## Return of the Blog

After posting to this blog only 5 times in all of 2011, I have decided that it is well past time to revive this blog. I regularly come across material that I would like to share on here, but inertia and the press of other concerns tend to take over. No more.

In 2012, I hope to post every week, at minimum. This should be easier than it has been in the past, thanks to a new phone (Baker Botts is now supporting iPhones) and a wonderful new gadget: the amazing and useful iPad 2 that Sarah and I received for Christmas. This truly is an ingeniously designed device. I am actually typing this post on it, which is not quite as natural as typing on a full-size keyboard, but still remarkably easy.

Anyway, look for a major rebound in this space soon.

And if I haven’t talked to you in the last few days, I hope you had a merry Christmas and have a wonderful 2012!

## You Need a Budget! (Review)

Thanks to a post by Tim Challies, Sarah and I decided to download and try a trial of a software product called You Need a Budget, or YNAB. We are now in love with this product.

The premise of YNAB is simple: (1) everyone needs to budget, and (2) no other software products out there on the market really get it quite right. I still remember clearly a moment when I was a kid, probably around middle school age, when somebody made a statement to the effect of “Oh, well, the [family name]s have to live on a budget,” with the clear implication that this was a lamentable condition. My reaction was that this was an absurd way to think—even the wealthiest individuals would be better off budgeting. So, I was already sold on YNAB’s first premise. As for the second, we have been doing our budgeting using a combination of Quicken 2011 Premier and a complicated Microsoft Excel spreadsheet. (We had also been using Mint, but abandoned it after it proved to be entirely unreliable—it would show that we had spent huge amounts of money in categories without a single transaction, or very little in categories with relatively huge amounts of turnover, like groceries.)

This was a pain to maintain and made it very hard to track how well we were doing on a month-to-month or longer-term basis. Quicken would routinely panic if we paid our car insurance in the last week of July, for example, rather than in the first week of August, and the Excel spreadsheet made month-to-month comparisons nearly meaningless. After all, what did it really mean if we had $X in the bank at the end of June and only$X-100 at the end of July, if we had also made a large, planned-for, one-time purchase in June? Or if we came out with more money than we anticipated, but had also received a gift or some other one-time income? This system worked in the sense that we were able to make sure we didn’t over-spend, but it wasn’t exactly transparent. So, we came to YNAB with open minds.

YNAB is based on four simple rules:

1. Give every dollar a job. Every dollar should have a job, and “not budgeted” doesn’t count. This is where Quicken falls short the most noticeably—the built-in budgeting features in Quicken just tell you what’s left, encouraging you to go spend it somehow. We worked around this by using Quicken with a series of spreadsheets that I cooked up, but this was not a user-friendly way to do things, and it required a lot of maintenance.

2. Save for a rainy day. This concept starts with the emergency fund that everyone should have (a la Dave Ramsey), but goes further: YNAB is intended to help you smooth out the financial ups and downs of your life by helping you budget for lumpy expenses (car insurance, property taxes, or anything else that doesn’t hit every month, or hits in variable amounts).

3. Roll with the punches. This rule is all about accountability. If you overspend a category in your budget in YNAB, it doesn’t let you just shrug it off and try again. It forces you to figure out how to make up the difference, whether by spending less in that category next month or allocating additional money to that category from somewhere else.

4. Stop living paycheck to paycheck. This is the real goal of YNAB: to live off of last month’s income. In YNAB terms, this is a “buffer” (and having acheived it is affectionately called being in “bufferland”). Because there is no “perfect” month when it comes to budgeting, the idea of the buffer is to smooth out the bumps of life, especially for people with irregular income or every-other-week rather than twice-a-month pay schedules.

YNAB is entirely built around these four rules, with the result that you can easily see at a glance (1) how you are doing this month, (2) what effect, if anything, your spending this month will have on next month’s budget, and (3) how you have done over time. To help with this at-a-glance summary of your finances, YNAB also includes some very handy reporting functions that let you get both reports and graphs on the fly. Of course, for any of this to work, you have to get your information into YNAB. While YNAB does not have “direct connect” functionality to download your transactions for you, it does make it very easy to work with standard .QFX files from your bank (or exported from Quicken).

