One of the first things that my parents taught me to do, financially, was track my expenses. I remembering getting my first bank account, and starting to keep track of everything that went in and out of the account. I had a little paper booklet that I wrote down how much the original balance was, what I bought, how much it was, and what the next balance would be. When I went back to the bank to make another deposit or withdrawal, I would get the updated balance, and compare it to my paper copy. If it didn’t match, I had to figure out where that extra money went to, and why there was a difference.
I hated it. I eventually just stopped doing it, because it ended up amounting to pennies, and it was all because of a simple math mistake or a forgotten purchase. I never caught the bank making a mistake, I doubted that they ever would, so I just stopped doing it. Thankfully, technology eventually caught up with me and I was able to enjoy the benefits of things like online banking. While now there was an automated method of keeping track of my finances, however, my online banking software does not keep track of my budget. Enter the invention of online financial tracking applications, like Mint.com. I’ve been using Mint.com for over a year now, and while I’ve had some problems with it, I love to use it. However, there are always advantages and disadvantages of using programs like these.
It’s simple to set up and use. When you’re creating your own method of tracking your finances, you first have to figure out how you’re going to do that. Are you going to use pen and paper, or software, or an excel spreadsheet? What are you going to track? How are you going to input that data, and how often are you going to do it? With an automated app, it tracks everything for you in real time. It has a wealth of information, so no matter what data you feel is important to track, it is all there and available for you – you just need to take a look to see it. There’s an easy user interface for everything as well. Whether you want to set up a budget, track a type of expense, or look over your financial history, there’s a tab or an option ready and waiting for you.
It’s instantaneous. The application will track all of your data for you. It doesn’t do it once a week or once a month, like you might if you were doing it manually. All the information is automatically brought right into your account as soon as it is available. That means that you have a day by day way of checking to ensure that you’re on track and moving in the right direction. I’ve had it where Mint.com actually helped me react very quickly to a fraudulent transaction from an ATM machine. Someone had gotten a hold of our bank account details through a card skimmer (most likely), and they withdrew a bunch of cash. Within a few hours, I had already been made aware of it through Mint, contacted my bank, and started the process of getting my money back, all thanks to the automated system that was already in place.
Automating everything to do with your finances can make you financially lazy. If your bills are paid automatically and your finances are track automatically, then what is there left for you to do? Not a lot, to be honest. So you might stop caring about what you’re spending and where your money is going. Eventually you may look at your Mint data and realize that you’ve blown your budget over the last two months, but by then it is too late. So if you do choose to use this program, ensure that you are also being diligent in checking in on your finances. Set up a weekly or biweekly check for yourself to go through your finances and hit on all the important points.
What are the pros and cons of using financial tracking software for you?