The Right Tool For Managing Your Money

June 8, 2017

Critical to my falling in love with budgeting was getting the right tool. I totally get that a new tool can take a little bit of time and effort to learn but think about a guy pounding nails with the handle of a screwdriver, saying he just doesn’t have time to learn a new tool. He might be able to make progress with his makeshift tool, but, I would guess misses the nail and hits his fingers a lot. A hammer would do the job a heck-of-a-lot better since it was kind of made for hitting nails in that special right way. In the same way, having the right tool to help you budget is really, really…helpful. Profound, I know. Also, I kind of want to pound some nails now.

With no further ado, if you are not already attached to an effective budgeting tool/app, here are the features I love in the app I use (helllloooooo You Need A Budget aka YNAB!) and which would be important to me in another. They are listed in order of importance, starting with most important.


This one is critical. A zero-based budget makes it really easy to see what money you ideally have left over after paying your expenses. If it’s negative you know that you’ve got to change something before you actually start spending money against this budget. An example? Why sure! While working with a client the other night, we took the money he’d received as income and budgeted for a really big financial goal he’d been working toward and achieved (woot!!!), then tackled his monthly expenses. With money toward every necessary category (and even the fun ones), there was still money to be spent.

Without a zero-sum budgeting tool, we would not have been able to so readily see that he still had dollars to play with. That, my friends, is one of the best feelings in the world. But since we could see dollars that were sitting idle without a job/care in the world, we started talking about where to put them or what to put them toward. They ended up going toward a fun future plan that is fast approaching and hadn’t been funded yet, but having “extra” money led to a bigger conversation. In the future what should his extra money go toward? Turns out there is a really big goal he identified as a stretch but possible goal and feels is attainable with hard work and smart money management. Now he has a reason to have extra dollars after all the necessary expenses and knows where to put them to get down to zero, indicating that every dollar has something to do.

This whole exchange made me appreciate anew that money has a way of spending itself if you don’t give it a job in advance. And then when you have a big goal you want to find and have a place for those “extra” dollars to go to work and do something worthwhile. Whistle while you work, little dollars. {Insert Disney-esque whistling}. You can’t employ those dineros if you don’t know in the first place that they’re available, hence the importance of the zero-based feature.

Ability to plan your money and not just track expenses.

My favorite description of a budget is just a plan for your money. Tracking expenses, on the other hand, is more like retrospective damage-control. “Gee, I know what will be fun. Let’s see by how much I overspent last month!” I can think of lots of things to be interested in other than where my money went in the past. One of those things is my FUTURE; I like making a plan with my future money that is in line with my future life! I also like thinking about the wonders of technology and the fact that a picture I took of something in real life can be permanently captured on a phone or computer screen the exact same way. So weird and so cool. I digress…

Flexibility to adjust.

Budgeting is like running a micro-economy and sometimes you just have to shuffle resources a little bit based on unforeseen happenings. Life happens and sometimes you really can’t know or be 100% prepared for every single thing. Like debris in the road that does lots of damage to the underside of your car (hasn’t happened to me but it has to friends:(). The most practical money management apps allow you to move money based on the realities of your life. Even if not as big as thousands of dollars of car work, you might sometimes have TOTALLY valid expenses/reasons for pulling money out of Groceries to cover a deficit in Household or deducting some moolah out of your Christmas category to cover some overspending in General Gifting. This feature of being able to move money has been a game-changer. You set your budget and spend according to it and tracking back to it and when overspending happens, you adjust from another category leaving your checking account balance none the wiser. It doesn’t even KNOW that you overspent and that is so reassuring.

Ability to split transactions.

This is a big one. There’s no way in heck I want my Grocery budget to get the full brunt of a Target purchase which included a $30 gift, $8 of Random & Household and $25 cash. The best apps will allow you to split a transaction neatly. It’s a lot less intimidating than it sounds at first, especially since you don’t have to be exact about how much was Random. $8 is close enough even if the item was $7 and change. As long as the total of the Categories totals the purchase amount, you are good.

Phone app.

This is necessary for entering things on the go and having a reminder with you of your category balances so you can spend accordingly. Certain purchases are super quick to enter, like fuel at the gas station, and it’s these sorts of transactions that I find it easiest to just enter before I drive away or when I’m at the restaurant register. $32.32 is what it cost me to fill up the SUV today. Kind of a fun number, right? I do not do all my budgeting on my phone and don’t find that a shortcoming of YNAB’s software. There are simply things that need to be done on a desktop or laptop size screen. Maybe one day all of it will fit on mobile but for now this is no roadblock.

You gotta like it.

This one is more touchy-feely and less quantitative. Basically, you’re more likely to use the tool if you like it—the way it looks and at least most of how it functions. It shouldn’t be so complicated that you don’t want to use it or have negative associations with how it looks. Does this sound silly? Maybe I’m just picky about my apps but a friend recommended another tool and I checked it out and, while it works for him and may function in a lot of ways similarly to my beloved YNAB, the user interface felt really dated to me. I don’t want to budget in 2003, I want to budget in 2017 for an awesome 2017+ future:)

One parting thought (not shot, since that would not be kind): of all the things to skimp on, a tool that can make it possible to save thousands of dollars a year, or keep it on track, is not the thing to skimp on. It to me is totally worth paying some money for. In my experience, the good apps charge between $50-100/year for their use. There may be some lifetime licenses out there but most of the big ones (including my favorite, YNAB) have an annual fee. Some apps lure you in with “free” but that’s usually because they have a premium version that actually does all the things you want it to do with the danger that you’ll bang your head against the wall on the free version and BLAME BUDGETING. AND QUIT. We don’t want that since heads and budgets are worth keeping.

I will in the near future be conducting reviews (sounds so serious) of a couple other tools, including setting up my current budget in the tools to give me an apples-to-apples* comparison. I’ve got a couple in mind and will report my findings back but would love to hear if there are any tools you already use and like that I should check out!

*I don’t really love fruit and am really picky about fruit quality. And it might sound ridiculous, but even using this commonly-used and almost irreplaceable phrase makes me the teensiest bit squeamish.

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