approaches to tracking expenses, depending on your level of commitment, and the accuracy desired. In the past I’ve called these Real Time Tracking and One-Time Analysis.

In Real Time Tracking, you, or a computer, are recording every single expenditure, more or less as it happens. Then, on some regular basis, you run a report that sums up all the expenses into categories for your review. Even if you rely on a computer to do the heavy lifting, this does require a continual commitment on your part, both to ensure the data is entered correctly, and to review it regularly.

The alternative is to only look at your expenses occasionally, maybe after you’ve experienced a life change, or you sense that your finances are out of control. You can take a monthly snapshot: Sit down with your receipts and statements and try to reconstruct an approximate monthly budget for yourself. Or you can take an annual view: Start with your salary, then subtract taxes and savings and debt payments, to arrive at an approximate annual expense figure.

I noted in Retiring Sooner:

“Central to any budgeting effort is a list of spending categories. The ideal list and organization will be a personal matter. It doesn’t make sense to track categories that are too small to be meaningful, or too large to be actionable. Aim for categories that constitute at least 1% of your monthly outlay, and no more than about 15%, if possible. ”

For more ideas on systems for budgeting, see the excellent summary at CNN Money.

Now let’s take a quick look at some of the budgeting tools available to automate this process….

Budgeting Tools

I’ve always meant to do a comprehensive review of budgeting tools here at Can I Retire Yet? But, given the time commitment required — my retirement calculator reviews were man-weeks of work — I’m not sure it will ever happen.

Meanwhile, I’ll point you to an excellent effort from The Finance Buff circa 2015.

That article is dated now, but it gets at some of the key issues for the major options. Particularly, the Finance Buff points out the important concept of “source of truth.” This boils down to how much you trust your financial institutions to feed you a legitimate record of transactions for you to verify. As someone who has historically checked every single transaction, I can vouch that our banks are very accurate these days. And the occasional instance of fraud is usually easy to spot, if the bank hasn’t already caught it for you. (But, fraud still happens, just read about the $40K theft from my savings account a few years ago.)

So what follows is a brief list of what I’m aware to be the major options in budgeting software these days. If I’ve missed something that you use or favor, please add it in our comments later:

  • GOODBUDGET — App based on envelope budgeting method. Sync spending to multiple devices and web.
  • mint — Granddaddy of online account aggregation/expense tracking. Bills and money in one place. Alerts, budgets. Free, easy to get started.
  • Moneydance — Online banking and bill payment, account management, budgeting and investment tracking. Reminders. Windows/Mac/Linux desktop, with add-on apps.
  • mvelopes — Envelope budgeting method. Focused on debt elimination. Variety of plans, some include coaching.
  • Personal Capital — A prime competitor to mint for account aggregation. Sophisticated investing analysis features. Goals, retirement planning. Personalized portfolio management/financial planning from an advisor available. A favorite in the financial blogging space.
  • pocketsmith — Calendar and event-based. Account aggregation. Budgets, planning, forecasting.
  • Quicken — Granddaddy of desktop budgeting programs and probably the most powerful personal finance software overall in depth and breadth of features. Cloud features and user interface are not as polished as newer contenders.
  • tiller — Based on your own, customizable spreadsheet. Automatically updates Google Sheets or Excel with your daily transactions and balances. Reviewed here.
  • YNAB — Focused on debt elimination. Teaches a method for managing your money, prioritizing and planning. Forward-looking: “Give every dollar a job.” Account aggregation. Goals. Web, apps.

Though convenient and popular, the cloud services have their drawbacks. Neither Chris nor I like giving out access to our accounts. I refuse to concentrate all my financial credentials in one place. Though the risks of compromise are low, they certainly aren’t nonexistent in today’s world. The thought of a criminal getting access to all my financial accounts at once is horrifying.

Instead, I’ve settled on a desktop solution, Quicken, that maintains most of my financial information locally. At least two other highly competent personal finance bloggers I know, use simple spreadsheets with categories to track all their expenses. Though there is a bit more manual labor involved, a simple solution can work perfectly well.

How Much to Track?

Even with software support, tracking your expenses can still be a lot of work.

The task comes naturally enough to us hyper-organized, technical types. But the rest of the population is about as interested in tracking each of their financial transactions as they would be in alphabetizing their cereal boxes.

So what level of budgeting or tracking is appropriate and manageable for most people? And does that change over time?

How about after financial independence, or later in retirement, when you’re pretty darn sure you have enough money to go the distance? Does it still make sense to methodically count every dollar going out of your household?

I can’t answer those questions for everybody else, but here is my story….