As I said, we love YNAB. I would strongly recommend it to literally anyone.

[Update & Disclaimer: When I originally posted this review in August 2011, I did not receive any compensation for this article or for any traffic to youneedabudget.com from this blog; I just really like this product!  As of July 2012, I have added a special link to this post; I will receive a small commission for any sales made through that link.]

## What goes up must come down

I put up a new flag on Monday morning. Today a huge branch fell on it and broke the flagpole. That was short-lived…

## Win Some, Lose Some

Today’s win: successfully replacing the laser in a broken Wii console, without wiping the saved data or shorting anything out. Thank you, Console Zombie!

Today’s loss: finding out that Momentum MINI in Houston put much cheaper tires on my car two weeks ago than the ones that I came in with, even though they didn’t mention that fact either before or after, and it cost me as much as it would have for the good ones. I then found out that they also just happened to leave $1,700 off of the estimate for the additional work I needed, even though all of the parts and labor involved were listed. Of course, the guy I was dealing with insisted that we had discussed all of these things and that they only reason he didn’t include all of the prices previously was that I told him to hold off on giving me the full quote for some reason. I don’t really enjoy being lied to or paying unreasonable amounts for routine maintenance, so I made him give me back my key so that I could go get a quote that is on this side of the sanity spectrum. ## Jamaica and the Amazing Airtight Humidor We just got back from Ocho Rios, Jamaica, and it was awesome. Last week was our first real vacation (“real,” as in longer than a three-day weekend and not a holiday visit with family – a true getaway) since 2008. It was way overdue, and well worth it. One weird finale to the trip: my travel humidor vacuum-sealed itself on the flight back. The air pressure in the plane’s cargo hold got low enough that the travel humidor’s lid was sealed so tight after we landed that I couldn’t get it open. (I did eventually get it open, but only after wedging the file attachment on a pair of nail clippers between the base and lid and using it as a lever. Even then, it took about five seconds of hissing for the interior and exterior air pressures to equalize.) Anyway, now it’s back to the grind tomorrow. ## You Get What You Pay For As I’ve blogged on several occasions (here, here, and here), my trusty Dell finally got beaten into immobility during law school. This prompted me to run out and buy the cheapest thing I thought I could live with for a year or two. As the above links indicate, that was a mistake. My Sony has shed five keys and has several others that stick or fail to respond. The Wi-Fi is fickle, the CD/DVD drive is totally kaput, and it requires near-constant TLC (not to mention an external keyboard) to function at all. Oh, and you could fry an egg on it even when it’s idle. So, I’m finally getting a new laptop. As those of you who’ve seen the present disaster in action know, it’s (past) time. Thanks, Sarah, for my Christmas gift! For anyone (i.e., Brian & William) who wants gory details: Dell XPS Studio 16, 2.8 GHz Intel Core Duo with 6 MB cache, 4 GB DDR3 RAM, 512 MB ATI Mobility Radeon graphics, 500 GB 7200 rpm HDD, 802.11a/g/n and 10/100/1000 ethernet networking. (Yes, Dell – with the exception of my own finally beating the living daylights out of my old laptop, I’ve had very good experiences with Dell’s products.) ## Hard Times You know times are bad when large corporations start accepting advertising money to do product placement in their web chat tech support sessions. For example: “Thank you, I’ve found your account information.Â While I’m looking up your account info, be sure to check out _____, where you can meet friends, play games, etc.” That just happened.Â And yes, I really was told that my account info had been located, then pitched some nonsense third-party garbage while the tech support person “looked up” my account. Oh, and said company did not resolve my issue. This, despite the fact that this was my second contact with tech support stemming from the complete failure of their website to display the option I need to access, except in how-to diagrams. Truly impressive. ## Mint A few days ago I lamented (here and here) the difficulty of doing certain at-a-glance budgeting in Quicken.Â I think I have found many of the features I was missing through the excellent free service Mint.com. The main thing I have been missing is at-a-glance budgeting.Â That is, I’d really like to be able to see, in just a moment or two, how our current spending in a certain category, such as dining out, stacks up to our budget for the month (or quarter, or year, etc.).Â I would like to be able to do it on a single screen, with minimal scrolling, and any scrolling should be vertical, not horizontal.Â This has long been a failing of Quicken; so far as I have ever been able to tell, there is no way to see in one fell swoop what you’ve spend, what you’ve budgeted, what’s left over, and whether or not your spending is more or less on-pace for wherever you are in the relevant period.Â In addition, rollover categories are a must.Â Telling me that I have missed my budget twice because I spend$100 on groceries on September 30 and am under-budget by \$100 in October is not particularly helpful.Â  Unfortunately, that is all that Quicken offers, and that in a less-than-user-friendly format.Â  I recognize (as Mark reminded me today) that I am a long-tail user of Quicken, but this seems like bread-and-butter, basic, should-have-worked-well-since-Windows-95 stuff.Â  The good news is that Mint does all of these things fairly well, as evidenced in this (old) screenshot (this is a Mint-provided image, not our budget):

