A simple way to summarize the personal finance control system is as follows:
- The Envelope system - placing the budgeted amount from a paycheck into actual cash envelopes
- Checkbook register system - tracking expenses and finance activities in a checkbook register categorized into spending plans
- Electronic spending plan system
I decided to do this break down so that when I go into my apps and spreadsheets discuss, you do not get confused wondering what the point of it all is. If per adventure you find yourself puzzled, just cast a quick glance at the summary above to get you on track.
Free sucks sometimes! Unless it is in a controllable format.
I had mentioned some software that I used for budgeting and cash envelope system in my post 'New You, New Habits * Don't Live Another Day Without A Budget!'. Amidst the short list I put out was one great app for cash envelope system and it was totally free. I enjoyed this app for sometime then I felt the need to search for an update of the said app only to discover that I could no longer find it available on google play store! Yes it was specifically only available for androids.
I really loved the design and it was working great for me and then! I searched and search for days with all imaginable variations of the name to no avail. This 'Simple Budget' had gone AWOL. Just like that!
I became worried that should I loose the app installed in my mobile device, that was it! This got me to continue searching even outside the play store and I noticed that the links on sites that had previously reviewed this app and compared it to apps like Good budget and so on, were not longer responsive. This told me that it was possibly discontinued. That was when I began to search for good alternatives. This time I was not interested in hundred per cent free. I decided that even if it was free, it should have a premium version. I am done with completely free. It got me to remember that developers most times do not feel obligated to keep a free app afloat especially for lack of funding. If such free apps are discontinued due to the lack of real obligations, you would be lost. That is if you depended a great deal on it, like I was kinda obsessed with this 'Simple Budget' app.
Good news is that in a bid to search out this missing app, I discovered that so many similar apps had flooded google play store. I almost got myself in a fix trying to decide which to re-adopt. It became totally clear that budgeting and personal finance is the new IT.
Anyhow, I stumbled upon an extremely similar app to the 'Simple Budget' that had gone missing. I was curious enough to email the developers just to know if they were the same developers that put 'Simple Budget' together. They were gracious enough to respond and say they had not developed any app by that name but they were pleased that I had found their app familiar enough to want to use it.
This app is the 'Budget'. Along also came up others like the 'Envelope Budget' and so much more.
Now like I mentioned in my previous post 'New You, New Habits * Don't Live Another Day Without A Budget', I am prone to use at least a couple of apps or systems side by side to help me decide which app would work best for me.
The whole idea is in documenting your financial activities. You could choose specific financial activities to deal with a particular times of the day, week, month or year. So like I do, you could leave the budget or cash envelope app until the end of each day when you can then input all the transactions for that day. For you to do this, there has to be some sort of way to record the expenses you incurred throughout a day otherwise you are bound to let something fall through the cracks which you might have a hard time remembering.
I need to point out here that you do not need to be this elaborate. The idea of budgeting and personal finance is not to scare anyone. You can be as basic as just a simple notebook and your physical envelopes and you are good. I like to experiment sometimes so you can understand why I would go all out. Besides, intentional planners are record keepers and these records could be basic or complex. It all depends on the individual or family. So you do you.
To record your daily expenses, you would need to note down your transactions as you go anyhow. It could be in a little notepad, or if you live in an economy where you get receipts for every cash transactions, you could just put all the receipts together and then key them into your envelope budgeting system at the end of the day. This does not mean that you do not spend from envelopes. Not at all. So if your envelopes have such provisions, you could record your expenses directly on the relevant envelope. Thing is not to leave transactions unrecorded until the next day. You are more likely to forget one or more especially if that day had had a heck lot of transactions.
Well, I chose to use another app whose sole duty was just to input daily expenses as against a little notepad. I find that when I tried jotting things down on the go, I might either forget to jot down at a particular instance or I might find that I am not in a position to write down anything, so I decided to search for an app to just record expenses as they are incurred since your phone is always with you. You know, just to key in the expenses as they are made. I even found one app that made this step super easy. You just need to speak into your phone with the app open and it would record your transactions. Super cool right?
Now, now, too many apps you might say. You do not need to go all this length but it actually is not too much for me. Come to think of it, it is just two steps so far. The envelope app and the spending app. I only need to put together all transactions for the day in the 'Daily Diary' expense app and input them eventually in the 'Envelope Budget' app for instance or the 'Budget' app at the end of each day.
Now wait for it.... there is more, oh yes! One important thing to note here is that for you to have a great personal or family control system, certain steps are needful and the cash envelope system is step one.
I have my excel spreadsheet into which I key in all the earlier transactions every weekend. Yes this step can be done once a week so long as you are faithful with your daily inputs. This way you do not end up with a load of funds to tackle. You can see that you have systematically broken the tasks into stages. This spreadsheet is designed to give several information at the end of a day, week, month, year and so on. It analyses my financial activities so that any information I require about my money, this spreadsheet does a good job of providing for me. At least it meets the lay man's expectations and then some more. I found so many free and great spreadsheet designs online that I told myself there was no hurry to go into designing mine. After a long consideration, I had to force myself to make a decision on what to choose even though I have a tonne of them in my system.
Presently I am working with the free version of the Pear budget (not to worry this is not an app that would get missing, it is a downloadable spreadsheet...lol)
and the premium version is web based and requires that you pay a periodic fee. This is fine with me especially after my nasty experience with 'Simple Budget'. Truth is that the free version can also work out well without using the premium version but this depends on individual needs. The second spreadsheet I am using because of its features is the 'Checkbook Register' (got free from spreadsheet 123) that incorporates my bank balances without linking to my actual bank account. The good thing is that with this spreadsheet, you can easily see your financial standing at a glance. It puts into consideration your cash and bank opening and closing balances for each period.
This is the third step or the second step if you decide that the daily expense recording is not considered as a step.
Following this process actually simplifies the whole process and makes it not tedious at all since each step has a particular period to be dealt with.