The Daily Money app

I’m using an app on my smartphone to track my expenses. I’m actually using it to track all my money (including bank accounts, investments etc), but you could also use it to just track your cash spending. For me, the big advantage of using a smartphone app is that I almost always have my phone with me, and that I can “jot down” my most recent purchase in a couple of seconds and be done with it.

The app I use, Daily Money, has only a few premade categories. You can add your own, as detailed or wide as you wish. (I would definitely recommend not tooo many categories, since that will cost a lot of time and will not result in much more useful data).

There are four different kind of categories. 1 income categories – this is the only place where money comes into the system. If you’re using the app only to track cash spending, I would make “getting new cash” (for example from the ATM) an income category. If you’re using it as I do, your salary counts, as does birthday money or profits/interest paid to you. 2 assets – these are the places where your money is stored. Your wallet is one of these (and perhaps the only one if you use the app to track spending). Others could be checking accounts, savings accounts, investment accounts etc. 3 liabilities – if you use your credit card, you are spending money and purchasing things, but you are not taking money from one of your assets immediately. Instead you are creating a debt on your credit card, and it will need to be paid later. In this category you store shortterm and longterm debts. A debt payment will mean money will go from an asset to a debt. 4 expense categories – this is where money leaves your possession and is spent. Hopefully on good things!

The app also always assumes no money comes out of nowhere or disappears. This is true. Even if you find money on the street, you can report it as “unexpected” or “miscellaneous” income. The moment you pick up that dollar bill and put it in your wallet, you should create a transaction of $1 from “unexpected income” to “wallet”, maybe with the added note “found it” or “lucky me”. If you lose a dollar bill from your pant pocket, or you can’t remember how you spent it, but you did, that goes from “wallet” to “misc expense”, maybe with the added note “I should pay more attention next time”.

This is the basis of this app. When you track all your spending, it will show you how much money you have left, and it will also tell you how much money went to what category of expenses, for example over the last month, or over the last year, or since you’ve started tracking it with this app. You can export data to a spreadsheet program and dive into it if you want to.

It doesn’t allow you to budget, it is not possible to set alarms (like “pay electricity bill”). There are probably other apps for that. There are probably lots of other apps that also track your expenses, but I think this is a good one. It is free. You probably need an hour to learn how it works (I hope reading this article helped) and to set up categories, but after that, it works pretty intuitively and quick. It never forgot a transaction I had put in. It does crash sometimes, especially when I switch from it to another app and then want to return to it, but even then it has stored all previously put-in information and I just need to restart it. Since February, I’ve only had to put about 3 transactions in the “miscellaneous, no idea where the money went” expense category, for a total value of about $15. Since February, I cannot lie to myself anymore about how much money I spend on snacks or on books, because it is all there, in my app. I believe that that is a good thing.

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