While I never used it, the popularity of the budgeting program Mint was inescapable. It was talked about endlessly on many financial forums and recommended by many users. Now it’s kaput, merged into Credit Karma. (Intuit owns both.) The problem is, Credit Karma is not currently as robust as Mint when it comes to budgeting, and it’s unknown if it ever will be. This leaves users scrambling to find a replacement.
This illustrates the problem of relying on third-party software for your finances. I wish I could say that it’s a problem unique to free software (Mint was free), but it isn’t. Paid programs are abandoned or sold off just as easily. This leaves users trying to find a new program that offers all of the features they had before and the ability to import data from the old program to the new. Not an easy thing to find. Once you’re comfortable with something and have all your data stored in it, moving on is tough. Even if you’re willing to move from free to paid, you’re probably still going to have to make compromises. And you may lose your data if your old program doesn’t export in a widely-used format.
The best alternative to third party software
I’ve been on this carousel before. Programs have been sold out from under me many times. (And not just in finance.) I finally got tired of chasing solutions and decided to do what I probably should have done from the start: Get comfortable with spreadsheets.
Admittedly, spreadsheet programs can be intimidating, especially if you want to use them on an expert level to track investments, create projections, and track net worth. The good news is that once you are proficient and have the financial spreadsheet(s) of your dreams, your work is mostly done. (Besides continually entering data, of course.)
Here’s why you should love spreadsheets
- It’s yours. This is the biggest benefit. Once you’ve got it up and running, the spreadsheet is yours forever. You won’t find yourself without updates, or struggling along without a feature you adored. No more last minute scramble to find a replacement. Spreadsheet programs have been around forever and they are so ubiquitous, I can’t see them ever disappearing. Even if the one you are using disappears, there are many more choices.
- Most use a universal format. Most programs store or export data in a universal format, meaning that even if a program loses support, you can easily move to another.
- Several good free options. You can find many free spreadsheet options. Google Sheets, Libre Office, Numbers (comes free with Macs), and Open Office are just a few of the free alternatives. Most of these freebies support the universal Excel format, making data export easy if you ever need it.
- Many offer options for connecting to a bank/importing data. If you want to import transactions directly, many programs offer add-ons or import abilities that can do that. But…
- You get a fuller view of your finances. Setting up a spreadsheet from scratch and entering the data manually forces you to get up close and personal with your numbers. There’s no hiding behind automation and cutesy graphics. It’s just you and the numbers. Ouch.
- You can be as detailed as you want. If you need to remember more than just the transaction basics, you can add notes to your transactions. Make note of vendor contact information, account numbers, or make notes for tax purposes.
- Data can’t be taken away from you. When you’re running a spreadsheet on your own machine and storing data on your own hard drive, it can’t be taken away if an app suddenly shuts down. While many apps will give you a chance to save your data before they shut down, some don’t. Having control of your data just makes good sense.
- Your data isn’t being aggregated and sold. If you’ve been using a free online app, chances are that your data has been sold in some way. Why else is the app free? When you’re storing data on your own machine, that isn’t possible.
- Ability to customize it to your needs. If you need a certain type of reporting or calculation, you can usually create it. No waiting for a developer, or figuring out workarounds. You can also link several sheets together, so you always have easy access to whatever you need.
- No subscription fees (for some programs). Many finance apps have moved to a monthly subscription program. Even programs that you used to buy and own forever have gone down the subscription road. However, there are many spreadsheet options without the annoying nickel-and-diming. (Sadly, Excel isn’t one of them.) Open source software, especially, uses the old model of download it, use it, and no subscription fees.
- Plenty of free/low-cost templates for beginners. Many programs come with a basic budget or net worth template built in and you can build it up from there. There are also plenty of free/cheap options available online that you can then customize to your needs. Etsy is a good source for low-cost templates, and you can often find some freebies on blogs or financial websites.
And here are the challenges
- Can be time-consuming to learn. They’ve improved over the years, but spreadsheet programs aren’t the most intuitive things on the planet. Fortunately, there are plenty of tutorials and templates to help you. (Back in the day, all we had was a …For Dummies book and whatever passed for online help.)
- Some use cloud storage. Some options, like Google, run in your web browser and store your data in the cloud. This isn’t the most secure option, and it leaves your data open to being aggregated and sold. For robust security, stick to options that install and run locally, password protect the document, and store your data on your own hard drive (with a backup, of course).
- A mistake can wreck your calculations. You have to be very careful when setting up or maintaining your spreadsheet. Any error in a formula can really screw things up. Commercial software occasionally has these problems, too, so it’s not a deal breaker. At least when the mistake is on your own spreadsheet, you can fix it quickly.
- You need a backup. If you’re not using cloud storage and an online app (and, really, you still need a backup because online services are not infallible), you need a backup plan. If you lose your computer or it breaks, you don’t want to lose your finances. This may mean spending some money on external hard drives or other solutions.
Of course, using paper and pencil leaves you even less vulnerable to a software vendor going out of business, but in today’s world it may be unwieldy. It’s harder to make projections and see the larger pictures with just a ledger. (Unless you really love math.) And, of course, it’s not secure if someone breaks into your home. (Unless you keep the documents in a safe.) However, if you can make it work for you, ledgers and a calculator still work very well. That’s the best hedge against software obsolescence. For everyone else, I recommend ditching all the fancy apps and falling in love with spreadsheets.
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