Tracking Finances (And Other Stuff) And Maintaining Perspective

Mr PoP's tile install in progress...

Mr PoP’s tile install in progress…

This weekend, I was using my time waiting in line at the grocery store to check in with our Mint account (as I do to manage our finances in just 15 minutes per month) and laughed out loud when I saw where our grocery budget was. I was standing in the checkout lane picking up a couple of items (not even our main trip for the week) and we were already $100+ over on the grocery budget for the month.

I knew instantly where that $100+ had gone, or at least the vast majority of it. The Publix deli department. Fresh mozzarella balls. Custom olive mixes from the olive bar. Roast beast – both in and out of subs. The dollar amount we use for our grocery budget ($350/mo) was set knowing that there would be *some* deli splurges like these. It does not account for the sheer number that we have had of late. =P

To some hard core budgeters out there this was anything but a laughing matter. So why did I laugh?

Because I Thought Of The Bigger Picture

As I waited in that grocery line looking at our Mint account (with even more of those pricey items from the deli already sitting on the conveyor belt ready to be rung up), Mr PoP was home laying tile.

Laying tile, particularly 6×36″ wood plank tiles, isn’t easy. As Mr PoP has found, it exerts a strain on his back, arms, and concentration (necessary to make sure that the tiles are being laid correctly to minimize lippage and keep the spacing and layout consistent). But by doing it himself, he’s saving us thousands of dollars.

In the very near term, the cost reduction of DIY-ing this install is going to be on the order of $3K-$4K based on the installation (not even removal!) quotes we got that were in the neighborhood of $5.5K – $6K to install ~550 square feet of tile. But considering that the skills he is learning now (and the tools that we bought!) will also be essential when it comes to installing the remaining tile in the rest of the house (another ~550 sqft). In the medium term (over the next year or two when that tile will be installed), that’ll probably save us another $4K+.

So, yeah. When I saw that we were $100+ over on the grocery budget and I was waiting in line with another deli roast beast sub for my loving (tile-installing) husband… I didn’t care. If he had said he wanted Boar’s Head instead of Publix meat, I wouldn’t have blinked at the $1.50 upcharge. (Note to Mr PoP – please don’t take this as an invitation to ask for every single want and desire right now…)

Don’t Lose The “WHY” of Tracking In The “HOW”

Technology has made tracking just about anything you could possibly care about (and a lot of things that you don’t want to care about) ridiculously easy. Download an app. Enable syncing. Rinse. Repeat.

I’m slightly surprised there’s not a wifi-enabled Litter Robot that tracks your cat’s… um… trips to the box. Maybe I should patent that idea.

It makes it so easy, in fact, that you can drown in the data and make yourself worse off for it. (Sidenote – As a data and tracking junkie – both professionally and in my personal life, it does pain me a bit to admit that there’s a thing as too much tracking and too much data.)

It’s Like When You’re Running…

To return once again to my favorite money analogy (where managing your finances is akin to running, a comparison others agree with), the “HOW” of tracking a run is ridiculously easy. Open the app, click start when you start to run, and stop when you finish. Tracking done! It’s the “WHY” you need to keep in mind, and that “WHY” can change – even within a single run!

As running season in Florida starts to approach, I need to regain some of the speed I let drop off during the heat and humidity of the summer if I’m going to meet my racing goals for the year. To that end, I need to start actually *looking* at the data that I’m producing by tracking my runs. My app even lets me do this in real-time. But none of that is useful unless I keep my “WHYs” in mind.

  • At the beginning of a long morning run, I want to find the pace that I’m feeling comfortable at that day. I pay attention to the audio cues I have set to tell me my stats every 5 minutes and mentally set those as a benchmark of the goal that I want to maintain on average through the run.
  • Then in the middle of the run, I often zone out on those audio cues. I focus on other things like the audiobook I’m listening to, or counting crabs on the beach at low tide (I counted 80 before stopping on a particularly crabby weekend recently). It takes my mind off the intensity of the activity and lets me keep going.
  • At the end of the run, (the last 10 minutes or so), I focus on my real-time running data. I kick up my pace to shave off time that I might have let creep in during those middle miles when I was zoned out. It’s easier to hit a certain pace when you’ve got the data to look at immediately, but it’s also much more physically exhausting. Relying on the data to dictate your movement on such an instantaneous basis instead of your body regulating it over a longer distance takes more physical effort, so while using it for 10 minutes at the end is great – I’ll make it much harder on myself if I try to use this method for the entirety of a 90+ minute run.

Financial “WHYs” Can Change, Too

There are a lot of reasons why we track our finances.

