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I’ve been asked what seems to me at least a “large number” of times lately about what budgeting software I use. My answer of “Excel” usually leads to follow up questions about programming, or templates, or what have you. When i say “Er…no…none of that…just a spreadsheet.” eyes begin to glaze over.

So…thought maybe I’d run down a few of the different solutions I’ve seen or tried over the years, give out some links, and offer a bit of commentary.

YMMV (Your money may vary) of course.

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Spreadsheets:

I mist have tried a dozen different spreadsheet templates…and never wound up using any of them. I DID, however, use bits and pieces and ideas from several of them.

This blog post over at Christian PF lists 10 different free budget spreadsheets to get you started. Each is linked for download as well.

Of particular interest over there is the “Debt Reduction spreadsheet”. It’s a handy way to give yourself a visual image of your debt snowball. It shows you a plan, a table of outcomes based on various strategies, and even prints a payment schedule.

My favorite, however…and the one from which I generated many of the ideas in my own spreadsheet, is the “Detailed personal budgeting Excel sheet” near the bottom. This is actually a link to MyMoneyBlog’s “Within Your Means” budgeting tool…a fairly complex and detailed budget spreadsheet, but one that can really open your eyes…both to budgeting ideas and spreadsheet usage.

Financial Software :

Outside of spreadsheets, there are dozens of pieces of software running around that can help as well.

I’ll stay away from the “major” players like Quicken and MS Money, and instead comment about a few of the lesser known alternatives.

Quite popular amongst the “geek crowd” is GNU Cash, an open source double-entry accounting system. It’s light, fast, and available for dozens of OSs, including Windows.

One drawback is that GnuCash’s budgeting functionality is somewhat limited. Indeed, if you’re feeling just incredibly geeky and bored, you can read the nearly 10 year long history of budgeting functionality and debate in GnuCash on their wiki.

Ace Money is another popular solution. It has a “Lite” version that is free, but only allows management of one checking account….quite enough for many folks. It does budgets, tracks spending, imports bank data, the works.

Personally, I found its user interface didn’t seem to ‘flow” the way I thought financial software should…I felt I was doing things “out of order” quite often. The software IS pretty functional though, and offers quite a bit of the same functionality that larger, more expensive packages do. Certainly worth a look.

Finally, there’s a couple of fairly inexpensive alternatives with free trials.

There’s PearBudget, which is an online budget making tool. It helps you sort categories out into fixed monthly expenses, variable expenses, “once in a while” expenses, etc, and then prioritize and shuffle them around. It also let syou enter expenditures, tracks your spending, compares actual spending to budgeted plan, and makes suggestions. It even helps you plan your savings.

Personally, I’m not a huge fan of keeping my budget online, but the system itself is quite capable, and at $3 a month (with a 30 day free trial), it’s sure inexpensive.

Finally, there’s YNAB (You Need A Budget). YNAB is about as packed with features and abilities as you can want. It is a full blown “Quicken alternative”. Of course, it costs just about the same as Quicken…go figure.

I mention YNAB here for one very simple reason…the one feature that sets it apart from Quicken is its focus. both do essentially the same things, but YNAB views personal finance from a BUDGETARY standpoint, rather than a TRACKING standpoint. Quicken tracks what you do, and tells you about it. YNAB asks what you’d like to do, and tells you how good (or bad) a job you’re doing at it.

Note the difference here…Quicken is STILL telling you…after the fact…what happened to your money. YNAB is asking you to tell your money where to go.

Certainly, both pieces of software will do a fine job of managing zero based budgets, don’t get me wrong…but for YNAB, it’s a focus and starting point.

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Having said all of this, I should probably end by saying that there’s absolutely nothing wrong with simply writing down a plan on a piece of paper, and sticking to it. Remember….our grandparents (most of whom were far better at money management than we are) managed money this way. Shoot, if they had a register with neat lines and columns, that was pretty fancy.

Having software add, subtract, calculate, chart, and graph things for us is all well and good…and in my case it appeals to my inner geek. None of this matters, however, unless you understand the very basic point of it all…

You are not the government. You actually have to live on what you make.

And judging from the lack of panic amongst the always clueless MSM, you haven’t…

2009’s bank closures were a piffle compared to this year.

Yesderday’s activities by the FDIC brought the 2010 total to 108.

That’s right…108 banks have closed in 2010 alone…and it’s not August yet. Last year…the worst since the S&L crisis of the 90’s…had seen only 69 banks closed by this time.

Significant here is the causes the article mentions..largely defaults on commercial loans/property, the result of businesses closing down ‘in the recession”.

But wait…there’s a problem here. We’re supposed to be in a “slow but susteained recovery”, aren’t we?

