Summary:

A listener asks ”What apps or tech do you use to help manage your finances?”

In part 1 of this two-part show I talk about:

  • Why it’s important to build awareness about your expenses
  • Banktivity: I use this app for tracking my expenses
  • Mint.com: A classic app for budgeting and expenses
  • YNAB: An envelope system for tracking your budget – which really appeals to some people
  • Simplifi and Trubill: Another couple of budgeting apps that clients have recommended to me.

Don’t forget to tune into Part 2 where I talk more about investments, credit cards and financial planning.

Find out more about Mike at https://www.mortonfinancialadvice.com and connect at https://www.linkedin.com/in/mwsmorton/

Transcript
Matt:

Welcome to real financial planning cast on K L available

Matt:

wherever you get your podcast.

Matt:

I'm Matt Robison.

Matt:

I'm joined as always by Mike Morton, the host of financial planning

Matt:

for entrepreneurs, the Mike Morton podcast, and also the proprietor

Matt:

of Morton financial advice.

Matt:

He's a personal financial planner advisor, Mike, welcome him back.

Mike:

Yeah, thanks, Matt.

Mike:

I love how you do that in one breath.

Mike:

It's really great.

Mike:

How you can just get all that

Matt:

You know What's weird is I can't hold my breath for a

Matt:

word I say on the air on radio.

Matt:

I have terrible lung capacity, but for reason on the air, I'm able

Matt:

deliver your entire bio in one breath.

Matt:

I'm not sure what that says about me.

Matt:

Or about frankly, Mike,

Matt:

we are having a conversation offline.

Matt:

This was actually a return of a feature we've been doing recently

Matt:

of listener questions and reached out to a few regular listeners.

Matt:

I said, so we've been on a run of episodes.

Matt:

Did a deep dive those really cool kind of a masterclass type episode.

Matt:

And we wanted to go back to covering some more listener questions.

Matt:

What do you have on your mind?

Matt:

And we got like 50 questions and so you were sort of diving through them,

Matt:

trying to decide where do we go first?

Matt:

And we found one that really appealed to me because I think this

Matt:

is super useful for dopes like me who are not financial planners.

Matt:

And just maybe in, in the course of listening a podcast or a radio

Matt:

show like this, just want to make things a little bit easier in

Matt:

their fine financial planning.

Matt:

So here was the question.

Matt:

here was the listener question.

Matt:

What apps or programs do you use?

Matt:

To make your financial planning a little easier.

Matt:

And what do you advise that your clients use?

Matt:

So Mike, I wanna get to that question first.

Matt:

Let's just remind all our listeners, if you wanna submit

Matt:

yet, we now have a long list.

Matt:

So it's probably gonna be a few before we get yours.

Matt:

But if you wanna submit a listener question, what's the best way to do that.

Mike:

Best emails, financialplanningpod@gmail.com.

Matt:

Cool.

Matt:

And you can also go on the Facebook page for beyond politics with Paul hos

Matt:

and Matt Robeson, which is the page for the show that we appear on WK XL.

Matt:

All right, Mike, what do you use?

Mike:

Yeah, it's a great question.

Mike:

I use of course, like many people, a variety of tools to try to have

Mike:

different viewpoints depending on what I'm trying to accomplish.

Mike:

You put it in the realm of, you know for finances, know what apps

Mike:

do you use to govern your finances or get insights into your finances

Mike:

or budgeting or all different items.

Mike:

So Happy to talk through what I personally use and then also what I've seen my

Mike:

clients use and what's been successful.

Mike:

So I broke it down a couple categories, Matt, between budgeting investments and

Mike:

then logging into you know wherever your credit cards or banks are, of course

Mike:

you're gonna use kind of portals as well.

Mike:

So you wanna start with the

Matt:

Yeah let's do budgeting first, cuz that hits absolutely everybody,

Matt:

at some point I think everyone listening to this has had to figure

Matt:

out am I gonna go broke month?

Matt:

So Very super basic thing to try to out.

Matt:

Yeah.

Matt:

So budgeting, what do you what you do or what do you advise

Mike:

Yeah.

Mike:

So I'll talk about a couple different things.

Mike:

One, you don't have to have a budget.

Mike:

All right.

Mike:

Now that might sound like very bizarre coming from financial Pfizer.

Mike:

Like you don't a a budget, but here's the way I always position

Mike:

it because many people hate.

Mike:

Tracking all that are expenses and spending it.

Mike:

Doesn't bring a lot of joy to most people thinking, oh, do I

Mike:

really have to track my budget?