My History

As noted at the start, I began using Quicken in 1991 when it was a bare bones checkbook reconciliation tool, and I stuck with it doggedly over the years as an astounding array of other features were added to the program, most of which I ignored.

Being the careful type, I generally collected receipts and entered them into Quicken over the course of the month, before statements would arrive. I liked to monitor our cash flow in real time, and have this additional check against potential fraud or bank errors.

But, eventually, that manual process became entirely optional. People began downloading their transactions to their computer, or reviewing them over the Internet, bypassing the data entry chore.

But I remained a steadfast fan of manual entry.

In 2009 I stopped upgrading my Quicken program due to the potential for bugs and support issues as the parent company struggled. For a decade I continued to enter transactions, even stock prices, manually into my ancient version of Quicken.

Then, finally this year, in view of our relative financial security and the increasing demands on my retirement time, I said “enough!”

Big Leap: Quicken 2019

I needed to simplify my household budgeting. It was no longer worth hours of monotonous data entry each month to precisely track our finances.

I considered going “cold turkey” with a simple spreadsheet system. But when I thought about the number of ways I relied on Quicken reports, particularly for running this blog business and filing my income taxes, I decided I owed it to myself to evaluate an upgrade to Quicken 2019 first.

I’m glad I did, though the transition process was not without its problems.

The great appeal of a Quicken upgrade was that it should automate the manual drudgery of transaction input and stock price updating for me. But there were potential downsides: There might be new bugs to deal with. According to reports on the web, bank account synchronization seemed unreliable for some institutions. Then there was the issue of unknown support for the program going forward. Intuit had sold off Quicken to a private equity firm, and its future was, and still is, uncertain.

But, in reading reviews, it was clear that Quicken remained the best choice if I wanted to store my financial data offline. It continued to sport the most features of any personal finance app. At PC Magazine it had recently won an Editor’s Choice award. And both PC World and DoughRoller reported favorably on it.

So I took the leap, purchased the upgrade, and imported my data from the creaky 2009 version. Encouragingly, that first step went perfectly. Quicken 2019 brought in my decade-old data without a glitch, and that gave me the confidence to persevere through the learning curve.

After several months now using the new program, I can say it was definitely worth the transition.

Like most of the rest of the world, I now download my credit card transactions each month, which, after some minor confusion over which credentials to use, has been relatively seamless for the two major financial institutions involved. This saves me several hours monthly in manual data entry. Though, I still must semi-automatically categorize my transactions, and I feel like Quicken could do a better job memorizing my preferences in that department. But reconciliation when I get my statements is almost fully automatic now.

The program runs a bit sluggishly on Windows. And there is a compatibility/register refresh issue when using a second monitor that has only a partial workaround. I’m not brimming with confidence that Quicken and its new owners will always be there for me. But for now, it gets the job done well enough.

Out of Control?

I’ll admit, as a control freak about my money, letting the computer automate some of my transaction tracking has been a leap of faith. I no longer have an up-to-date and accurate snapshot of my account balances at any point in time.

Turns out you can live without this, as many people know! But, it’s required some adjustments on my part….

For example, all of our bills are payed from our main checking account via automatic debit. But I no longer have perfect visibility to our credit card balances, so when the statements come each month, the totals are always a bit of a surprise. Rather than do a transfer at the last minute to make sure bills can be paid, I prefer to just maintain a larger balance in that checking account now.

I also see a slightly greater risk of my missing fraudulent transactions on our credit cards. (In our experience, a credit card gets compromised at least every year or two.) It used to be, with my Quicken balances as the “source of truth,” if a transaction showed up in the bank’s records that wasn’t in my computer, it had to be fraud. Now that’s not the case. Since I haven’t already pre-loaded all of our transactions, when I download them every month, I have to be extra vigilant to spot any that aren’t ours. It’s more likely that a small fraudulent charge at a familiar merchant could slip through.

Is the interest lost on our larger checking balance, or the slightly greater risk of fraud, worth the several hours of my time saved each month? Yes, absolutely!

My time is very valuable to me, especially here in later retirement. I’m willing to spend some money to buy myself more free hours every week, especially if it frees me from a task I don’t particularly enjoy anyway!

The Bottom Line

So I have given up a little control over our money to buy myself more time in retirement.

But I still have enough control to monitor our financial security.

Every month I run a simple budget report in Quicken to review our cash flow. So I can see the grand total of our spending every month, even if the details aren’t as accurate as they once were. If we have a spending problem down the road, I can always drill into the line items, or dig out paper receipts if necessary, to see where we could cut back.