Think about that…during a “recovery”, fueled by billions of dollars of non-existant capital “thrown from helicopters” into a flagging economy for the EXPRESS purpose of keeping bankrupt companies afloat, we’ve got companies closing at such a rate that:

1) 10% unemployment is the norm.
2) SO many commercial loans are going unpaid that a RECORD number of banks are closing.
3) Consumer confidence and durable goods orders are DOWN during the second busiest time of the year.

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What’s going to happen somewhere in the next 6 months or so is going to make 2008/2009 look like Disneyland.

http://moneyplansos.wordpress.com/?ectid=bitlyified072320101419

http://lenpenzo.com/blog/id1151-19-things-the-millionaire-next-door-wont-tell-you.html

So here is an article about how hard it is to read credit card agreements.

Apparently, “average” Americans read at a 9th grade reading level (and people wonder why I tell my children average isn’t good enough in this house), and the average CC agreement is writted at a 12th grade reading level. So, you see, CC agreements are “unfair”.

“It is clear from your study that something must be done to make these agreements easier to read,” says Lauren Z. Bowne, staff attorney for Consumers Union, the nonprofit owner of Consumer Reports magazine.

Oh look…there it is. “Something must be done“. The cry of the whiner whenever he doesn’t like reality, and wants it “fixed” to his standard, but is unwilling to take his own action. Something must be done! HE won’t do it, you see, because he hasn’t (and can’t or won’t) thought through what’s actually “wrong”, the ramifications of changing it, or even how one might go about doing so…that’s for “others” to do.

The article goes on to explain why various experts think card agreements are hard to read (more on this in a minute), which cards are “best” or “worst” (I have to admit…I laughed that one of them has an agreement roughly 5 times longer than the US Constitution), avd so on. In fact, at one point, they even take a break to explain why it’s prefectly ok that people with 12th grade educations read at 9th grade levels…perhaps a post for another time.

The real issue here, however, seems to have been covered fairly early in the article:

“Credit card contracts and other such documents are written in dense prose for a reason: So that the customer will NOT be able to understand it,” notes Roy Peter Clark, a national expert on writing and a senior scholar at the Poynter Institute in St. Petersburg, Fla

Uh…duh?

Really? Credit card issuers try to conceal the fact that they wish to play the master to your slavery? REALLY? Someone alert Ted Koppel.

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Of course, mentioned not once in the whole article is the rather obvious way to “solve” this problem…

Don’t use credit cards.

Amazingly enough, when you stop paying through the nose for the privilege of buying things you can’t afford to impress people you don’t like….you stop worrying about the conditions of doing so!

And that, really, is the whole issue here…

Credit is not a “right” or a “need”. It is a CHOICE one makes. If you can’t or don’t want to understand the conditions of your CHOICE, then…don’t choose that option! This isn’t a “something must be done” situation…it’s a “I signed a contract I couldn’t or wouldn’t read, and now I want someone to fix my stupidity situation.

Wah. Get over it. Pay your stupid tax, and stop entering agreements you don’t understand to buy things you can’t afford.

Elusive Debtors Foiled by Their Social Media Sites

So, guess what…folks who you owe money to will use Facebook to find you.

Really? You can’t be serious!

Yes…really. Guess what…you borrowed money…you owe it…they’d like you to pay it. And you’ve put your contact info online in a public place.

So says Todd Gillman of the Dallas Morning News.

Excuse me Mr. Gillman, but…well…DUHHHH.

This, good folks, is pretty much exactly WHY we’re facing $13,000,000,000,000 (scary when you type it out, huh?) of debt, with more coming down the pike. BECAUSE IT’S NOT POPULAR to do the right, responsible thing.

It wasn’t “popular” in this house when we lived on $50 a week grocery budgets in an effort to dig our way out from under $70,000 of debt. We weren’t very “popular” with our children when the gifts under the tree were limited and small. It wasn’t “popular” when my wife and I decided that we’d save another year, and get the pool we really want next summer, instead of borrowing money to get it now.

But guess what…not participating in the recession has been pretty damn “popular” in this house. being able to take a vacation…paid for in cash…every year has been pretty “popular”. Being able to handle emergencies when they arrive has resulted in significantly less stress…which has made my wife and I much more “popular” with each other and our children. Paying all of our bills on time has made us pretty “popular” with service providers as well.

Doing the right thing is frequently NOT easy or “popular”…the results, however, often are.

It is time for ALL of us to realize that the ENTIRE crop of elected officials…at EVERY level, from county dog catcher to US President…have let us down. They have done the “popular” thing and FAILED to prevent an economic crisis, a looking second one, a historic debt, a dwindling GDP…in short, a NATION whose personality can best be equated to that of a resource sucking bum.

