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Financial

Why I closed my Mint and Personal Capital accounts

In this past week, I closed both my Mint and Personal Capital accounts. I had thought of keeping those accounts, but a few annoyances pushed me over the edge.

Personal Capital

  • You can’t hide an account that is now “closed”. If you delete that account, you lose all of its history. This meant I had a bunch of accounts still showing up on my account list, with red exclamation marks, with nothing I can do about it.
  • Every time I synced my main bank account, I was forced to enter in my two-factor authentication code. Frustrating when I wanted to quickly look at the “state of the world.”
  • I’m not too impressed with their investment tools, which is supposed to be their defining feature. I actually found it difficult to track how my investment accounts were doing over time and what balance increases were contributions vs. actual gains.

Mint

  • Mint has an incredibly annoying bug where Fidelity 401k accounts essentially double their account balance, with this additional amount showing up in the investment reports as “cash.” Mint acknowledged this bug but says they cannot provide any timeframe for an fix. You would think one of if not the largest 401k providers would be high on their priority list.
  • Investment tracking is incredibly poor. I can’t find a YTD status.
  • Their interface always feels slow and heavy.

As replacements, I continue to use YNAB for all things budgeting and I have built several spreadsheets for tracking Net Worth, Retirement Contributions, and other related stuff. In sort, I replaced Mint and Personal Capital with slightly manual but 100% in my control processes.

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Financial

When Personal Finances Gets Boring

A funny thing has happened since we paid off our last car and a credit card with some medical bills on it: personal finances has gotten a bit boring. Actually, this has been a trend for awhile, but it’s gotten much more evident in these past couple of weeks.

With YNAB, I’m always budgeted a month a head of time, relying on last month’s paycheck to pay this month’s bills. I wake up every morning, shower, get ready, sit down at the kitchen table with my laptop and an OJ in hand. Quickly visiting the various accounts I have, I scan for anything unexpected and download the latest set of transactions to import into YNAB. Since every receipt I have is already entered into YNAB, it’s usually as quick as approving matches for the transactions. Double-check budget categories to ensure we’re on track for the month. Close laptop.

Less than 10 minutes to complete my daily financial check. When a new month arrives, I spend maybe 30 minutes updating some tracking spreadsheets. Done.

The past 8 months I have spent building up YNAB, various spreadsheets I use to track things like retirement contributions and Net Worth. Now, that groundwork has done. Our non-mortgage debt is almost gone outside of a few remaining student loans with small monthly payments.

It’s now about patience.

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Financial

The Personal Finance Renaissance of 2014

Looking back, I’m certain that I will view as 2014 the banner year for my personal finances, after years of half hearted attempts at paying off debt and trying to figure out how to save for retirement properly. What did I do differently this year from years past?

The Early Years

The education system here in the United States does an unbelievable poor job teaching personal finances. I never once took a class that explained how to balance a checkbook, how retirement investing works, and how bad debt can be.

I remember taking my first job out of college, in 2004, and the 401k advisor for the company I worked for commenting about how great it was for me to be starting a 401k at the age of 22. Yet I felt so incredibly inadequate at preparing for my retirement. All I knew is that I should start a 401k. No one taught me how to actually manage it.

When I received my first student loan bills six months after graduating from college, I nearly collapsed. How could I afford this? Yet, I continued to go about personal finances blind.

Looking back, it is no wonder that college debt is so crippling in society today and that I see so many people barely getting by. None of us were taught how to do personal finance right.

The First Awakening

As early as 2008 I had decided that I was sick of barely getting by with our massive student loan debt. I had just married my wife and we had just bought a condo. I began listening to a Dave Ramsey audiobook during my commute to/from work every day. Dave Ramsey was the first person to explain to me how crippling debt really was. I was hooked.

I built a $1,000 emergency fund and immediately made a commitment to pay off our credit cards and stop carrying a balance from month to month. That success then translated to me paying off my smallest college loan that totaled up a $1,000. While there was no win from an interest perspective (the loan had a 0% interest rate), it as a huge psychological boost for me. One less monthly payment, one less sword hanging above me.

But there were aspects of Dave Ramsey’s philosophy that didn’t seem to match reality. $1,000 emergency fund seemed very light in hindsight. Also his investment advice seemed like garbage, not explaining how you get the mythical 12% return on a mutual fund.

Building breathing room & stupid mistakes

The easy debt was quickly paid off, but the larger debts were still a problem. And old habits returned: after paying off our cars in early 2009, those cars immediately had major problems within the next year and had to be replaced. Suddenly two more loans, for brand new cars, were on the books. Then in late 2011, we bought a house (with a larger mortgage!) that in hind sight we were much too early buying.

I made another stupid mistake during this time: whole life insurance. And just as worse, I transferred my rollover IRA from Vanguard (!) to this life insurance company as well, under the promise their financial advisor would ensure my investments grew. Stupid, stupid mistake in hindsight.