But I doubt that will be necessary. I’ve run enough retirement simulations at this point to believe we will be OK under virtually any scenario. And Social Security, Medicare, and more inheritances are yet on the horizon for us.

The bottom line numbers to track, the ones that matter most, in my opinion, are your expenses and your net worth.

I’ve monitored my own net worth as a key indicator since that day in 1991 when I first fired up Quicken. Despite occasional volatility — during the Dot-com bubble and the Great Recession, in particular — it has been a reliable metric: If our net worth is holding steady or going up over time, I can be reasonably confident in our financial security.

It is important, in my view, to keep a rough eye on your spending, and net worth, no matter your level of financial security. But the line-item details are less important as time goes by….

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Comments

  1. I have also used Quicken for many years, mainly because I wanted offline storage of my financial information. I enter all of my transactions manually; otherwise, I’m not sure how one detects errors in statements. The mobile Quicken app allows me to enter transactions while on the go (including pictures of receipts if I want) that can easily be synced to my PC. The “reconcile” features, while either split-screen with an electronic copy of a statement or a paper copy, generally goes smoothly. If I have auto payments, the program lets me set up automatic transactions from those accounts. Finally, I can set up reminders (for example, I have a $0 transaction each year that says “Did the mortgage company pay for the homeowner’s insurance?”). Quicken also does well with stock transactions and quotes.

  2. Wade Shanley says

    I just started using the budget tool in Quicken last year. I turned 50 and started thinking about what it might take to retire in the next 5-10 years. I figured it was a good idea to know roughly how much we spend on broad categories and in total annually. It wasn’t particularly difficult for us because all of our spending is limited to 2 credit cards and an online checking account. The big insight once we started tracking expenses were how many automatic subscriptions we had. I found over $500 a month we were spending on smaller subscriptions …so we went through all of them and cut back by 50%. Some we canceled all together, some we just downgraded a to a lower less expensive tier. But in general this was the biggest insight for us, the sheer amount of subscriptions that have grown in our spending over the years and the monthly impact. It’s so easy to sign up…it’s like death by a thousand cuts!

  3. Since we purchased our first house several decades ago, I have maintained a basic budget that tracks anticipated income and expenses by broad category (food, auto, housing, etc). This was long before the PC, just a pencil and an old fashioned ledger book. Once PC spreadsheet software was developed, I moved to that and in the 90s to Quicken and later to one of the cloud based solutions that imports data from banks, credit cards and brokers. While the charts and graphs are ‘pretty’, I still export data to Excel and work the numbers myself simply because I’ve done it that way for so long and it allows me to quickly identify the variations.

    How often I verify and update those numbers has varied depending on my schedule, our financial situation and the economy. In good times, I tend to look at it quarterly and if anything is +/- 5% I will delve into to it to identify the variation and possibly update my budget as a result. When things were tight, I would focus on this more frequently and look for ways to economize. Having a budget mindset, regardless of our financial situation, has always served us well and allowed me a lot of peace of mind in retirement.

    Before any large purchase – I will always put it in the budget and analyze it’s long term impact and ‘true cost’. A 25k car has a much higher impact than simply decreasing your bank balance by 25k. The cost of that money long term as well as increase in insurance and related expenses all factor into the final decision. One upside to getting older – the length of that long term estimation continually gets shorter 😉

  4. So which is it? Are you “a control freak about your money” who regards expense and cash flow tracking as a “task that comes naturally enough”? Now you’re claiming it’s “a task you don’t particularly enjoy”? I’m not buying that.

    I’ve used Quicken to track spending and accounts for 20 years. (And I tracked on paper before that.) I manually enter receipts on a daily basis, and I let Quicken download account balances and new transactions daily as well. It only takes a few minutes (“a few hours a month?” No way.). I do “particularly enjoy” knowing that my house is in order. I haven’t needed to reconcile a monthly statement in many many years. And that’s not being a “control freak” – it’s using a computer tool to take the drudgery out of a basic daily activity.

    By only checking your balances and transactions only once a month, you’re way too lax in the area of security. Daily download has caught stolen credit card numbers on two occasions, with only a few dollars of fraudulent charges both times.

    • I spot-check my transactions online weekly, should have mentioned that in the article.

      • Ah. that’s different then.

        Are you really describing yourself as “later retirement” now? Aren’t you still several years away from actually leaving the “early retirement” crowd (i.e. under 65)?