THROW
THEM
OUT

We call for the FIRING of every last incumbent in any elected office at every level. We call for MASS LAYOFFS. We call for REDUCTION OF HOURS, PAY, AND WORKFORCE. We call for SHUTDOWNS.

We call, in other words, for PRECISELY the same results THEIR policies, irresponsibility, largesse, and power mad STUPIDITY have visited upon the people with whom they are so “popular”.

You’re right, Mr. Gillman…that’ll probably make us fairly “unpopular” with the worthless sacks of protoplasm we replace.

So be it.

Ok…this one’s not about personal finance, or even the economy…it IS about artificial constraints and limits on free trade however…so it fits. And besides…I LIKE hockey.

So…the Chicago Blackhawks recently won the Stanley Cup, marking them as the best team in hockey this year. Now, as an old St. Louisian I can’t say I’m thrilled about the Hawks winning…well..ANYTHING…but I AM glad to see a very proud franchise with a long and storied history recovering from decades of crappy ownership at the hands of the late Bill Wirtz. It’s “important to hockey” if you will…and, honestly, much though i hate the hawks, i can still respect the organization.

The problem here is this…there’s really not much “franchise” or “history” or “image” left to ANY team. For example, those same Blackhawks just yesterday announced that they’d traded a key part of their Cup winning team, Kris Versteeg, to the Toronto Maple Leafs (arguably the WORST team in hockey last year) as part of a deal that sent considerably more talent to Toronto than Chicago received.

And it’s been happening everywhere. Our “own” Nashville Predators recently sent their team captain away in exchange for a draft pick, and a long standing stalwart on defense in exchange for a guy that’s ALREADY washed out of THEIR VERY OWN SYSTEM.

What’s going on?

Simple…welcome to salary cap and revenue sharing land, folks.

Not too many years ago (recently enough that many of the long contracts signed just beforehand are beginning to expire) the NHL and its players “negotiated” (which is to say, the owners rammed down the players’ throats) this new “Collective Bargaining Agreement” that was SO much better for the game, and all the ’small market teams” and what not. The major part of this agreement was that there would be an artificial and arbitrary cap on what teams could spend on payroll, and the teams that made the most money would, like good little socialist brothers, give money to those poor less fortunate “small market” teams.

Excuse me while I puke…just like I did back then.

Why must Nashville trade away 2 of its best players for little in return, including its Captain? Simple. The ONLY way the team stays profitable is by collecting money from other, more successful teams…it can’t, quite simply, make its own way in the world. For that to work, its budget is SO tight that it must stay below a certain payroll, one that is well below even the league mandated cap!

Chicago, of course, can make FISTFULS of money…they’re successful again, they have a long tradition and rabid fans. But…in their case, they not ONLY have an arbitrary limit (through no fault of their own) on what they’re allowed to spend to hire and keep the best people to work for them, but they have to budget for a few million to send Nashville’s way!

The end result?

NOBODY gets to keep talent they developed, NOBODY gets to hire the best people, train them, and reap the rewards, NOBODY gets to demonstrate or reward loyalty, and NOBODY sticks around long enough to become the “face” of a franchise. In short, the “Nashville Predators” don’t grow any sort of story, or history, or image…they are, from one season to the next, simply the collection of 25 or so guys who happen to have agreed to wear that uniform this year for whatever price the REST of the league says they’re allowed to be paid. Meanwhile, just up the road in the same division, the STANLEY CUP CHAMPIONS will probably have to mail half their cup rings to guys who couldn’t be there for the ring ceremony on opening night, because they play for a different team now.

There’s really no sense in rooting for ANYONE any more, other than the convienience of the closest arena.

Thanks, socialist mentality. You’ve left another corpse in your wake.

So much has been said recently about the possibility of a “double-dip recession”….another recession directly on the heels of the recent one.

Will it happen? Almost certainly, imo. And here’s why.

A recession is, at its simplest, a reduction in spending. Quite simply put, people stop buying things. It’s a fairly vicious self-feeding cycle…Bob stops buying his weekly magazine, which puts a bind on the publisher, who lays off Sam. Sam can’t buy his nightly beer, which puts a bind on the bartender and brewer, who lay off Sally and Joe.

Pretty soon, unemployment tops 10%, and everyone’s hoarding cash afraid they’re going to be next. Consumer spending drops like a rock, confidence plummets, and “somebody must do something!”

In this most recent case, the “something” was to spend TRILLIONS of dollars we don’t have to create “fake” spending. What do we mean by fake? Simple…it was spending that wouldn’t have occured except for all the ‘free money” being handed out.

Of course, we all know, money is NEVER free. Money is a STORE OF VALUE…which means, to exist, value MUST be created. But wait…our money ISN’T MONEY…it’s CURRENCY created on a whim out of thin air.

