Finally, how to manage your personal finances?

[Badomb]

Dear finance, investment and FIRE enthusiasts. Maybe a never-ending subject, but still an open question to me: HOW DO YOU MANAGE YOUR PERSONAL FINANCE?

I am talking about your system and tools here.

Let me elaborate on this:
- it is only at the age of 40 (unfortunately) I've started to take care of my finance, from tracking it, to start with
- based on data collected I've started to build trends and signals
- I even employed ChatGPT with my own agents to process data for me, as ChatGPT is great at analyzing unstructured data
- I use XLS as a tool, as I didn't find anything better
- as IT and Software Engineer and a Product Guy I want to believe there is a better place than XLS.

So, what's your system? How do you track it? How often? To which details? Which categories?

Below is a real example of categories that I use.



Then I have columns per month. Actual CF, not planned. Not deviation analyses between PLAN vs. ACTUAL. Not sure I have to go that deep. Or maybe?

I know @Baptiste has developed even his own C++ software to track his expenses. Is this because there are not better tools indeed in the whole world?

I know Microsoft Money is gone. Are there MINT alternatives in the EU or Switzerland? What are they? How do you consolidate your banks?

Cheers. I appreciate your comments on any part of my numerous questions.

 

[Baptiste Wicht]

I know @Baptiste has developed even his own C++ software to track his expenses. Is this because there are not better tools indeed in the whole world?

It's mostly because it was fun Before, I was using Excel/Google Sheets as well. But I did not find any really good alternative. I am not really doing any analysis of the data except for trends and such. And I still enter all transactions manually.

Some people in Switzerland are using YNAB.

 

[OxygeN]

I don't do analysis on my finances (yet?!), but since 10+ years I use Banana Accounting Software (www.banana.ch). It was "ok" priced when I bought it and I never felt the need to upgrade to the most actual version (I think I bought version 7, now version 10 is actual).
Apparently there's also some free plan, which includes a "Cash Manager", but I didn't look into it as I'm not interested.

 

[Baptiste Wicht]

I don't do analysis on my finances (yet?!), but since 10+ years I use Banana Accounting Software (www.banana.ch). It was "ok" priced when I bought it and I never felt the need to upgrade to the most actual version (I think I bought version 7, now version 10 is actual).
Apparently there's also some free plan, which includes a "Cash Manager", but I didn't look into it as I'm not interested.

Interesting! I use it for the blog because it's the cheapest software to do "professional" reporting. But I have never thought of using for my personal budget.

Don't you find it cumbersome to enter data into it?

 

[OxygeN]

Interesting! I use it for the blog because it's the cheapest software to do "professional" reporting. But I have never thought of using for my personal budget.

Well, in fact it is a professional tool - I started using it because I was selling it to my customers some 15 years ago (and we were using it for our little company). I'm just using it to sort of having a view in which "bucket" my money goes (or come from) - nothing more

Don't you find it cumbersome to enter data into it?

It actually doesn't bother me. I tend to enter the data on a day-by-day base, as to not forget anything ;-)

 

[Baptiste Wicht]

Thanks for sharing, @OxygeN !

 

[Badomb]

This is all useful, guys, Banana and YNAB tools. For business I was using Expensify (for reporting) in Switzerland since... 2015 and it worked flawlessly. And free of charge (I never hit the limit).

 

[OxygeN]

Reporting can be done with Banana as well, I think (never used it). Do you think YNAB and Expensify can be compared?
What kind of reporting do you do/use?

 

[WillSnow]

Wow, definitely putting the personal into personal finance with your budgeting detail!

I take a very relaxed approach, simply using Google Sheets at the end of the month.

First, calculated what our income was on a vanilla month (no bonuses or massive deductions etc).

Then, try to take an 'average blend' of all bills and groceries - annual total, divided by 12.

Then, what does that leave us with? How much can we save, vs. how much do we need as a personal allowance per month?

That way, my monthly budgeting workflow at the end of each month is very simple:

Income: my salary + my wife's salary
Bills: Rent, all other bills that month (we pay tax at source, still on B-Permit)
Groceries: All grocery spend is via the Swisscard Amex 1% cashback, so that's easy to see.
Remaining: What does income - bills - grocery leave us with?
Personal Allowance: How much did we say we need a month?
Savings: Does that leave us with a respectable savings amount, or should we reduce our personal allowance this month?