  5. One day in 1986, a package arrived at my doorstep. Inside were thick paperback user manuals, and a shrink-wrapped bundle of floppy disks. I carefully sliced open the shrink wrap and inserted the first disk into my MacIntosh computer. I then double-clicked the ”Dollars & Sense” (https://www.barnesandnoble.com/w/using-dollars-and-sense-mark-k-bilbo/1000192852) desktop and subsequently recorded my first financial transaction. I eventually switched to Quicken – I think D&S was acquired by them – and still use it to this day. Using personal financial software was one of the smartest decisions I ever made. Even after a divorce – where I lost a large chunk of my 401K – I becasme a 401K millionaire at age 54.

  6. I don’t use a budget or tracking tools. Never did and am doing fine (saving roughly 50% of earnings). I use a “point-of-sale” method and ask myself with each purchase:

    1) Is my intended purchase truly a need (utility bills always get paid, etc.)?
    2) An I overpaying or is the purchase a good value?

    I’m naturally frugal so don’t get into situations where I buy more house/car than I need, require first-class vacations, etc. I buy what I think gives me good value and don’t overspend relative to earnings based mostly on intuition. I’m not alone. Just look at the blogger ESI Money’s millionaire interview series.

    • Thanks Phillip, those are great questions. I do something similar with each purchase. But tracking gives me the big picture and lets me know how I’m doing. Maybe I should be spending more, on contributions for example. And it gives me a baseline to discuss with my wife. Things can get more complex when a partner/family is involved.

    • I guess I share your trait of being “naturally frugal”, but I’ve always tracked expenses. Starting in college on paper, then switching to Quicken in the year 2000. The years on paper (not even on a spreadsheet) were valuable because I had to evaluate my personal categories of spending. Those categories got transferred over to Quicken when I started tracking there. Everything gets logged and tracked. It’s on total auto-pilot and it takes a few minutes a day. It’s never prevented me from buying anything I truly need.

      I recently dumped out a Quicken report showing my high-level spending over the last 10 years, to show a financial planner. It was interesting to see the categories fluctuate up and down, but the total never budges. The planner praised my “budgeting” skills. I told him there’s no budget – that’s just what my spending is. Then he suggested that I consider spending more, so that I might have more “fun”. Needless to say, I won’t be engaging him further.

    • While it is discussed less often, tracking expenses/budgeting can also be useful in the other direction — FORCING you to spend MORE money. I know it sounds crazy to all you young whippersnappers who aren’t retired yet. But for many frugal people who have saved diligently and been fortunate enough to experience decent market returns, it becomes the reality a decade or two into retirement.

      Once there’s no real question of ever running out of money, the question often start to become “do I use it now, when I can see and get some level of enjoyment from it, or do I let me estate spend it”. (Keep in mind that “use it” doesn’t necessarily mean “buy a new car” it could mean “pay for elementary school education costs for orphans in Cambodia” or “help my niece, whose bread-winner husband suddenly died of an aneurism at age 36, make mortgage payments”.

      I find that tracking expenses — albeit at a fairly granular level — helps remind me to be generous with others…and gives me some guidelines about how much generosity I can afford without risking my retirement.

  7. I was a Quicken fan for quite a while too and also decided to drop it 10 years or so ago partly because I did not appreciate the software sunset policy they followed. But mostly because the program just became so painfully slow. Especially when doing a simple query but also just in launching it, etc.

    So back around 2009 I tried Moneydance and am so glad I did. It imported my Quicken data really well and required only a little cleanup. It has much of the same great functionality as Quicken but with the advantages that the cost is much more reasonable and it is like night and day in speed of operation.

    Queries are absolutely lightning fast in Moneydance… effectively instant really because as you type a keyword in the search window, results show instantly. Plus more comprehensive queries via it’s many report generation functions is likewise instant. No delay at all in showing the results. And I have a full 23 years of transaction history in my database including over 60 accounts in that history.

    And the Moneydance support is amazing. You can still get individual help and they actually respond to suggestions for improvement and have implemented some of my suggestions over the years. You rarely ever see that sort of response with the big software companies.

    • Nice testimonial, thanks Dave. I’ll know where to look next if I ever get totally fed up with Quicken!

    • I switched to Moneydance in 2003 and haven’t looked back. I agree with support being top-notch and the price value is hard to beat. Every once in a few major upgrades, they require a licence upgrade fee. Totally worth it.

      There have been a few app hiccups with downloading account data or stock prices, but the MD team responds promptly.

  8. Like you I’ve been using Quicken since 1991. In fact I was so fanatical in tracking finances that I kept a paper ledger and journal for a couple of years before that (try to imagine the hours it took to reconcile those at the end of the year!). Also like you I’ve shied away from moving this data to the cloud, for the same reasons as you. I haven’t and likely will never use them to download transactions.