Oh look….debt.

We incurred trillions of dollars of debt, which now we can ONLy pay off with MORE DEBT…valueless currency. And rest assured…we HAVE to pay it.

This, of course, triggers inflation.

But here’s the kicker…and the reason a second recession is on the horizon…

This time, NOT EVEN INFLATION will pay our debt. Because OVER HALF OF IT is INDEXED. Over half of our debt is in entitlements we have created or expanded during the latest recessions….entitlements that INCREASE WITH INFLATION…that is, they are INDEXED to inflation. Meaning, EVEN if we print enough currency to pay the entire debt, the inflation created by that action will RAISE THE DEBT.

So…guess what…there’s only 2 choices.

1) Go further in debt…making our products worth nearly nothing on the international market…reducing the GNP below even recession levels.

or

2) Increase tax revenue to pay down the debt…which, given the current administration, will almost CERTAINLY be attempted by means of tax hikes. Raise taxes, spending decreases…recession.

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Now, more than ever, is the time to attack every debt you can. The BEST way to survive an extended period of reduced income is to NOT OWE ANYONE ANYTHING. When you are debt free, NO amount of unemployment can result in losing your car or your home, and every penny you make will be YOURS to care for your family.

Do not make the mistake of going into panic mode, and building a large emergency fund. Unless your emergency fund is large enough to pay all your secured debt (in which case, why haven’t you paid it??) then it WILL run out…and then, all your planning and saving will have bought you is a few months time.

Instead, eliminate secured debt. NOBODY can take something away from you that you rightfully OWN.

Attack, attack, attack!

So go figure…the concept of “preparedness” has been wandering through my little brain quite a bit the last few days. I find it…well, I guess “amusing” is the right word..that the typical phrase for such planning is “saving for a rainy day”.

This probably won’t so much be a financial post (other than in sort of a generic fashion), but more of a “philisophical” one I suppose.

Not too long ago, I was accused of never having “lost a job an in economy like this”, or something of that sort. The gist of the comment was that it was “easy to talk when you’ve never been there”. Where this individual got such an idea is beyond me (well, ok, it’s not, but I’m being nice) but that was her take on my advice…I found it easy to tell people they should save, spend wisely, and get out of debt because I’d never faced difficult times.

I probably shouldn’t turn this into a big list of “tough times” I’ve had in my life. We’ve all had tough times, we’ll all likely be faced with dangerous and challenging situations again that invite such times. It’s called life. Life happens.

And that, precisely, is the point. Life does, indeed, happen. It has happened to every one of us before, and it will continue to happen in the future.

So why act so surprised when it does? For that matter, why does the world owe you anything when it does? Further more, why turn up your nose at those who suggest you prepare for such things?

Sometimes we wreck our only automobile the day before we’re due to report 150 miles away for military duty. Sometimes we lose our job when we’re already 2 months behind on rent. Sometimes the thieves break in and steal all of our posessions. Sometimes our dishonest roommate steals the $1000 we had saved for rent and utilities.

Ask me how I know these things happen.

This weekend, we had over 100 gallons of fresh water on hand. We had a 10 day supply of food available. We had multiple means to cook food if power was lost. Had our house been damaged or destroyed, we would have been able to replace it and its contents. If, for some reason, we had lost all communication and been trapped, within 2 hours family and friends would have known we were in danger, and alerted authorites.

Sure…it’s “easy” to say all those things. You know why? Because our family has busted their asses to prepare ourselves. We actually discuss such topics as where we’ll go in certain types of emergencies. How will we survive if this or that happens? Who will know, and how will they know, if we are trapped or injured?

Why COULDN’T we go on that vacation that summer? Because we need the money to pay that debt. Why’d we have to eat peanut butter sandwiches without the jelly? Because the $1000 emergency fund was more important than jelly. Why can’t I spend the night with my friend? Because our emergency plan depends upon having you with us.

None of that’s easy…or fun…or even very popular.

But here’s the thing…and I suppose this is really the whole point of this post.

Watch that video embedded below. That’s a double wide trailer just rafting down an interstate…and being destroyed in seconds.

We sat here…in our living room…watching that live…happening less than 7 miles from us. AND WE HAD A RESPONSE.

We knew, beyond any shadow of a doubt, that we had the BEST possible chance for everything to “be ok”…no matter what.

Folks…THAT kind of peace and serenity makes peanut butter taste pretty damn good.

This planning and preparing stuff is hard. It’s not always very fun. But it’s what people who are responsible for themselves do. It’s WHY, years later, they “have it easy”. This is PRECISELY what Dave means when he talks about living like no one else.