How to Master Household Budgeting? Focus on Cash Flow

in Personal Capital News by

Online banking and a host of money-managing websites and apps have made projecting and monitoring budgets easier than ever, allowing users to categorize and track expenses in a streamlined way that wasn’t possible with the paper balance sheet. Still, budgets are famously fickle.

Other than a few static expenses like the cable or garbage bill, it’s hard to know how much you’re likely to spend in a given month. August or September means back-to-school gear for the kids. December is gift-buying time. Go on vacation, and your “entertainment” budget for the month — maybe the year — is shot.

While budgeting tools are certainly useful, what’s ultimately important is that people have a sense of their overall budget every month. Did you spend more than you earned?

If your spending — or earnings — come from more than one source, it can be hard to keep track of that balance, even with the various e-budgeting tools now available.

The Fix:

With Personal Capital’s dashboard application, users can plug in all their accounts — checking, savings, 401(k), college fund, loans, investments — and get a sense of how their bottom line has moved every month. What do all your expenses — the mortgage, bills, loan payments, groceries — look like against all your earnings?

The Personal Capital dashboard puts Money-In vs. Money-Out stats on the top of dashboard when you log in. You can flip back and forth between “view income” and “view spending,” and dive in deeper by clicking whichever slice of the pie you want for a more detailed view of your transactions.

By clicking “More,” users can look at transactions from each account, adjust the timeframe, and see which expenses or income take up what percentage of their budget. A bar-graph also shows income-vs.-spending month by month.


On the iPhone and iPad apps, spending is shown in the “Cash Flow” view: A pie chart depicts your transactions by type (ATM withdrawals, groceries, bills, etc.), while a line chart tracks spikes and dips in spending over time. Users also see which transactions account for what percentage of overall spending.

For those who want more control over organizing their expenses, Personal Capital allows users to categorize their transactions, either in general groups like “Entertainment” or “Food,” or in customizable fields, like “Fido’s dog food” or “Grandma’s stuff.” You can even add your own descriptions of each transaction.

With a 360-degree view of all spending and all income, users can really focus on the most important part of responsible budgeting: Making sure they’re staying in the black.

More: How to (Always) Know What Your Stock Options Are Worth.

Top image via crafthaus.ning.com.

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6 comments

  1. Ryan

    Hello,

    What if I create monthly budget called “auto” which should cover my auto maintenance costs. In reality I don’t think I’ll spend 40 every month, I’d like to save 40 a month. But I only have one savings account so how would I know at any given time how much i had saved in the auto bucket? Then if I spend 87.35 of that I’d like to know i have X amount left as I continue to contrubute to that bucket monthly.

    Thanks,

    Ryan

    Reply
  2. Heather

    Yes, I would like to know as well. Is there an option for this? Following…

    Reply
  3. Nathan

    CapitalOne 360 has sub accounts you can use for this purpose. I have multiple accounts for things like emergency expenses, auto, insurance, travel, etc.

    Reply
  4. Anonymous

    Can you create reports of categories of expenses for use in preparing tax returns? Thanks!

    Reply
  5. Sherri

    Can you create reports on expense categories for us in preparing tax returns? Thanks

    Reply
  6. Eric

    Does your software allow the user to break up income by Spouse?

    Can I create sub-categories in expenses? For example, let’s say I want to be able to have my Trader Joe’s grocery expense fall under overall groceries, but I also want to view and parse out what my trader Joe’s expense is compared to my overall Shoprite/Cost Co grocery bill, does the application allow me to break down my expenses and review in charts, etc.?

    Thanks!

    Reply

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