Monday, July 27, 2009

What Quicken Gets Right - QuickFill Transactions

Quicken for the Mac sucks, but I'd be lying if I didn't say that there are some things that it does get right. Looking at the things that Quicken does right is helpful, in that it can be the basis for evaluating Quicken alternatives.

The first thing Quicken gets right that comes to my mind is QuickFill transactions. Next to doing the math for you, QuickFill transactions was one of the first features of Quicken, and it can significantly reduce the drudgery of entering transactions. Reducing this drudgery was key to my early adoption of Quicken in the 90's -- entering transactions was easy enough to do that I wanted to do it. It's very nice being able to type in "saf", and having it fill in "Safeway", with the category of "Groceries" already filled in. Just tab over, enter the amount, and I'm done. Very handy.

There are a couple of improvements that Quicken could do to QuickFill transactions. When I first started using Quicken, it asked me if I wanted to automatically add transactions to my QuickFill list, and I said yes. While that's great for starting out, what it does is it winds up adding every single transaction to your QuickFill list. If you're not careful, you could soon wind up with a QuickFill list that has hundreds of transactions. Worse, since QuickFill searches alphabetically, it's very easy to wind up with some random transaction that winds up coming up first instead of your desired transaction. (I had that problem with "Safeway" when Quicken had memorized "Safest Way Driving School"). Perhaps changing the threshold for adding items to the QuickFill list -- maybe three entries in a month -- would be better.

The other improvement that Quicken could do to QuickFill transactions is document what it means for a QuickFill transaction to be locked. When editing a QuickFill transaction, there's a "Locked" checkbox, but it's not at all apparent what it means. Locked QuickFill transactions can still be edited and deleted, and when using a locked QuickFill transaction you can still change the amount and the category. Locking seems fairly useless.

Here's some tips for working with QuickFill transactions:

1. If Quicken has filled in something from your QuickFill list that's very close, but not quite what you want, you can use the up and down arrow keys to cycle through the items on your QuickFill list that match the letters you've typed in so far.

2. If your QuickFill list has gotten cluttered, use Lists > QuickFill Transactions to bring up the list. Use shift-click to select multiple items to delete.

3. To keep Quicken from automatically adding items to your QuickFill list, go to Preferences > Customization > Registers, and unclick the box labelled "Add new transactions to the QuickFill list". You can also turn off QuickFill altogether:

4. If you have "Add new transactions to the QuickFill list" checked, you can keep a new item from getting added to the QuickFill list by holding down the option key when recording the transaction.

Friday, July 24, 2009

Why not just use Quicken's budgeting, part 1

If you're new to envelope budgeting, but used to traditional budgeting, you may wonder what all the fuss is. Quicken's got a budgeting tool -- why not just use it? Let me answer this question in two parts.

For me, the most important reason is because not everything is a monthly expense. Yes, much of our money is spent on things every month -- mortgage, rent, bills, groceries -- but there are occasional expenses as well. It's these occasonal expenses -- property tax, car repairs -- that can get you reaching for that credit card if you're not prepared.

Rather than letting these big expenses surprise you, the best defense is to save up a little bit of money every paycheck. If you know you're going to spent maybe $2000/year on car repairs, and you get paid twice a month, then you should be setting aside a little more than $83 per paycheck into your car repair envelope.

Setting this up in a traditional Quicken budget just doesn't make sense. Most months you're on well on the positive side, and then when you actually go out and spend the money, it shows significantly negative. As an extreme example, check out this budget graph for my property taxes:

There's no way that I can tell how well I did from such a graph, nor would I be able to know, mid-year, that I'm on track.

To be sure, I'm isolating just one category of expense in the graph above, and you could argue that what I should be looking at is my overall expenses across all categories. Even then, traditional budgeting tools fail -- the highs and lows might be trimmed down a little, but it's still going to show big up and down swings when you have major expenses. Worse yet, you can fool yourself into thinking that you're staying on budget if you see numbers that are matched up on a monthly basis across categories, but if you're not saving up for those big expenses (actually showing a surplus in many months), you'll be caught flat-footed when those big bills come.

That's it for part 1 of why Quicken's budgeting tools don't lead you on the road to financial freedom. In part 2 I'll talk about planning vs. forensic budgeting, and how Quicken makes you feel like you're in control when you may not be.

Monday, July 20, 2009

Quick Review of NeoBudget

A few days ago I ran across, a very low-cost online system for envelope budgeting. I've given it a quick tour, and there are a number of promising elements, but I don't think it's at a point yet where I could use it for day-to-day budgeting. Your mileage may vary -- read on!

Overview has many of the basic elements of envelope budgeting figured out. It was very simple to set up a checking and a savings account, enter in current balances, set up envelopes, and assign amounts to envelopes. Entering transactions was fairly straightforward as well. When entering a transaction into an account you are presented with your list of envelopes and their current holdings, and you can enter which envelope (or envelopes) the money for that transaction should come from. Splitting a transaction between envelopes is simple as well -- there's a handy "remainder" section that tells you how much is left between the total amount of the transaction and the amount(s) identified in the envelopes so far.

NeoBudget also has something that's fairly standard in envelope budgeting - the ability to save allocation amounts for your paychecks. You can identify an income source, a frequency (every two weeks, twice a month, monthly, etc.), an income amount, and an allocation of that income into your different envelopes. When payday comes around you can pick your saved allocations and NeoBudget does the allocation for you.

The Good

Security. Unlike many other online services, NeoBudget does not require you to provide it with your personal banking details. It is possible for you to upload online banking information, but NeoBudget requires you to download the information yourself, which you then upload into NeoBudget. This made me feel more secure -- I'm nervous about providing this sort of personal information.