Mike:

And then you're just immediately coning.

Mike:

This just means I have to find places to spend less money And I

Mike:

don't like spending less money.

Mike:

I like spending money, so you don't have to have a budget.

Mike:

What you have to do is sure you have the right.

Mike:

amount of savings.

Mike:

For now and for the future.

Mike:

So you need to look at your yearly, I would say that the start of the year, just

Mike:

look at your yearly income and come with yearly expenses and savings off the top.

Mike:

So you want to target about that 15% to save for the future.

Mike:

The mathematics I've gotten into this other podcast, just the

Mike:

mathematics kind of work out.

Mike:

If have a regular career, if you're saving 15%.

Mike:

throughout time.

Mike:

And so save that off top in your 401ks, your IRAs, your 4 0 3 BS, automatically

Mike:

these away or into a brokerage account.

Mike:

If you save off the top.

Mike:

Then you can spend what's left over now.

Mike:

Maybe you also need to save for a down payment for a home, or you to

Mike:

save, up your emergency savings.

Mike:

So figure out things, not only for your retirement or for later, but if

Mike:

there's other things You need to save for maybe a travel budget, you like to

Mike:

save, know ahead your travel budget, put together those 1, 2, 3, 4 items

Mike:

you're saving for make them automatic.

Mike:

So you're saving off the top straight from your income, then

Mike:

everything else left in your checking your everyday checking account.

Mike:

You can go ahead and spend that cuz you've already saved for future

Matt:

What I like about this is that this is a shortcut that's of click above even.

Matt:

All right.

Matt:

What app do you use?

Matt:

it's an inversion of the way.

Matt:

I think most are forced to think about especially if if there's a stat out

Matt:

there that gets very distorted, that 80% of Americans paycheck to paycheck.

Matt:

paycheck.

Matt:

And if you are in the mode, Where, you are pretty tightly balanced

Matt:

what's coming in and what's going out.

Matt:

Then the mindset that you have to adopt is all right, I'm going pay the bills

Matt:

and then anything that's left over.

Matt:

I will save.

Matt:

But what you're saying is if have the ability to get a little bit ahead of

Matt:

that maybe you've hit a phase of life where you're not in that mode as much,

Matt:

and you can do a little bit of planning.

Matt:

Then just the script, just start with, I'm gonna set this target savings and

Matt:

I'm gonna automate it so that it happens.

Matt:

And then I don't really need to worry about a budget.

Matt:

And the easiest hack for the whole process.

Matt:

If it applies to you, if you're able to do that

Mike:

I also think.

Mike:

You know you say, if you're able do that, I think everybody's able to do that.

Mike:

you have to do Even if you don't have enough to save, then you know

Mike:

that that's your awareness like.

Mike:

Geez.

Mike:

I'm really living a paycheck to paycheck.

Mike:

There will be nothing at the bottom, but I would flip the script

Mike:

and say what do you save first?

Mike:

And this applies to business as Well, own business.

Mike:

business It's like the a profit first mentality.

Mike:

I.

Mike:

wanna pay myself first, pay your future self first, pay yourself for your travel

Mike:

budget, your emergency savings, your future self and save those things first.

Mike:

And you will find ways to, make that happen because once it's gone and outta

Mike:

your bank account, can't spend it , so you will find a way to make happen.

Mike:

And look, if you're in the situation you really can't start super small,

Mike:

with like 10 bucks a month, 20 bucks a month, whatever you can do

Mike:

start just a tiny bit go from there.

Mike:

But definitely look at that

Mike:

first

Matt:

I, I, what I like about that is that, I always advise people like

Matt:

young people who are considering doing a sport or an activity in college and

Matt:

they're, I don't really have the time.

Matt:

actually what you find is that if you do something that you really

Matt:

have to commit to, it's a major time commitment, effort, commitment.

Matt:

It actually focuses in the rest of because you're forced

Matt:

into that kind of discipline.

Matt:

And so what you do is you make the commitment to, you know let's

Matt:

you were a rower or whatever, and then whatever's left over.

Matt:

That's the time you've got and you're gonna make it work

Matt:

for the of your schoolwork.

Matt:

All right.

Matt:

But to the extent that you do use a tool, let's you you, do want

Matt:

to dive in little bit further.

Matt:

What do you use

Mike:

All right.

Mike:

So let's talk about budgeting?

Mike:

apps.

Mike:

I use one that's called Tivity, and this is for the Mac.

Mike:

And I ran it quite a few years ago.