  • record keeping
  • planning and modeling future monetary needs
  • check-in to ensure you’re not spending beyond planned limits
  • staying on the same page with a financial partner without having to constantly talk about money

Our big picture financial goal for tracking this year was to (as a couple) spend no more than $50K (not including the kitchen renovation which has a separate budget) without having to feel like we’re monitoring each others’ spending or talking constantly about money. (The kitchen spending would have us talking about money enough as it is…) Along the way, the tracking helps us maintain our records and be another year of data to use for planning and modeling for the future. So far, we’re on track for that big picture goal, even including the ~$6K expense we booked for the year for our new whole-home solar energy system.

Knowing that we’re on track, and our averages are looking good, we don’t need to “shave time” as we’re nearing the final quarter of the “run” that is this PoP fiscal year. Big picture, denying my handsome tile-installer his roast beast at this point would be counter-productive in terms of our yearly goals. So I laughed when I saw the grocery budget overage for the month.

Last Thought – We Don’t Track What We Can’t Control

Not too long ago, a reader emailed me asking how we track all of our payroll deductions in Mint and I had to give him an answer he didn’t want. We don’t. Payroll deductions (taxes, health insurance premiums, 401K deductions…) never appear on our monthly income statements that constitute a summary of most of our financial tracking.

The main reason for this is that we have little to no control over these deductions. So exerting extra effort to track wouldn’t provide us any additional benefit to justify the effort.

  • Taxes: We look at our withholdings and adjust them 1x/year after talking with our tax guy. Some years, we loan the governmentt $1K-$2K on a temporary basis, other years the government loans us the money. It’s not worth it to us to try and nail this to the penny by Dec 31, especially with how variable our income can be.
  • 401K/HSA: We check-in and make sure these are set to max-out at the beginning of the year. We can see the deposits into the brokerage accounts in Mint on every payday (except for our HSA which *still* can’t connect to Mint!), so when they stop (as they did into my 401K recently), it’s the signal that we’ve maxed out for the year.
  • Health Insurance (or Other Insurance) Premiums: We’d probably think about these more if we had control over them, but as it is, each of our employers generally provides a few different options each year and picks up the vast majority of the cost. Once chosen, we’re locked in for the year, so we choose to extend no mental energy thinking about the small cost that we are technically incurring as a payroll deduction in this category.

TL;DR – Tracking is good, but more tracking isn’t always better.

 

What do you (or intentionally not) track in finances and the rest of life? Why? Do you track anything unusual or weird?

29 comments to Tracking Finances (And Other Stuff) And Maintaining Perspective

  • I’ll buy Mr.Pop all the roast beef sub he wants if he can help me with the home improvement “to do” list. :) Our budget tracking is straight forward, we have a dollar amount targeted for our food each month but with three children it can vary and we expect that.
    Brian @DebtDiscipline recently posted..5 Tips to Create a Debt Killing BudgetMy Profile

  • raluca

    “Roast beast” – I hope that one was intentional :).

  • Lucas

    Thanks for sharing your thoughts (and answering my questions about Mint 😉 ). I have been giving this some thought as well and believe you are right that there is no need to track things you can’t change. If I think back about how helpful most of the transaction tracking I have done has been, it has not been very useful outside of the current month.

    I will question you on one thing though – if you are checking your phone and Mint in the checkout line, but not going to make any changes in your behavior, then why are you checking?

    I think that if i had to name the biggest issue with the change in tracking is that i would like to be able to maintain some sort of monthly historical comparison (which maybe i should even reconsider that). Lets say if Mint suddenly started automatically tracking gross income (instead of net after deductions) – it wouldn’t be the end of the world, but it would probably throw off any historical comparison you have. Yes you are right that most of it you have little control over on a monthly basis. But there are year to year or job to job decisions you can make that affect it. Since i am looking at job/career changes i am looking for a way to consistently judge whether a choice is an improvement financially or not (and maybe a feeling of control that is an illusion as well 😉 ).

    So my current plan is to run Mint and manual MS Money tracking in parallel for a month or two. I only really care about Gross Income, Total Expenses, Charitable Giving, Taxes, Living Expenses (which i get from Total expenses minus charitable giving and taxes), Networth, and Net Investments. I can get Gross Income and taxes in 2 minutes by just looking at my paycheck and enter those into my spreadsheet manually, and i think i can get the rest just by looking at Mint directly. So i think it will work out just fine.

    Anyway, thanks again :-)

    • “if you are checking your phone and Mint in the checkout line, but not going to make any changes in your behavior, then why are you checking?”

      Because standing in line is when I check in with mint to make sure transactions are categorized correctly and I generally pass the budget screen on the way to the recent transactions. Better reading than the tabloids. =)

      With a job change on the horizon it definitely does make sure to figure out what the true value of your benefits, et al are. I did that when facing a job offer a couple of years ago, and it provided a really easy negotiating point.

