Budgets and Technology

I just read someone else’s blog about saving and living on a budget etc. etc. It was the usual stuff about saving until it hurts, so that someday in the future you can spend freely. The article gets to the heart of the issue eventually………..it is crazy to save too much and end up leaving all your cash behind………..and it is equally crazy to over-spend and have to live off food-stamps during your retirement. What to do?

What the article missed, was all the new technology that can help solve the issue.

In the past, monitoring was difficult. I mean the actual tracking of spending was hard to do. (Not just the gut wrenching emotional meeting you know you will have with yourself at the end of the data capture – that is another issue entirely!).

I once carried around a steno-pad and entered every last dime I was spending. Down to buying gum. That let me know my burn rate, and I used it to size my monthly savings. When the paycheck hit – I would transfer away what I thought was an appropriate amount and force myself to live off the rest. Good but not great.

What I was missing, was whether this was appropriate or not.  I was missing a goal for all this saving.

Today, technology solves most of these issues. Firstly, tracking is easy – link up your bank accounts – make sure thinks are being coded correctly – and the steno-pad has been replaced. I mean this is really easy, and it is really important data to have.

Now, just link your spending and savings data to financial planning software, and Voila! You can see the long-term implications. Again, super easy from a technology standpoint, but there still is the emotional part that can/will scare many away.

So the point is…….technology has simplified an important and historically difficult task; tracking your spending. No need to over or under save. No need to “save until it hurts” – (unless that is what is required). However, technology has not solved the emotional piece.  For that you need to consult a human.