And then depending on our situation, the savings amount goes to the relevant place:

• did we have to use our emergency cash for anything? If so, top that back up
• Do we have Pillar 3a still to contribute? If so, contribute to that.
  • is it worth making voluntary contributions to Pillar 2?
• If none of the above apply, then send to Interactive Brokers "VT" ETF.

So month to month, sure the totals vary as -- for example -- bills one month may be higher than the next -- but more or less we know roughly what to expect, the 'ball park'.

But as I say - personal finance is personal, so it really depends on what you enjoy and what works for you.

I would also add, what problem are you trying to solve?

If I was in a situation where suddenly my personal allowance wasn't enough to cover that month's spend, I would suddenly have to investigate and then take a look - did I buy too much 'stuff', eat out too often, go to the cinema too much? I would have a problem to solve, hence I would adjust my method and actions accordingly.

But generally, we have arrived in a stage in life in which our finances are regular. I'm not a 'consumerist' I would say, we probably could economise on groceries and I could stop buying lunch so often ... but life is okay, c'est la vie, I'm relaxed and happy.

A tip I was given is that budgeting should be 'doable' to you - if you can take the effort to atomise it and works for you, then cool (especially noawadays where apps auto-categorise I guess). But personally I don't have the need.

 

[Michael]

I use Python (in a Jupyter Notebook). Mainly because it was fun to implement and I got annoyed to manually annotate expenses from different accounts to specific categories.
Now I can load in the monthly .csv sheets and everything I have categorized in the months before is automatically categorized.

Only this damn stubborn Yuh account brings me manual work, since they have (to this day) only PDF statements and no .csv. I tried to automate the PDF as well, but since the format change is too much each month, it is not worth it.

In the end I have 'categorized monthly expenses' (in very broad cateogries such as 'Housing', 'Transportation', 'Personal',...) and income and can then visualize this within Jupyter Notebook.

Works well so far, but maybe if I would rewrite it into C++ as @Baptiste I could save a few seconds per month because of C++ higher performance.
Jokes aside, for anyone not willing to craft their own tool, I would also suggest Excel. Does the job, easy to use.

 

[Baptiste Wicht]

maybe if I would rewrite it into C++ as @Baptiste I could save a few seconds per month because of C++ higher performance.

Do it!

(But then, you would spend so much time developing it that any time saved later would be peanuts) But it's definitely fun.

 

[OxygeN]

Now I can load in the monthly .csv sheets and everything I have categorized in the months before is automatically categorized.

Interested in this part: are you saying that your bank is delivering CSVs to import your monthly movements?

 

[Michael]

Most banks and credit card providers do, yes. Yuh will manage at some point as well I guess, but things move slower there.

Just look for it in the app or online banking. There is usually some kind of export function.

 

[OxygeN]

Back on this topic... does anyone have experience with GnuCash? I personally like open-source projects, thus I thought I might give it a try. But... here it comes: what if I migrate everything I have tracked with Banana Software (at least for 2024) into GnuCash and then it doesn't fit my needs? And yes, defining my needs is another task. I'd say I want to be able to track my expenses and my income (what I have been doing for the past 10+ years with Banana Software, just entering line-by-line my expenses and entering also my income once a month). But I'd also like to go a step further and have the software/application show me the rest of my assets, like all my bank accounts, everything I have on IBKR (cash in CHF and USD, how much money I've put in IBKR and adding the dividends when they get paid out) and maybe there's a way to also add my apartment (the part I've paid myself which I actually really own), my 2nd and 3rd pillars...

To me it sounds complicated but maybe only at the beginning. Therefore, as I'm now about to start a new way of looking/treating my finances, I wouldn't want to use a software which after some time wouldn't allow me to cover everything and thus I'd need to migrate again...

TIA for your suggestions!

 

[Michael]

I don't have experience with GnuCash but I wouldn't worry too much about changing the software later. Any software might go down the drain at some point, there is no fully safe 'premade' choice.

The safest bet would be creating your own (more sophisticated) Excel sheets. Not much you can't do in Excel, you learn more when thinking about implementing it, and Excel will still be live in 10+ years (or I would be surprised if it isnt).

 

[OxygeN]

OK, I'll stick with GnuCash and try to learn it. I'm already happy I read and understood the "double-entry accounting"!