The new version is much improved; it’s actually a lot like the “Savings Plan” feature in Quicken 2009, but better due to the use of rollovers, the prettier and simpler interface, and the fact that I don’t (apparently) have to set a new budget every month.

Now, the irony of this situation is not lost on me, given that Intuit (maker of Quicken) just announced its acquisition of Mint.Â  Despite the many features of Quicken which are not found in Mint’s offering, I have to say that was probably wise: Mint is extremely user-friendly and easy to use.Â  Given the extent of overlap, the speed at which Mint was being improved, and that Mint is a free service while the full-featured versions of Quicken are not, one can see why this acquisition came about.

Other issues that had concerned me included Quicken’s kludgy handling of interest versus principal for budgeting loan payments and its inability to connect to my student loan servicers.Â  I could use Mint in the same way I use Quicken, tracking interest and principal separately for the most accurate possible look at the bottom line and our progress in building equity in our assets or reducing student loans.Â  That seems unreasonably redundant, however, and would defeat the purpose of my signing up for Mint, in the first place.Â  In fact, Mint handles tracking and classifying loan payments very nicely without my tweaking anything.Â  As for student loan servicers, so far, Mint has blown Quicken out of the water – setting up connections to these companies was just as easy as setting up a bank account, and as anyone who has used a student loan website recently can attest, that is no small feat.Â Â  Another major complaint I have had is that Quicken would not let me use the quicken.com site to view information about our accounts or budgeting when I am away from my personal laptop.Â  Allegedly, it can do that, but I have never been able to update quicken.com without an error in Quicken.Â  Because Mint is always up to date, online, and includes budgeting features, it solves this problem as well.Â  (I recognize that many banks’ websites now allow users to view multiple accounts, including those at other institutions, in one place, but none of the institutions at which we have any kind of account have nearly the feature set Mint offers.)

So, in summary, while Mint does not have enough features to make ditching Quicken entirely a wise choice for us, it is an extremely useful supplement to Quicken.Â  We are going to be using it heavily, and hopefully will not need to go crazy with Excel or some other, redundant system.

[Note: I am, of course, hyper-conscious about security with such things.Â  Mint has addressed security and privacy issues on their website. For us, given that we live in an imperfect world and that we already necessarily entrust sensitive information to Quicken and various institutions, we are comfortable with the way Mint manages privacy and security issues. You, the reader, need to reach your own conclusions on whether or not you are comfortable with Mint’s service, and my review is not an endorsement for general use or advice of an attorney, accountant, or any other professional service provider.]

Disclaimer: Mint.com is a free-to-use service and I am not receiving any compensation for my use of Mint or for posting this information, which represents solely the private opinion of the author and not an endorsement of any provider of goods or services.