I admit that I tend to overcomplicate the whole “budget” thing. It drives my wife crazy. My Excel budget spreadsheet includes all sources of income, utilities, expenses, mortgage, credit card debt, as well as an array of sheets and charts that estimates debt payoff out to the next five years. In all honesty, the spreadsheet is probably one of the most confusing documents I’ve ever created, and attempting to keep it updated is a complete nightmare.
Keeping Track is a Full Time Job
No matter how meticulous you are, keeping a spreadsheet updated with your actual spending patterns and financial situation is just about impossible. Thankfully, I recently discovered a free online money management tool offered by a trustworthy major name in the financial world – Quicken Online. The truth is, I took a close look at the other budgeting sites, and while many of them look promising, I have a very difficult time submitting my login information for my bank accounts and credit cards to just anyone. I’ve used Quicken’s tax software before, so I know they’re a legitimate and trustworthy company.
When you first sign up for your free account, you have an opportunity to add all of your financial accounts. Quicken is one of the few online services that actually has a comprehensive library of banks – it even had access to my small, local credit union.
Once you’ve added all of your accounts (you can even add your Paypal account!) – then you’re ready to start tracking and managing your spending in a more streamlined and automated format. On your accounts screen, with one glance, you can view the balances on all of your accounts – no more need to log into ten different websites just to check balances.
Organize Transactions for a Smarter Budget
The real power behind Quicken’s free budgeting tool is how accurately you can tell the Quicken software exactly what you’re spending your money on. Most of the time, cheques or cash withdrawals are put in a “cash” category because the software doesn’t know exactly what the money was used for. If you go through, on a monthly basis, and just take a few minutes to accurately organize the month’s transactions by category, you’ll find that the following month’s estimated budget and the historic trending charts are all more accurate and helpful.
Organizing your transactions is as easy as just selecting the correct one from a dropdown box. For a month where you have a hundred to two hundred transactions, organizing the categories may take ten to twenty minutes, but the software promises to “learn” from your selections when adding future transactions. So, in effect, doing the work up front will make the system work much more effectively for you moving forward.
The Charts Tell the Truth – You’re Overspending!
Now, I’ve always considered myself to be a very frugal and thrifty person. I never overspend… or so I thought. To my surprise, when Quicken Online put the cold, hard facts right there in front of my face, I was a bit surprised.
Quicken takes your actual spending based on the money flowing out of your bank account (not the estimates floating around in your head), and lays out the numbers right there in black and white (or in this case in green and red). The software automatically creates goals based on your average past spending, and attempts to balance your budget so at least your spending doesn’t exceed your income. These graphs provide an excellent representation of which categories of spending you need to cut back on in order to get your budget back on track.
My favorite parts of this free online application are the pie and bar charts that break down your entire spending by category. You can see what percentage of your income goes to mortgage or rent, groceries, dining out, and everything else. The bottom line shows you what you earned, what you spent, and the difference. If you spent more than you make – you’re alerted that you are “living beyond your means.” Don’t even bother arguing, because by this point Quicken “sees” all of your financial accounts, so you aren’t fooling anyone.
Additional Quicken Online Features
A few additional features of Quicken that makes this online tool really stand out for me are the alerting features and the well designed main overview page. The “alerts” that you can set include both mobile and email settings, and you can set up the software to alert you regarding a number of conditions related to your account.
Some options include upcoming bills that are due (upcoming transactions), status reports regarding your current balances, alerts if your credit card spending is excessive, and a number of other valuable options you can use to keep a closer eye on your spending.
Every time you log back into your account, the dashboard on the main page provides everything you’re looking for at your fingertips. This is most likely where you’ll spend most of your time, as it provides all account balances, a “risk of overdraft or low balance” and a valuable reminder tool that lets you know about upcoming bills that are due (if you’ve enabled that alert).
Quicken Online is a valuable free tool that gives you the power to not only get your spending under control, but it will allow you to pay down your debts in a methodical and affordable way, and it provides you with a constant, accurate view of both your bank accounts and all of your credit card accounts. The fastest path to financial freedom is constant monitoring and management of your finances. Quicken Online automates enough of that process so that sticking to a budget doesn’t have to be a chore.
Do you have any online budgeting tools you like to use? Share your opinion in the comments section below.
If you are stuck knee-deep in debt, I know 3 personal financial blogs that you need to read and might help you out. Moreover, if you prefer a desktop software to an online one and can’t afford Quicken desktop version check out 5 Free Financial Software Alternatives to Quicken.
Image credit: DanÃel Starrason