Mike:

And I really like it now.

Mike:

I've used it.

Mike:

off and on Right.

Mike:

now.

Mike:

I'm not using it, but I have used it religiously for

Mike:

tracking all of my expenses.

Mike:

So every week I would download.

Mike:

You know It would hook to my accounts that I it to.

Mike:

This is again called Tivity and they have a it's for the Mac

Mike:

and the iPad and the iPhone.

Mike:

I think it's only apple products

Matt:

Got it

Mike:

And you know every week it would hook to my accounts that had set up either

Mike:

my credit card, my checking account, pull down, you know what those latest.

Mike:

Transactions were and I would categorize them.

Mike:

So I'd spend my time categorizing every transaction.

Mike:

And what I liked about it is they do have a budgeting tool, but I used it more for

Mike:

reviewing my expenses monthly, quarterly, and definitely at the end of the year.

Mike:

So I just aggregate all of my spending for the entire year

Mike:

and see all the categories.

Mike:

How much was I in each category and really what it's useful, or I

Mike:

find it this is looking backwards.

Mike:

, I'm not setting a budget.

Mike:

I'll talk talk about some other tools where you set a budget, but

Mike:

this one I'm looking backwards as what did I actually spend?

Mike:

It's not related to having a particular budget in mind.

Mike:

It's really categorizing on my past expenses.

Mike:

What I like about that and for clients as well is building awareness.

Mike:

Are you spending your money?

Mike:

And how much money are you spending on those things?

Mike:

And I always recommend don't get too granular with the categories I did.

Mike:

I probably had 20 or 30, which is probably fine.

Mike:

But you could go smaller than that.

Mike:

You only want to have categories where you might make a change.

Mike:

So If you're thinking well my dining out.

Mike:

May, maybe I wanna make a change there.

Mike:

So I want to track that if you're thinking your coffee shops uh maybe you know I get

Mike:

the daily coffee I make a change there Well then have a category daily coffee.

Mike:

If you're not changing your kids' tuition, then you can bucket

Mike:

that with other kids' expenses.

Mike:

I'm gonna buy my kids' clothes and tuition and other then put it all under kids.

Mike:

You don't know need to break it out so granular because you're

Mike:

not gonna make a change on it.

Mike:

Anyway.

Mike:

Okay.

Mike:

So just that's what I like about those budgeting.

Mike:

That it's a budgeting tool, but again, I'm not using it per se as

Mike:

a budget, just for looking at past expenses and to build awareness.

Mike:

So I use the tool called Tivity.

Matt:

And it stood out me in what you just said is it's useful

Matt:

under certain conditions, right?

Matt:

Because your first piece advice still applies, which is, look, if

Matt:

you can, you know focus on savings first and then that up alone.

Matt:

Can take the place of a detailed budgeting process, which who

Matt:

wants to get into all that.

Matt:

But I do there's some value cuz I've done the same that you just described,

Matt:

which is I've done a backwards look.

Matt:

But with that really important caveat in mind of, I really

Matt:

wanna focus in on the things.

Matt:

That can change.

Matt:

We've talked on this show before about the buddy tape principle, which

Matt:

is, it's only worth doing something.

Matt:

If it's going to change what you do in the future, right?

Matt:

Like it's only worth evaluating something if you're gonna change behavior.

Matt:

And know so for me, I've had that same thing.

Matt:

Am I going to really change our grocery store budget?

Matt:

I probably could.

Matt:

I probably could, like we could spend a lot more time finding coupons.

Matt:

We could, change the things we eat a little bit, but on the margin, we've

Matt:

decided that I I think there's enough savings that we can find in that

Matt:

category to make a huge difference.

Matt:

In our overall financial picture, we could make a much bigger

Matt:

difference if we said, you know what?

Matt:

We are gonna really limit on, on entertainment.

Matt:

We're gonna really limit, we're gonna have one streaming service

Matt:

that would save us some money.

Matt:

So I could see the value in an approach like this.

Matt:

If you really stick with the caveat of like, where are the areas that

Matt:

truly make a difference forward?

Mike:

Yeah.

Mike:

And the other point I'll raise about building awareness is that you may find

Mike:

you are spending, isn't aligned with what's bringing you the most value.

Mike:

So in your example of groceries and entertainment, you could say,

Mike:

geez, maybe I can cut spending there cuz I don't really care if I have

Mike:

rice or beans or like the greatest steak it doesn't bother me, whereas

Mike:

my entertainment, no, no chance.

Mike:

I'm cutting out those services.