But we kept at the debt payoff march, thanks to some very timely improvements in our income. The college loan I absolutely hated, a private loan at Sallie Mae, was finally paid off in 2013 alongside one of our cars. Our monthly cash flow kept improving thanks to our careers progressing and these debts slowly going away, but I knew we could do far better and I still had zero clue about how to manage my retirement investments properly.

2014: The Year of YNAB and Index funds

In early 2014, I began diving into research on how to improve our financial situation more. This lead to two major changes about how we handled our finances.

The first was the discovery of software called You Need A Budget (YNAB). YNAB transformed how I did our family budget. Instead of throwing guesses into a budget spreadsheet, I now tracked every penny. Instead of using credit card float and juggling payment dates on bills to ensure I paid the bills (barely) on time, I now use last month’s income when paying this month’s bills, removing all worry. Some major lifestyle issues were found (such as going out to eat way too much) that we now could fix.

Spending plummeted, savings rates improved, and suddenly we were making much faster progress on our debt and retirement savings. All because of a $60 program that finally made budgeting easy to understand and follow. It’s already paid for itself several times over.

The second was the discovery of the Boglehead philosophy for investing. The idea of using simple index funds with low expenses captivated me. After years of uncertainty about how to invest my retirement savings properly without any guidance, I now had a template for how and why. Most importantly, I knew I could put together the plan myself. Investing is possible for us normal people. There is no need for a financial advisor. There is no need to change funds every couple of months. Set and forget.

So I revamped our retirement investments. Luckily my wife and I’s 401ks both had low expense index funds available. I moved my IRA back to Vanguard and killed the whole life insurance debacle. I more than doubled our retirement contributions. Combined with a solid market in 2014 and I gained a ton of confidence as the year progressed.

Stress Free Finances?

So the big question is, has all of this made our finances stress free? Have we made progress?

Knowledge is a double-edge sword. Before, I was ignorant and did not know what I didn’t know. Now, I’m sometimes scared at the large numbers needed to accomplish my family’s goals. I’m in some ways surprised and some ways not about how little the experts know about investing. Anyone who claims they can predict the future is almost certainty wrong. Stuff like that makes me a lot more stressed about certain things.

But, now I know a lot more and certainly more aware of what I don’t know. 2014 was basically learning about how to manage risk. This has made many aspects of my finances a lot less worrisome, especially since I learned at a still young age. Now that my finances are more or less set, I am focusing on many small but important things, such as documenting all of our important information and preparing for worst case scenarios, instead of trying to survive each day.

What’s next?

Yesterday, I upped my 401k contribution by another 1%, edging us very close to maxing my 401k in 2015.

Tomorrow, on New Year’s Day 2015, we are going to send a large payment to a 0% interest credit card to pay off the card and a medical bill from 2014. Why tomorrow? So I don’t throw the YNAB books off, since this money comes from our January budget.

On February 1st, my wife and I are likely to submit the last payment for her car, which will hopefully be the last car we ever have to finance via a loan. Between the credit card being paid off and the car, a massive increase in cash flow will happen.

By May, we hope to have six months of living expenses saved in an Emergency Fund.

We will then turn our attention to our last two student loans, hoping to have both paid off by late 2015, further improving our cash flow. By then, we also expect to be maxing out at least my 401k.

I hope on December 31, 2015, I will have lots of good news to share.

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Financial

YNAB: Cleaning up downloaded OFX and QFX files with Hazel

With You Need A Budget (YNAB), you can import a QFX or OFX file from your bank to help reconcile your transactions. However if you are like me, you probably now have a bunch of stray QFX or OFX files hanging around in your download folder. After this list reached 50 files recently, it made me wonder…could I use Hazel to automate cleanup of this folder so I don’t have to worry about it myself?

The answer is yes. A simple rule with two conditions are all that’s needed.

Hazel with OFX rule

This Hazel rule is simply matching whether the extension is a OFX file and whether the date added to my computer is not today. If both match, the file is moved to the trash. I have a similar rule for QFX files. Since I never use the QFX or OFX files after the day I download them, there is incredibly low risk with this rule. And one more bit of my computer life automated.

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Financial

YNAB: One month in

Almost a month ago I began using You Need A Budget, a financial app that is designed to help people with creating budgets and sticking with them. The goal is to help you get spending under control. As I approach the one month mark, I can say it has been a success so far.

The best part about YNAB is something that will seem odd: being required to enter in every transaction it happens. Sure it seems tedious, especially in this age of Mint, Personal Capital, and other apps that automatically download transactions and aggregate the data for you. Yet, it makes you pause before the transaction and make you think about the consequences of the transaction. Should I really go to Dunkin Donuts this morning instead of making my own breakfast? Why is my grocery bill so high? Yikes that loan takes a bite out of the budget.

Being a month in, I haven’t successfully created a full buffer yet. But I have organized my emergency fund and savings account, have all of my Pre-YNAB debt paid off, and have (I think) made significant progress in watching my spending. It’s a start, but it’s a great start.