    I never really liked Intuit from early on when they prevented me from updating my own payroll tax charts in Quickbooks and wanted to charge me for providing them to me. However, I always found their products to work mostly well and was able to work around the occasional bug, no matter how annoying.

    Quicken has been quite useful in all the ways you stated and every now and then when I need to look-up an old transaction. I track almost everything with the exception of minor expenses which come out of “allowance” expenses for my wife and I which I do track.

    I tried to get my children, now grown with their own families, to use Quicken when they moved out. They did for awhile but only minimally and not for the near everything I track.

  9. Dave Grever says

    Darrow,
    I just read this article about Quicken. I’ve been a Quicken user for years. I’m currently on Quicken 2019 and automate updates for all of my financial accounts and credit cards. There is no reason you can’t synch your Quicken software with your accounts as often as you like. There is no need to wait for the month end statements to reconcile. I update my accounts several times a week and reconcile immediately after the update is completed. I have a complete picture of my finances at any point in time. I am still in the habit of entering my checking account transactions manually but then I run the Quicken update to synch up with the financial institution records. I don’t rely on Quicken to catch fraud. I have alerts set up with all my accounts so that I get a real-time alert on my iPhone of all expenditures.

    • Thanks for the fine points Dave. I’ve been spot-checking my accounts online weekly as usual, but hadn’t thought to use Quicken itself for that process. Good point. Like you, I have alerts set at the banks for large transactions.

  10. I’m still using MS Money(Sunset Edition) for tracking expenses, and monthly and annual reporting. I’ve been using MS Money since 2007. IMHO the best feature about MS Money, is the ability to create a category and sub-categories. You also have the ability to add a memo or note to each transaction, and split the transaction into multiple categories. However, it does require 15 – 30 minutes to manually download and import all the transactions from accounts. I like the fact of having my information stored locally as well.

    Thanks for another great post !

  11. Monica Kennedy MD says

    Good morning! Great article as usual. I am a regular reader of multiple FIRE blogs and really enjoy yours. I wonder what you think about the EveryDollar budget app that Dave Ramsey has developed?

    • The objectives of EveryDollar look great. Not having used it, I can’t speak to the ease of use, reliability, or flexibility. Perhaps other readers will have some experience to share…

  12. Dave Laaker says

    I’ve used Quicken since its infancy. I start my day downloading transactions from my credit cards and bank accounts each day. I always have accurate and up-to-date transactions and balances through the month (pending transaction can take a couple days to show up). Not sure why you are not able to have up-to-date transactions/balances through the month. I track all my stocks as well and can get a current snapshot in the middle of the day. As far as fraudulent credit card transactions I set up an alert (most CC’s have them now) to send me a text for any charge over $1. I know almost real-time if there is a suspicious charge on a CC. Yeah, you get a text every time you charge something but it’s a warm and fuzzy. As far as budgeting I hate Quicken’s budgeting. Nothing tied directly to Quicken. I’ve hated every piece of budgeting software I’ve tried. I like to carry forward a budget miss to the next month because it forces me to address it. Personally I don’t think you can just say oops and start over. I carry forward a surplus too or put it in a savings budget category. So…. I track my budget in EXCEL. Quicken has a really cool feature that will let you export any report data in a CSV file that is easily imported into EXCEL. I just upload the whole CSV file into a separate sheet and use EXCEL VLOOKUP to pull my expenses/income into my budget sheet. I’ve found you need a CSV file that contains your balances as they will stand on the last day of the month and a CSV file for your expenses as they will stand on the last day of the month. I have a pretty good handle on expenses broken down by essential and discretionary and I pay for everything out of a single bank account. I’m getting ready to retire soon and this year I took the final step of moving my pay check deposits to my brokerage/bank account. I then do a transfer 4 times a month from the brokerage/bank account to the bank checking account (monthly expenses/4). If I start to run short and have to go back to the brokerage account I’ll know I have a problem. When I do pull the plug I just have to make sure the portfolio is kicking off enough cash to the brokerage account. Wish I would have started doing this years ago but I’m pretty sure it will be all good. 🙂 Great article but I think you can get the up-to-date information you seek out of Quicken. I could do a refresh right now and tell you where I stand within the last 15 minutes. Good Luck.