  • I really don’t track expenses that closely since I’m not a spender at heart. The one item I’m fully aware that I spend too much on is getting take-out for lunch. I’ve really cut back hard on that the last two weeks and I’m hoping to see the fruits of my labor on my next credit card statement. My expenses are also very lumpy since I travel a lot to visit friends and family, so one month I’ll have two flights and the next couple months I’ll have zero, but that’s definitely not an expense I’m willing to forego. I know about what my CC bill should be on average, and if it goes above my expectations I dig in and figure out where I went astray.
    Fervent Finance recently posted..Financial Independence Stealth ModeMy Profile

  • I do track my deductions to the penny, mostly because my employers have never made it easy to export the payroll information and I Found it easier to keep it in a spreadsheet. I have one column for “pre-tax deductions” and one for “post-tax deductions” though and don’t worry about the fine-grained details of those too much. My income is only a tiny bit variable (stock vests and a bonus make up for a small portion of my overall compensation), which definitely makes it not so annoying to track.

    I track the fuel consumption on my car! I started out with a spreadsheet and now I use fuelly.com for that since I don’t want to do complicated math on it, just see how it trends over time. Plus, they have an iOS app and you can text them the info for your fill-up too.

    I track my spending to the penny. I find it helpful in the future to have all of this past data. I have data going back to mid-2004 (high school), which is pretty incredible. I could probably “archive” the 2004-2009 data at this point to be honest.

    I used to have a Fitbit, but I found it really annoying to sync. Now with my new iPhone, the built-in app automatically syncs to my Fitbit account, which is awesome! And then I can use either app to log other forms of exercise too I think. I tracked sleep for a while until I found my ideal amount of sleep (7 hours) per night. I don’t track my weight (I don’t think that’s a sane thing to track with how often my mom tells me I’ve gotten fat, which I really haven’t…) or my period, but that’s because I’m on birth control :)

    I used to track my data usage, but I’m not as religious about that anymore since my Ting bill has been so stable. I’m going to switch carriers soon, so tracking my data usage has been useful.
    Leigh recently posted..Reader SurveyMy Profile

    • Ooh, fuelly sounds cool! If I still had a car I would totally do that! I got annoyed with syncing the Fitbit, even though I could do it wirelessly. I just didn’t get enough out of the data to care about wearing it after more than a couple of weeks.

      “with how often my mom tells me I’ve gotten fat” No offense, but your mom sounds really mean. What kind of mom says that to their kid?

      What phone carrier are you switching to?

      • I’m probably going to switch to T-Mobile. I’m testing out their coverage right now with Ting GSM and it seems to be pretty good. They have a $30/month pre-paid plan that gives unlimited text and data and 100 minutes per month. That seems to be my best option from my investigation since I want roaming and no MVNOs have that anymore (Ting was the only one). I’m just waiting until my Ting credits run out 😉
        Leigh recently posted..Reader SurveyMy Profile

        • Does Ting not do roaming anymore? It’s been a while since I’ve been anywhere without Sprint coverage (for us that’s pretty much just the middle of the Everglades) and I hadn’t noticed.

  • I intentionally don’t track things like taxes either. We save up throughout the year to pay our property tax bill, and I put that expense in a category called Paid From Savings, which I don’t include when looking at our income statement. But I am a Quicken-using Luddite. (Like Leigh, I have spending info going back to 2004.) Huge, uncontrollable expenses just add a bunch of noise and no useful information.

    Other than that, I track how many books I read and how often I ride my bike to work. I used to track my weight, but it’s hard to get anything useful out of that.
    Norm recently posted..Search Terms: Your Questions Answered!My Profile

    • See, I think of our property taxes as pretty even throughout the year since our bank forces us to escrow with them. It really evens out the insurance/property taxes that would be very lumpy otherwise.

      So how many books have you read this year?

  • I don’t track much. Specifically, in the stock/flow framework, I don’t track stock much, as in, I don’t pay attention to net worth, I don’t have itemized lists of everything we own in any aspect. I don’t have over time lists of anything, other than things that are automatically collected (and even then, I don’t tend to look at them).

    Maybe it’s the economics training, but I tend to think of everything in terms of flows and margins. We know to buy new X because the old X is running out. We know we’re spending too much if I have to transfer more from savings than usual on the first of the month (my paycheck goes to savings, DH’s to checking). I may need to pay more attention to my hunger if my pants are getting too tight. Everything is in the moment based on triggers and rules. Even our tax situation– we pay estimated taxes as suggested by the IRS form each year.
    nicoleandmaggie recently posted..It’s not you, it’s me: We really are busy!My Profile

  • Great post. We’re super focused on our big wins. Maxing out 401k/IRA, making major purchases on Craigslist, utilizing points for cheap travel. It’s rarely worth it to stress the pennies (even here at POP).