Low Cost. NeoBudget costs a mere $2.50 per month (less if you do six- or twelve-month subscriptions). Even better, you can try it out without providing *any* payment information, so you don't have to worry about missing the end of your trial period and being on the hook.

Easy Setup. I've been at this envelope budgeting for a while now. I've got a big spreadsheet tracking how much I've got in each envelope. You would think that the one thing envelope budgeting systems would have down is an ability to start up, enter in information about all of your envelopes, with an initial balance for each. You'd be wrong. Fortunately for NeoBudget, this setup is very simple.

Active Developer. The latest update to NeoBudget came just a few days ago, with the launch of a mobile version. From what I can tell, NeoBudget is a one-man show, but he's an active developer.

The Less than Good
No Resolution. While the ability to be able to upload transactions is nice, I take the time to enter transactions manually, so that I don't have to worry about the lag time between buying something and having it show up online, so that I can enter payee information that makes sense, and so that my wife and I are on the same page. What I use online transactions for is to verify that I've entered transactions correctly, and to verify that I didn't miss anything.

I tried this with NeoBudget -- entering a couple of transactions, and then uploading information about those and a couple of others -- but there's no facility for matching the uploaded transactions with the ones that I entered manually. I wound up with duplicate transactions. Bummer.

No Recurring Transactions. Again, I like to plan ahead, so having my bills in a schedule is nice. I didn't see that feature in NeoBudget.

No "Frequently Added" Transactions. While NeoBudget does automate the allocation of income into envelopes, when entering transactions you've got just some text boxes. Again, I like to be able to enter transactions manually, so it would be nice if I could just type in "Unocal" (even better, just "uno" and it would figure out "cal"), and perhaps even remember that the amount should come out of the "Gas" envelope.

Dream List
NeoBudget allows you to have multiple accounts (e.g., checking, savings), and a different set of envelopes for each. For occasional expenses, like property tax or car repairs, I like being able to save the money in savings, and then move the money over to checking when I need to use it. This way I can make at least a couple of bucks on the money. It would be awesome if NeoBudget simplified the accounting of envelopes across accounts.

NeoBudget is easy to set up and is super low cost. If you're new to budgeting and you already rely on online banking to keep your checkbook for you, then it might be just the thing you need to get started taking control of your finances. The addition of a few key features would make NeoBudget truly great.

Thursday, July 16, 2009

What's Envelope Budgeting?

Someone was asking me recently what I thought of, and I said that I wished it supported envelope budgeting. "What's envelope budgeting?", she asked. I've mentioned it here on a few occasions -- here's what I wrote to her:

In a nutshell, envelope budgeting means that you have cash on hand before spending money. In the old days you would cash your paycheck into actual cash, and then divvy up the cash into envelopes marked "rent" or "gas" or "clothes" or what have you. When it came time to buy something or pay a bill, you could only spend the money that you had in that envelope. There's nothing keeping you from moving money from one envelope to another, but the assumption is that you're wise and you're not going to take all of the money out of "rent" to go buy stuff.

Obviously we don't use cash and envelopes anymore, but the theory is still there. A financial management system that supports envelope budgeting wouldn't show you what your checking account balance is as much as how much money you've got in your set of virtual envelopes.

This is different than what Quicken or or a bunch of other financial management tools do. Sure, Quicken lets you categorize your expenses, but it's more forensic accounting ("where did my money go?") than a planning/saving tool. The power of envelope budgeting is that you're giving each dollar a name and a purpose, putting you in control of your money. Envelope budgeting is also much better than traditional budgets for more occasional expenses (property taxes, car repairs). I know I've got to pay property taxes in October, and I'm putting a little money in that envelope now with each paycheck, so that when that big bill comes along, I'm all set. It also works very well for those with irregular incomes -- you can prioritize your expenses, funding the most important envelopes first.

There are a variety of online services and dedicated programs that support the envelope method. I tried out a while back, but it's expensive and they want to know your banking login information, which I'm a little creeped out about.

I'm taking a look at now -- look for a post in the next week or so.

Wednesday, July 15, 2009

Quicken slips again!

It's been a while since I've checked in... Decided I'd stop by Intuit's site and see if there's any news about our favorite vaporware, and there's this note on their site (posted 7/13/09):
We anticipate releasing our next version of Quicken for Mac (formerly Quicken Financial Life for Mac) in February 2010.
This same page says that pre-orders will start in October 2009.

Let's review the history here:
  • The latest version of Quicken for the Mac is Quicken 2007. Like car model years and Madden football, the '2007' in the title means that it was released in late 2006.
  • January 2008: at MacWorld Expo, Intuit announces the next version of Quicken, titled "Quicken Financial Life for Mac".
  • The public beta started in September 2008, and at the time they anticipated a ship date of "this winter" (meaning, presumably, sometime between December 2008 and March 2009).
  • We got our hands on the beta around December 2008 (after Intuit had initially said that public response to the beta was "overwhelming"). In December 2008 they announced that QFLM would be released in Summer 2009.
  • Now here we are in the dog days of summer '09, and the word from Intuit is that the product (no longer called QFLM) will ship in March 2010.

Assuming that the March 2010 deadline sticks (and there's really no reason to believe this, but let's pretend), this will mean that almost four years will have passed between versions of Quicken for the Mac.

The folks at Intuit have a blog posting discussing this latest slip/ship date; the comments on it are fairly scathing.

Truth be told, I'm not surprised that the date has slipped once again. I didn't post anything about the QFLM beta we got our hands on because there was so little to talk about -- huge gigantic features were just not there (but, boy, was there cover flow!). Calling it beta was generous at best.