Tracking your finances

January 25, 2008 at 9:54 am Leave a comment

I’ve been a user of Quicken for over 15 years now. It has always been a tool that I could count on to help me balance my checkbook, but it hasn’t been a solution that I’ve been particularly happy with, especially since the Mac version that I have (Quicken 2006) doesn’t run natively on Intel Macs. I’ve actually been on a minor quest for something better for a very long time, though perhaps I’ve not been serious about it until just recently.

About a week ago, I bought the MacHeist II bundle. It includes about a dozen applications and two games, including one nice looking tool to handle your finances, Cha-ching. I got the whole bundle for $39 since I had taken part in the MacHeist challenges ahead of time, so even if some of the apps aren’t the best in the world, they were extremely inexpensive.

So, I tried out Cha-ching. It has a very nice looking user interface and a Budget feature that looked really neat. It allows you to set soft spending limits for different categories of spending so you can then go back and see how closely you spent against your goals. It has what I consider a sort of “Mac-ish” feature of being able to attach a photo of something related to an entry. So, if you got a new big-screen TV, you could take a picture of it and store it in your finance app as an icon. It’s an “outside the box” feature, but I imagine it would only be useful if your home was burglarized. Then, perhaps you’d have a picture of your stolen jewelry, right along with information about when and where it was purchased and how much it was.

After starting to use Cha-Ching though, I noticed that one key feature (at least, key to me) is absent. The ability to perform a Reconcile. Yes, that’s right – a personal finance application that doesn’t let your reconcile! I looked around the net a bit, thinking that I had overlooked it, or that perhaps they do it a “Mac-ish” way, but they don’t. You can mark individual transactions as either Upcoming (meaning that date has yet to pass), Pending (not cleared), or Reconciled. But there is no built-in way to check your account entries in Cha-Ching against your monthly account statement. From a bit of reading on the subject, it seems that the developers don’t feel this is a necessary feature. They think that it over-complicates things. I honestly can’t see how they expect their product to be taken seriously as a financial application without this feature. It is not as if the concept is hard to understand, would be difficult to code, or hard to fit into a user interface. I mean, it would be possible for me to go through a process of manually reconciling my account at the end of each month by checking the “Pending” items off as Reconciled one at a time against my statement, but that doesn’t give me the warm comfort of knowing, without a doubt, that my bank’s accounting matches my accounting application, and that I have the amount of money that I think I do. Perhaps the developers are a couple of college students and they have no real background in finance, but this feature is one that should be in any application of this type.

Having said that, I would probably be okay with this potentially hazardous method if I were a bachelor and only had one or two accounts to track. But, just guessing that I have enough money isn’t an option with a family and with the number of accounts that I’m tracking. (You have an ING Direct or EmigrantDirect account for savings, don’t you?? You should!)

In performing my typical surfing, I ran across another new personal finance application that appears to be made by a one-man operation, No Thirst software. It’s called MoneyWell and looks somewhat similar to Cha-ching’s user interface. Big difference #1? It has built-in support for reconciling! The second big difference is that it uses the concepts of buckets to keep track of your spending. You must set your spending plan up before you really use it. This bucket method is similar to the old-fashioned “envelope” method, where people would cash their checks, then split their money up into different envelopes, one for Rent, Groceries, etc. When they ran out of money in a given envelope, that’s it, stop spending on that until next month, or move money from another envelope. Yes, you could just keep moving your money to the appropriate envelope to buy whatever you want, but it does provide a certain definite limit for each category that, if you really are trying to save money, it should serve to curb your spending. Using this method, at the very least, will open your eyes to exactly what you are spending your money on, assuming you do it right.

I watched the MoneyWell tutorial videos and I’m sold enough on the concept that I’m going to give it try. The trial version allows 200 transactions, I believe. I imagine that will be enough to give it a shot for two or three months.

The one glaring feature that is missing from MoneyWell is scheduled transactions, but that is on the developer’s To-Do list. It seems that he has been responsive to end-user requests, so I imagine this will be done pretty quickly.

In my personal situation, we put almost everything we buy on our American Express card, then pay it off each month in full. We do this because it is a CostCo Amex, and we get 1% cash back on everything, plus another 1% back for dining out. In addition to this card, we typically use a VISA when the merchant doesn’t accept Amex. For me to use the MoneyWell system the right way, I must add the Amex card as an account in Moneywell and start tracking each expense that gets charged to the AMEX, assigning each expense to the proper bucket. In fact, I’ve added all of my credit cards to MoneyWell to track this way. It will take more time to manage this, but a few minutes a day should be worth it to keep closer tabs on my spending.

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Entry filed under: General, Mac.

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