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This is a post by BargainBabe.com writer Yazmin Cruz.
What is the best program or website to organize and track personal finances? And are they safe?
Below I compare three big names in financial organization: MyJibe, Mint, and Quicken. The following programs meet or surpass the encryption levels that banks are required to use, which are considered sufficient to protect your personal financial data. Perhaps one of these options works for you. Disclosure: I am a Mint user.
MyJibe
MyJibe.com is a web-based budgeting system that uses virtual envelopes to separate money for $8/month (try it first with a 10-day free trial). After you deposit your income, fixed expenses like rent and utilities are separated to keep you from spending that money and to allow you to see how much you have for other things. You can add other accounts and import info from your bank, Quicken, and Microsoft Money (which has been discontinued). MyJibe tracks your income, fixed, and flexible expenses, and savings goals.
What is different about MyJibe is that you can (more…)
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At least one reader was shocked by my disclosure that my monthly budget is $1,200. In a comment about whether a $533 mattress purchase should come out of my budget or my savings, Cindy said, “If you easily have $1200 free cash to spend in a month…wow! That’s not being very frugal.”
Let me explain my budgeting system and why I give myself so much leeway.
I have tried many, many budgeting systems, from tracking every penny to estimating monthly costs by category. None of them worked because they all relied on past purchases to predict future ones. What I spend my money on varies widely. One month a plane ticket may eat up a good chunk of my dollars. During another month a wedding or home project may account for much of my spending.
What does not change is my total spending, certain fixed bills, and my income.
I decided to use this information to create a forward-looking budget (the pdf is safe to download). I start with my income, subtract my fixed bills, and am left with a monthly spending amount (my budget).
My fixed bills include basic necessities and any bills that must be paid including my rent, savings contribution, 1-tank of gas, student loan payment, cell phone bill, and regular prescriptions. Everything else comes out of my monthly budget.
- groceries
- second and third tanks of gas
- gifts
- travel
- clothes
- coffee
- movie rentals
- toiletries
- meals out
- drinks with friends
- hair cuts
- yoga classes
- gardening supplies
- car washes
- vacations
- anything else
Still think $1,200 sounds like a lot?
I gave up credit and debit cards this month to try to reduce my monthly budget. Previously, I went on a spending moratorium to learn new habits. My 15-minute budget may or may not work for you. The first month I used it I reduced my credit card bill by $2,000. Give it a try and let me know what you think.
Evil Erin/Flickr
I’ve gotten a lot of questions from readers about my month-long cash-only experiment. Why am I only spending cash in April? What is the goal? Did my “emergency” mattress purchase come from savings or the regular budget? How much money do I have left to spend this month? Answers below.
Q: Is the mission of your cash-only experiment to find out how much money you need to live on per month? How much you want to live on per month? Or some combination thereof? – Concetta
A: Neither. I know how much money I have to spend after bills and savings every month. And most months I’m good at staying within the limit I’ve set for myself.
Q: Is the point just not to use credit? Or is it more about how to use credit smartly? – Concetta
A: Yes and yes! I usually rely on credit heavily because I spend cash quickly, don’t like going to the ATM, and prefer not to carry gobs of money. But studies show people are more reluctant to spend cash over credit. An NPR story from 2008 says psychology is responsible. I was curious if spending only cash would change my habits and reduce my overall spending. In the process, I’m learning how to use credit smartly.
Q: Part of an exercise like this is to be able to defer those expenses until they do fit into the budget. Is the point of this to simply pay cash for everything (no matter if the budget is met) or is it to begin the process of defining wants from needs? – Janet
A: Yes, the point is to pay cash for everything, even major purchases. In my book, defining needs versus wants is unrelated to how you pay for them. Instead, defining needs versus wants is about sitting down with paper, pencil, and a calculator and creating a first budget. Once you have taken into account regular bills, irregular expenses, and fixed expenses, you will know how much money you can actually spend each month on fun stuff like meals out, movie tickets, and clothes.
Q: What happened to the mattress!? – Sarah
Back story: I put off buying a mattress for so long that after three sleep-deprived nights I had to start sleeping on the couch or shell out for a new mattress. I chose the latter, seeing how the couch is covered in dog hair. From browsing mattress sale flyers, I knew I could get one for under $1,000. I researched coils, padding, and natural fibers online and realized only two things mattered. Was the mattress comfortable? If so, did it fit my budget? A good friend highly recommended IKEA and from the website I was confident I could find a mattress within my budget, less than $500.
A: I went to IKEA, found a comfy mattress within budget, and lugged it home with the help of a burly friend. I’m sleeping easy, but debating whether the $533 mattress should come out of my monthly budget or savings? I tossed around the pros and cons for a week, asked readers to weigh in, consulted friends, and decided the mattress will come out of my savings.
Here’s why. I have ample savings to cover a big last-minute purchase like this. Even though I put off the mattress purchase until it became an emergency, for weeks I had been mentally preparing myself for the big purchase.
Q: What I want to know is how you researched this mattress for the features you wanted and price before spending the money. For example, did you consult Consumer Reports? Tell all, BB. – Diane
A: See above.
Q: So how much money do you have left to spend this month? (I submitted this one!)
A: My target spending was $1,200 for April. If that number seems high, hang tight. I’m writing a future post about my budgeting system and why my so-called discretionary spending is higher than other budgeting systems. So far I’ve made three ATM withdrawals totaling $1,200, but the $533 mattress came from savings so I have $667 left to spend this month. Not bad!
