Monday, September 30, 2013

Thoughts after 1 month of YNAB

I've finally reached the 1 month mark of using the personal finance software, You Need A Budget (YNAB). It's the first time that my expenses are measured to the cents, inclusive of all the accounts that I had. In the past, I didn't include the cash in my wallet and neither did I group all the spending I had using my credit card and cash together. For example, if I've spent $100 on food using cash and another $50 on food using credit card, I didn't take into account that I spent $150 on food. It's a simpler inclusion in my spreadsheet to do it, but I just didn't do it. I guess there's no real reason for me to do it.

Well, using YNAB didn't give me a choice.

Hence, I uncovered a few things about my spending:

1. I spend about $540 on food. These includes groceries trip, hawker/food court and also restaurants. Since me and my wife take turns to pay for restaurants, my restaurant bills also includes her share. But I think it averages out, since my wife also help to offset my bills by paying for me. 30% of the food bills come from restaurants trip, another 68% from hawker/food court and the rest are groceries. I think if I need to cut anything, it'll be restaurant bills.

Another interesting thing is that I grossly underestimated my food expenses. As a rule of thumb, I count it as $10 per day ($5 per meal) for 30 days per month, amounting to $300. Then I include another $100 for restaurant bills, chalking about $400. I didn't include groceries at all in the past. So now, the new metric should be $20 for food per day, everything in.

2. I used to be very concerned about spending a lot on gadgets. I mean when I don't spend, I really don't spend. But if I do, it'll be $xxx to $xxxx in one shot. This is something quite different from my wife, as she is used to spending $xx but very reluctantly to do $xxxx. I set up an account called 'play fund' to purchase all these computer gadgets/games/peripheral computer stuff. Busted it this month when I spent a few hundreds for my handphone. At least I don't feel so guilty now, since I already put in a budget for it. That's one of the main reason why I wanted to do a budget - so that I can spend without feeling guilty, otherwise I could save too much. A happy problem, but a problem nevertheless.

3. I have missing cash here and there in my 'wallet' account and occasionally, extra cash. It's not a lot of money. $1 here, 50 cts there, 20 cts there. It's funny because I recorded in every single transaction. The only way that I could lose or gain these small sums of money is because I seldom count in detail the change that I get from others. It's just a quick visual look and I'll put the change aside. Either that, or my wallet has a small hole that I'm unaware of. This unaccountable sums of money that I can get from time to time is classified under 'reconciliation balance', and it happens when my actual amount of money in my wallet is different from the amount of money I should have in my 'wallet' account in the software.

Things are much much cleaner and clearer. I thought it's good enough using spreadsheet but now I probably couldn't go back to using just spreadsheet. The integration between mobile phone and desktop is perfectly suitable for my needs and it saves me a lot of time double checking.

Certainly one of the best things that happened in this aspect of my life. I'm a big fan of anything that improves my productivity.


Kyith said...

i hope you enjoy it. at the end of the day, once you set up, you should realize it is not that hard to go granular.

leese said...

For my cash holding, I don't track every single cent. It is difficult to capture every cash expenses with exact amount. Hence, I re-balance my cash holding from time to time.

I also set aside "fun money", this is the money that I can spend without feeling guilty.

Congrats on your first month!

la papillion said...

Hi Kyith,

What's going granular? haha, I don't understand. But I did enjoy the system that YNAB provides. I'm still tweaking things here and there to fine tune it to suit my needs :)

Hi Leese,

The problem is though I keep every single cent, I still have tracking problems! Haha! I've no idea how it comes about but it happens.

Me too, I also had a fun money. In fact, I already had such a system, but using YNAB makes it easier to track and use the fun money, since it's a budgeting software.

Many more good months to go!

Kyith said...

that means some things you enter into your tracker in finer detail versus last time where u will put "Food"

la papillion said...

Hi Kyith,

I see. Yup, totally agree, once the system is up, it's not that bad. I really like the fact that a lot is automated :)

Kyith said...

i think you have it much easier than me. you have a companion app. i don't

the key as well to a to do list is to capture at the point of origin so it frees the brain resources.

the smartphone is just the best place to do it.

la papillion said...

Hi Kyith,

Just get the software lah, $60 bucks is well worth it, I assure you. I agree with capturing at pt of origin with smartphone. My phone is always with me, so the fact that it's synced with my desktop makes it so much better.

I'll keep a lookout if there's an offer coming. Usually towards end of year there'll be some offer on steam.

AK71 said...

Hi LP,

Wah! This is amazing!

I am still using something called "Agar Agar". -.-"

In recent times, I have been less tight fisted. So, "Agar Agar" is a lot less accurate than it once was. ;p

la papillion said...

Hi AK,

Haha, for those who had little, it's easy to count everything; for those who had many, it's easy not to count ;)

Actually I'm less tight fisted too. The primary purpose of counting getting the software is so that I can spend without guilt haha :)

leese said...

oh ya i didn't pay $60 bucks, I am stingy.

*hint: piratebay, blackmart

la papillion said...

Hi leese,

Haha, I see ;) I had the trial version at first, but thought that this is going to change the way I handle my stuff, so I just bought it at a discount :)