  13. Dennis W says

    Thank you for a great article! I used Quicken for many years but wanted to find a simple, online tool for tracking my expenses. I have been using CountAbout (https://countabout.com) for several years and love it. It does not have the bells and whistles like Quicken but it does everything I need. My first step was setting up my budget categories and connecting my bank and credit card accounts for downloading transactions. Now, every few days, I look at the downloaded transactions and categorize them. It has nice reporting and budgeting so I can track my spending. It also has apps for iPhone and Android devices. If you want something simple that stores your information in the cloud, it is worth a look!

  14. Hi Darrow,

    It was really enjoyable to read your post as you have been a Quicken user for as long as me. I too share many of your same observations. (I am definitely a tracker, not a budgeter.) Guess I am still old school, I still manually enter all of my expenses. Primarily, as you noted, so I can be up to the minute on all of my balances and to split expenses into categories the way I like. I’m still using the 2012 version. Now I may consider updating to the current 2019 version – thanks for being the guinea pig for us!

    Hope all is well,
    Mark

    • Thanks Mark, good to hear from you. What a winter!

      As several readers have pointed out, we could stay up to date by downloading transactions in Quicken daily. Though I find that just cumbersome enough that I’m not sure I’d ever do it more often than weekly.

  15. Been using Quicken since about 1990 to enter and track ALL expenses, including all cash transactions (which is minimal). My wife and I do manual entry of receipts and reconcile statements every 6-8 weeks (been doing this since we married in 1991). Quicken has been an invaluable tool for not only budgeting/tracking, but also researching prior purchases on a regular basis. We always thought we’d quit using Quicken upon retirement (last year), but its hard to break the routine. Plus, as I said, it’s been extremely useful in terms of researching expenses/purchases over any years.

  16. I also use Quicken, but quit playing their game when they terminated online transaction downloads (I’m thus still using Quicken 2015, and now manually entering my credit card transactions. I find most of the new features Quicken has added in the past 10 years are not of interest to me, and, over about that same period, it seemed harder and harder for Quicken to keep the online sync with my bank and card accounts working – at the end, more accounts failed to sync than succeeded, so I was manually entering the data anyway. Still, it has been tremendously helpful to build up a multi-year baseline of our spending habits, and let us decide on retiring early based on a fairly detailed retirement planning capability.

  17. Howard M Hohnsen says

    Hello all, longtime Quicken user, detailed tracker and budgeter as well. I have been developing and using a yearly budget in Quicken, which is very useful when reviewing our finances monthly. Each month I run a Current Budget Report for the month and the Year to Date. It’s a great way to zero in on categories that are out of whack, both ways as sometimes items are mis-categorized. I now give my wife the marked up reports I printed out, which my notes, and she can reveiw them at her leisure. I use the Rental Version, for our six properties. It’s great, plus the Investment analyses I can run as well. Like everything, you get out what you put in from an effort perspective. It’s very difficult for me to imagine not knowing where our $ are going, we have worked so hard for our $ through the years! But, as I tell my children, whatever system you choose, just use it consistently so that you catch transactions/issues that are problems as soon as possible. I enjoy reading Chris and your articles, and also the thoughtful responses from readers

  18. I’ve been using the EveryDollar app since it’s inception I believe that it has helped me be more in control my money than any other tool or approach. The ability to tell my money what to do before the month has begun enables me to have more control and to plan out my spending and saving more effectively. The actual task of inputting each purchase/bill into the tool manually (I’m not willing to pay for the automated uploads) also allows me to reflect on our spending and decide whether it was worth it or not and/or whether our spending needs to be reigned in. It also enables my husband and I to have a generous monthly personal allowance so we can spend freely without feeling guilty.

    • I completely agree that every dollar budgeting is most helpful. We use this because it is easy to use, free, and we find it easier to use than quicken for details. Quicken’s lack of updates until 2019 made it useful for the overall financial picture, but not useful for specifics. EveryDollar is just budgeting not big picture financial health like Quicken. We have tracked our financial health for 28 years. I find believe there is no way to plan for the future without knowing where you are at. Also a side note. We have found that budgeting frees us to spend. It isn’t restricting. It is telling your money where to go.

  19. I found Quicken to be too powerful and error prone for simple expense tracking. I use clearcheckbook.com. to manually enter my transactions for savings, checking and credit cards each month. (investment accounts are tracked separately via custodian website and statements) Clearcheckbook is a free, online check register. You can set up a “chart of accounts” for budget or category items and because you identify the accounts, without account numbers, using generic names such “Bank A checking” or “Credit card Z” I feel there is not a security threat. I like that it “remembers” your input so it can “autofill” recurring account, description, and category inputs. It works great too for generating reports, exporting to Excel, searching for transactions, and much more.