    Love the DIY. I’m still not brave enough for a project of that scope.
    Adam @ AdamChudy.com recently posted..Amazon FBA 101 – What & WhyMy Profile

  • MomofTwoPreciousGirls

    A little off track here (haha, get it?), but you brought up your solar system and I’m wondering if you have any updates on how it’s working out? Both practically and financially? I have always been fascinated by the idea, but have had many other goals to hit before even beginning to research it. I’d be interested to hear your thoughts.
    I keep track of my balances because we budget for the month to the penny based on the prior month’s income. So I just make sure the bills come out properly. The categories we tend to overspend on are cash only. I don’t track it, but where we are constantly over budget when using credit/debit, we are usually under budget using cash. We don’t borrow between envelopes and we carry over any extra and leave it at that.

    • Actually the solar isn’t off track at all! I track our energy in and out now with that. =)
      The quick update is that it’s going really well. It’s been powered on since mid-April and we’ve had 5 full months of electric bills where we actually produced more energy since we earned. September was ridiculously rainy, so I doubt that’ll hold for month six, but we’ve got a healthy balance of kWh in our FPL account to draw against before we would have to start paying for power, so I’m not worried. I’ll probably write a big post on it when we’re a year in since we have such big differences seasonally in both expected solar production and in our average energy usage that it makes more sense for us to evaluate it based on a full year than just annualizing the past 5 months.

  • We track our money because we’d like to, you know, have some.

    In general, I am not very good at tracking things. I’ll try to keep a food journal, but I get bored. I could never remember what side I nursed on last when the kids were breastfeeding, for instance. (Sometimes I would leave my nursing bra unhooked on that side.) Someone even gave me a device called an Itzbeen that was supposed to keep track of when you nursed and on which side, but I never remembered to activate it. Well, they both survived, so I guess I did OK.

    For money, Mr. FP wanted to make his own Google spreadsheet, so we’ve been doing that, but it feels like just a lot of noise–too much data and we still don’t know what to do with it. I’m going to do a free trial of YNAB to see if it would help make sense of things. We also have a Google chart along the lines of the YMOYL “wall chart.”
    Frugal Paragon recently posted..How I Moved 3000 Pounds of Mulch, Saved $300, and Lost Three PoundsMy Profile

    • “I could never remember what side I nursed on last when the kids were breastfeeding, for instance.”

      Ha! I didn’t even know that was a thing you were supposed to do! =P

      I’ve heard really good reviews of YNAB, hopefully it works for you guys.

  • Ironic that I was reading this and enjoying some Boar’s Head hummus. :) A big ticket item I’m tracking this year is our little one’s expenses, from day care to essentials. It’s been interesting to see our variable expenses shift, especially since we still want our savings rate to be at a certain percentage. Would love to see the finished product once Mr. PoP completes the flooring! :)
    anna recently posted..I’m a Mommy!My Profile

    • yay for hummus and glad to hear from you, Anna! How’s the tiny person?

      I applaud you for tracking all the kiddo expenses. J$ at Budgets are Sexy used to have a kid-cost tracker, but I think he gave up on trying to figure out how much they were costing him after a while.

    • Little one expenses are so big! We track in Personal Capital, and the majority of our expenditures are kid expenses. (To be fair, we live at a boarding school and thus have no rent/mortgage/utilities/etc.) Daycare and diapers are the biggest expenses, since we were lucky to receive tons of hand me downs from friends/family.
      Leah recently posted..Time and seasonsMy Profile

  • Focusing on the bigger picture is so important. ESPECIALLY during a remodel. We’ve been going over our food budget (nothing crazy, but definitely over) for pretty much every month since we started our reno. At first it was something we were concerned about, but now, we just look at it as the price we have to pay for not paying a group of professionals to complete everything sooner. Which, honestly, when you look at it that way, we’d be spending WAY more paying to have our kitchen done sooner than the amount we’ve spent over budget on groceries the past few months.

    So yeah, you get those special sandwiches! You’ve earned them 😉
    Mrs. FI recently posted..Focusing on Facts – My Fear of Flooring FailureMy Profile

  • […] To me, a good mashup surprises and tingles the senses in a way that traditional pop (current and oldies), rap, and dance music just don’t. Listening to a new mashup album is energizing and invigorating and an absolute ton of fun–perfect for putting some pep in your step when you’re miles into a long run, but know you still have miles ahead of you. […]

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