Mike:

I use all of 'em every night.

Mike:

And I love it.

Mike:

I to sit down with my partner and watch something and this is

Mike:

perfect time so there's very clear where you wanna be spending money

Mike:

and that's the awareness piece.

Mike:

All right.

Mike:

me mention some other apps, cuz they're really useful ones.

Mike:

Mint.com is a very popular one.

Mike:

I've used that in the past.

Mike:

You can track your past expenses, but you can also set a budget.

Mike:

And then expenses get automatically categorized into that budget.

Mike:

So can see oh, I'm gonna spend 500 a month on groceries.

Mike:

And as you spend it, it's tracking against that 500.

Mike:

So towards the end of the month, can see how close you are, if

Mike:

you're under or over on all the categories in terms your budget.

Mike:

So that would really help you in making sure you stay within spending on

Mike:

different

Matt:

Yeah.

Matt:

I've used mint a little bit a matter of fact, I stopped using

Matt:

it and it's like quitting the gym.

Matt:

I, they keep sending me and I can't like, and I'm like uh I should

Matt:

keep it you know anyway, go on.

Matt:

Yeah.

Matt:

Mint.

Mike:

You're still

Mike:

paying

Matt:

like I like them

Mike:

Um

Matt:

Well that's a place I could economize if I did but.

Mike:

there you go.

Mike:

that's great.

Mike:

You should have a line item for that in your,

Matt:

there's 72 bucks a year that I could do without

Mike:

That's right.

Mike:

So there's some other ones there I've tried also one called YAB.

Mike:

You need a budget.

Mike:

Y N a B.

Mike:

YAB.

Mike:

You need a budget.

Mike:

And what this is based off the whole idea, the envelope system.

Mike:

So the way the envelope system works is that you get your a paycheck, think of

Mike:

actual cash, so you get your paycheck and you take it to the bank And now

Mike:

you've got a thousand dollars of cash.

Mike:

You cashed in and you have a thousand Dollar bills.

Mike:

Then you eight or 10 different envelopes.

Mike:

get the mortgage, you get the groceries.

Mike:

You get the clothing, and you put some dollars into each of those envelopes.

Mike:

So you put, $50 in here, $150 in this other envelope and $20 in this envelope.

Mike:

And then as you go when you go out, dining out, you take your out envelope.

Mike:

And you use the money from that.

Mike:

Okay.

Mike:

So in other words, you're taking your income and assigning every dollar, a job.

Mike:

You're putting it into an envelope, but this dollar's for the mortgage.

Mike:

This dollar's for dining out.

Mike:

This dollar's for my entertainment cost.

Mike:

And then when you have those B those bills expenses, you take

Mike:

the money out of those envelopes.

Mike:

So it's pre saving for all your expenses for your budget.

Mike:

And That's how YAB works.

Mike:

You assign every dollar, a job.

Mike:

It's all digital of course.

Mike:

Okay.

Mike:

No actual envelopes, but you assign every dollar, a job.

Mike:

And then as you take money out, it's automatically tracking all those budget

Matt:

Well three things First all, I can already see that this conversation

Matt:

is going to be a lot deeper and longer, and it gets into all these of things.

Matt:

So I'm just gonna tell our listeners.

Matt:

We are planning for this to be about a 20 minute conversation

Matt:

to go onto the radio broadcast.

Matt:

I'm gonna just go ahead and that like LeBron calling his own number on a play.

Matt:

I'm gonna say, we're gonna turn this right now into a two part episode.

Matt:

So we're gonna keep going with conversation Second of all, I love the

Matt:

idea of stuffing money into envelopes.

Matt:

It reminds me of everyone attending my Bartz.

Matt:

And third of all, do think

Mike:

How

Mike:

How big

Mike:

were those envelopes at

Matt:

They were really small.

Matt:

My bar mitzvah was you know what it was we could do.

Matt:

It was what we could do.

Matt:

It was nice for some reason all of my friends had heard about a tradition of

Matt:

throwing candy As soon as you finish you know giving your bar speech um

Matt:

you know throwing like hard candies little hard candies Um at the speech

Matt:

giver like at their head And apparently this is a tradition that only applied

Matt:

at my mitzvah I dunno It was weird.

Matt:

Anyway, the point is we're way off track here One of the interesting

Matt:

things about YAB is that it does kind connect to what we were saying a moment

Matt:

ago is look, if you're in a position where you can set savings first.

Matt:

you're in a tight budget situation let's say you're earlier in your

Matt:

career, here a little bit younger.

