Financial Update Update

So, this isn't actually an update on our finances.  It's an update on how, every month, I give my husband a "financial update".  

I do this because budgets and goals and such seem to have very little effect on him; there are a lot of ways in which my husband is just as much subject to the vagaries of ADHD as my sons are.  So he'll say, "yes; we should certainly set aside money for X", but the next day he'll go spend a pile of money on Y, "because Y was on sale".  

But if forward thinking doesn't seem to sink in, constant feedback does.  For years, we've been sitting down together at the end of the month and I'll show him, "This is where our money went this month.  We gave this much to charity; we spent that much on child care; and then this many thousands disappeared into your credit card and cash."  Then I give a little "here's what I think is coming down the pike" speech, and I put away the spreadsheet until next month.

Last year, I wrote a post about our spending being "out of control", meaning that I don't in any way control my husband's spending.  In particular, I wrote about how I know what checks I pay, . . . 

. . . but a full 51% of the money that left our checking accounts was either via cash or credit card. And where that money went -- well, that's just a Big Mystery to me. The majority of our spending is a giant gray hole.

For some reason, that post struck a chord with my husband.  And this past summer, he decided that he'd start categorizing his credit card expenses in Mint.  And that's what I'm going to write about now: about using Mint to help understand where our money goes.

First of all, I'll mention a couple of huge drawbacks to using Mint as our primary financial feedback tool.

• Mint can't "see" any of my credit union accounts, so the majority of the bills that I pay and donations that I make never find their way into Mint.  And since I like my credit union more than I like Mint, I mostly keep track of finances via my own excel spreadsheet.
• If I want to do an update on "what we spent this month", Mint is out-of-synch.  For example, I'll say, "on March 17th, we paid your credit card bill of $3000".  But the purchases on that credit card bill were from January and February.  So there's this odd phase-lag when I say, "your credit card bill was really high this month" or "was really low this month", but my husband is thinking, "that's funny, because I haven't bought much" or "but I've just bought all those plane tickets for editors!".
  
  (Below I'll talk about why this lag isn't really all that important in the long run, but we definitely have to take the phase lag into account during our update sessions).
• Mint can't split a transaction.  If we spent $100 at a store, and $30 of that was for home repair while $70 of that was kid's clothes, we have to categorize it as all one lump category:  all kid's clothes, for example.  So there's a lot of error built into any analysis.

• Edit:   Daryl, in the comments below, notes that splitting transactions is possible, we just couldn't figure it out until now.  Thanks, Daryl!

• Mint does its best to guess categories, but it often guesses wrong.  If you look at our yearly credit-card spending, Mint says we spent $12,697 for "Food & Dining".  Craziness!  If you look more closely, though, you'll see that huge amount includes things like "Amtrak: $106.00", "Holiday Inn: $294.96".   In other words, Mint guessed wrong a lot of the time.
  
  (During the last three months of 2015,  when my husband actually started going through his transactions and categorizing them more carefully, "Food & Dining" expenses were only $1353 for three months, less than our charitable donations, less than my husband's "entertainment" spending, and less than our reimbursed business expenses). 
• The categories it chooses to lump together are not the categories we'd choose to lump together.  Case in point: we think exercise is fun, and belongs in the "entertainment" section, but Mint puts it into "health and fitness", alongside all of our family's medical expenses.  WRONG!  So my husband now has created a "bike" subcategory under "entertainment".  Also, his textbooks are "entertainment".  Actually, we declared that anything he spends for himself (not on the kids, not on household supplies) is "entertainment".  So there.  

All that said, there are a lot of cool things about Mint that my husband and I like, for probably quite different reasons.  One thing we both like are these cool "trend" graphs, that break down our credit card spending into various categories where we can compare them visually.

Mint's breakdown of our credit-card-purchased "trends" for the past 6 months,
with a LOT of error mixed into the analysis.

I like having all of our accounts (all except, alas, the credit union) visible in one place, so I can freak out (or not) about the impending credit card bills and simultaneously see how our investments are doing (purely voyeurism, because we're basically on autopilot with those right now).

My husband likes the spreadsheet and tracking aspect of this.  He's kind of a competitive guy, and for all his impulsivity when it comes to future events, he's sort of a maniac about tracking what he's done in the past.  He has spreadsheets of his bike mileage since he started riding, spreadsheets listing the 40 vehicles he's owned, spreadsheets of books he's read, and even spreadsheets of his broken bones.  Hence, categorizing things in Mint has a certain appeal for him.

And for me, I'm loving the feedback loop.  Even though there IS a phase lag between buying things and paying for them, in the long run, trends begin to appear.  My husband's credit card bills are starting to come down into a range that causes me a bit less hyperventilation.  He's much less likely to tell me, "but this was a special expense because . . . ", since he's realizing through his own work that special expenses happen basically every month.  

So the financial updates continue, and now it's even more of a team effort.  Happy 2016!