  20. I too have been using Quicken since the early 90s and think my close attention to tracking expenses was key to being able to retire last year when I turned 55. Re credit card reconciliations. I created a savings goal in quicken for credit card transactions. Every time I charge something to a credit card I put that amount into my “credit card” savings goal and the balance of the bank account that I pay my bills from shows as correspondingly lower. Then when a credit card Bill is due for payment I withdraw the money from the savings goal and my bank account balance then shows as having the funds available to make the payment. That way I know I always have enough “put aside” to pay the bill in full, and the savings goal balance gives a snapshot of my current total credit card debt. I also use savings goals as a virtual “envelope” system. At the beginning of each month I allocate funds from my bank accounts to savings goals for known regular expenses. For monthly expenses I transfer enough for that month’s payment (sometimes with a bit extra to create a cushion for fluctuating expenses like utility bills). For quarterly and annual expenses like insurance premiums or property taxes I divide the annual amount by 12 and transfer the monthly amount to the savings goal so I know I always have enough put aside to pay the bill. The system takes only a bit of time to maintain but gives me a lot of confidence.

  21. I am about to retire. We were never one’s to track but paid ourselves first and lived off the rest.
    I have tracked with excel for past 18 months while we tried out our retirement budget.

  22. Candace says

    I confess to being addicted to Quicken:) One of the first things I do everyday is “one step update”, accept and categorize. I use the budgeting functions and the lifetime planning. I do double check using different planning software packages so I don’t solely rely on it. But I do like seeing that chart of my lifetime plan in Quicken. It keeps the irrational worries away.

  23. I’ve been using Mvelopes for many years. I have categories with sub-categories. Long ago I figured out all my current and future expenses and now take money out of each paycheck to pay when the bill comes. Divvying out my paycheck only takes a few clicks and I’m done. I do a download 2-3 times a week and then assign to correct envelope which only takes a few minutes. I always know how much money I’ve got for whatever and by saving for the future, I stay on top of my expenses and ahead with having the proper amount saved prior to bill arriving. Plus, it is very easy to adjust budget yearly to expenses changing or pay raises.

  24. My husband and I have been using Quicken since it first was launched. He’s a CPA. I’m a dietitian. I didn’t want to use it in the beginning. But when I stopped working to raise the kids, I handled all the household finances and became a Quicken convert. One thing I do now is reconcile using Quicken’s online option every week. I enter receipts daily manually (I found the bank didn’t categorize them the way we wanted when done electronically). I find weekly reconciliations more tolerable than waiting for the bank statement to arrive because there are too many transactions to check over a 30-day period. Takes me 10 minutes each week – less tedious.

    Also, to limit credit card fraud, I have set my bank settings to notify me via email with any online/phone/mail credit card charges immediately.

  25. After Quicken’s recent attempt to extort me into upgrading or lose my online banking access, I decided to research alternatives. I’m a big fan of open source software and Linux operating systems (I’m a software engineer), and the only thing tying me to Windows was Quicken. After researching and trying several alternatives (some that you have listed) I settled on GnuCash. It is one of a select few that offers statement reconciliation, is based on double-entry accounting, and offers many other features such as rich reporting, online quotes, loan calculator, small business invoicing, etc. It offers online banking too, but it is a bit cumbersome to set up, and doesn’t match transactions well — so, ironically, I have decided not to use it and don’t miss it at all!

  26. Dan Lacey says

    I’ve also been using Quicken since the early 90s. I have used some of the data downloading from my financial institutions, but had problems with the accuracy of my 401k downloads. Quicken also got very slow and buggy. So, I decided to start over with a new Quicken database, simplifying what I entered. (I enter everything manually.)
    I’m unhappy with Quicken’s switch to a lease program. I’m using Quicken ’15, and will continue to use it as long as possible. But I’m also looking for another program (low cost, that I can purchase, not lease) to replace it eventually. Any suggestions? I saw the mention of Moneydance above. Any others?

  27. Dan Border says

    Has anyone tried the latest version of Quicken for Mac? If so, how do you like it?

  28. I’ve been using Mint for the past 4 years and a former Quicken user for many before. I find Mint very simple and if you are after tracking your spend it does that very well. It is online only and requires access to your accounts with no real manual entry, you can edit a classification or split transactions. You can build categories and track to your hearts content or roll it all up into one like Utilities vs electrical and water and put a budget tracker at each level. I like the trending reports and it’s easy to check each category and transaction to catch surprising fees or if the cable internet bill jumped. If you give it access to your billing account and credit cards you see in less than a month how it works and you can always delete the account to remove it. Of course use great and unique passwords. It really isn’t a planning tool as much as a view into the past. You can set goals but I find a spreadsheet easier to use.