Matt:

It's not this app particularly good for you If you wanna impose little little

Matt:

bit of that discipline on yourself and you have very specific like look it's

Matt:

not like you wanna like sit in the dark you know doing absolutely nothing.

Matt:

Like you have a little bit of money to spend but you just keep Pretty

Matt:

tight control over it And this seems like a good system for that.

Mike:

well I've found, it's interesting.

Mike:

This one particular actually resonates with some people and and other

Mike:

people totally don't understand it.

Mike:

So I always recommend like check out the website, try it out.

Mike:

Because for the people it resonates with, they just love it.

Mike:

I know people that make.

Mike:

Quite a bit of money that still use YAB.

Mike:

Just because they want keep track.

Mike:

It's so nice to be able to keep Where am I spending my money?

Mike:

I said I only wanted to spend this amount on these categories, so I only

Mike:

put those dollars in and they're gone for that month or whatever it is.

Mike:

So It's a really unique

Mike:

tool

Matt:

Yeah It's like It's like the weight Watchers of budgeting right

Matt:

It's like you so many points you know to use up on things, use it.

Matt:

done And uh if it works for you is awesome Um alright And and there

Matt:

were a couple others, I think you wanted to throw out from clients,

Matt:

right

Mike:

Yeah, So on the budgeting, just to round out the budgeting category

Mike:

here which we can probably do some other ones I've heard of but I don't

Mike:

have firsthand experience is simplify.

Mike:

And that ends in an eye.

Mike:

So simplify with an eye at the end, of It is the internet,

Mike:

to spell things differently.

Mike:

And then true bill, which does not have an E I believe T R

Mike:

U

Mike:

B I

Mike:

L

Matt:

you should only spell

Matt:

things the way that they're spelled in modern life.

Matt:

If you want people be able to find them, if you wanna say

Matt:

mysterious you know call it

Matt:

whatever like it's it's spelled with this Z Um

Mike:

That's right with four Zs.

Mike:

So those two are I've heard really good things about, cuz a lot

Mike:

of people mint turns 'em off.

Mike:

Oh, I tried make, cause that one's been around for a long time.

Mike:

People have tried it and so they've kind of moved on to something else.

Mike:

So those are a couple other ones check out.

Mike:

True.

Mike:

Bill, I think is pitched kind of a a bill payment system or

Mike:

really keeping track of bills.

Mike:

But I've heard it's really great for budgeting.

Mike:

As well, and very simple and easy

Mike:

to use So I've heard good

Matt:

You know and before we um we're gonna have to wrap up um we're gonna have

Matt:

to wrap up for a moment But in in just a moment is that another do is that another

Matt:

to automate your clients to automate as many bill payments as that you you their

Matt:

bank spending side you kind of have the spending side as preset as possible.

Mike:

Yeah, I don't get into too much the bills per se, cuz most of

Mike:

those are going, you know you when you set up these recurring things,

Mike:

whether know an entertainment bill or something like that, it's always

Mike:

just coming your credit card, right?

Mike:

Like you just put in your credit number and it goes there.

Mike:

What I do recommend and this is what you're getting.

Mike:

at Is

Mike:

Any of your credit cards when you set up credit cards or you have credit cards?

Mike:

Make sure you have the auto pay feature turned on, pay your credit card off

Mike:

every single month using an autopay feature to pay off the entire balance.

Mike:

And if you're not there yet, if you can't do that focus on that first,

Mike:

always get your credit card debt down.

Mike:

First the interest is super high.

Mike:

you're just building, more debt there's tons and tons of how to work on that.

Mike:

So if you find yourself in situation, but for everyone everyone else.

Mike:

Just make sure auto pay on.

Mike:

You don't wanna miss a payment cuz that's easily 10, 20, 50 bucks that

Mike:

you're just paying an interest.

Mike:

just from missing you know

Matt:

All right we're gonna break here for radio gonna break here and we're

Matt:

gonna be right back be right back Mike Morton with Mike Morton or even next week.

Matt:

If you're listening

Mike:

That's right.

Mike:

Thanks.

Mike:

Thanks for joining us on financial planning for entrepreneurs.

Mike:

If you like, what you heard, please subscribe to and rate the podcast on

Mike:

Apple iTunes, Google play Spotify, or wherever you get your podcasts.

Mike:

You can connect with me on linkedin or mortonfinancialadvice.com.

Mike:

I'd love to get your feedback.

Mike:

If you have a comment or question, please email me at

Mike:

financialplanningpod@gmail.com.

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