  29. I don’t think the statement:

    “I also noted that ‘A prominent blogger and author writes that most people won’t even bother to read books that tell them they need to track what they spend, because it makes them feel guilty.'”

    Is saying something different. Most of the people described aren’t heading toward financial success. They aren’t trying.

    Having said that. I was fanatical Quicken user until one too many horrible upgrades. I decided to try something different……just review all transactions. I don’t even keep track anymore…..I just make sure they’re all legitimate. I receive alerts for every credit card transaction in near realtime so if something goes bad, I know about it quickly.

    So, I’m very much aware of cashflow, as well as savings (and retirement balances, etc), without any fancy analysis and it’s working for me (and wife) I retired in 2016 at age 52 and she in 2017 at age 51. We do have nice pensions, so we don’t have to watch as closely as others might.

    For us however,, we live well within our means without spending too much time managing money.

  30. What? Wait! Do you mean there are people who DON’T alphabetize their cereal boxes?! Seriously, I’m a fan of tracking expenses and have used Excel for as long as I can remember. Ten years before I escaped from the workforce, I tracked every single expense for a full year, then did it again five years out. Beginning the year before I retired, I began tracking every expense again and have continued to do so since then. That’s how I figured out that I’d be able to walk away from employment a full year before I had originally planned. Even though it requires a little time on my part to enter the expenses, it’s worth it to me. The way my spreadsheets are set up I get an instantaneous snapshot as to how much under or over I am in any one of about 40 budget categories. Plus, I appreciate the confidence that having right-to-the-minute information gives me any time a financial decision comes up.

    • Shocking but true, there are disorganized people in the world. Good thing, since I’d be a lonely bachelor otherwise. Your system has paid obvious dividends. Thanks Mary!

  31. Hi Darrow! Excellent post. I saved it until I time to fully devote to it, as I do to most of your posts. I fully understand your need for using Quicken and even the reluctance to upgrade to the most recent version. I am trying to let go of my ‘checkbook’ even though I no longer write checks (or very infrequently). I find myself wondering how my little great-nephew, who is only 20-months-old, will learn to keep track of his money/finances without tools like paper or even computers. His world is something I cannot even envision. ~smile~ Roseanne

  32. One last comment because the flow has pretty much dried up. The commenters seem quite unified in saying that tracking expenses and managing their personal finances (at varying levels of detail) is an enjoyable hobby, a non-negotiable part of their personality. That only makes the attitude of the article even harder to understand. None of the commenters have said “I decided that my time in retirement is far too important to spend the few minutes a day that it takes to fire up Quicken and pull in my investment and credit card transactions”. I just don’t get it.

  33. Peter H. says

    Hi Darrow,
    I use a top-down approach. I can easily obtain from pay stubs my gross receipts / income (including company match to retirement accounts). From this I subtract what I saved (closely track this) and what I paid in taxes. Whatever remains I know that I’ve spent. From this number I subtract short term obligations such as college tuition for the kids. I know this will end soon and prior to retirement. I’ve done this for five years and the spending number has not varied by very much with exception of one time expenses such as a roof replacement. This has provided me with a very good idea of what I will need each year retirement. I just need to add a few things such as added travel, ACA premiums, and things like dental care that will no longer be covered by employer insurance. I’ve taken it just a bit further and itemized household expenses so I know what my insurance, taxes, and utilities cost. Otherwise I have very little idea where the remaining money goes and don’t really care. Given our lifestyle (don’t feel constrained and good amount of travel), I’m just amazed at how little we need to live a happy life. Well that is my two cents on budgeting.

  34. Hello all,
    Seems like Quicken is very popular with many here. My case is that I off and on did budgeting and tracking on ledger paper early on. I never really rolled all my financial savings and investing numbers to these spread sheets, although my wife did for awhile. I have done a yearly net worth summary most years just to see where we were, and sometimes calculated % savings of our incomes and such. That said, we did watch our bills, made informed frugal decisions, and always averaged living below our means. Lately for the last few years, starting before we both retired( at 60), I started to track all our expenses on our Apple computer called Numbers. It does well enough to keep track and with a little work, you can set up your categories and amounts. I use their personal budget template to log my transactions and manually check the entries with bank, financial, and credit card statements. Otherwise I didn’t really integrate all the financial pieces together. This was to make sure we could retire comfortably and really see exactly where the money was going. I’m glad to say I (almost) enjoy typing in all the receipts and bill amounts as it keeps you focused on how the money is moving! Thank you for another meaningful newsletter.