Introducing Decent Budget: my take on personal finances
Personal finances is a sensitive topic for many people. Not only because it’s a very individual thing, but it’s stressful too. There are multiple studies where people would identify money and personal finances as one of the most stressful things in their lives. Is it because we’re not happy with our income? If we were earning more, would our stress go away?
I think earning enough only solves half the problem. Other half that contributes to our anxiety is the state of the unknown. Would I be able to pay my bills next month? Can I survive if I lose my job? If I get sick, would I be able to manage my expenses? These questions are asked by many, and the only way to provide an answer is to do budgeting. Simply having money in a bank account doesn’t provide financial tranquility if you have no idea about your financial obligations and spending habits. To answer “can I afford this?” we need not only a number, but a context as well.
To provide myself the context—learn about my spending habits and do planning—I looked for a good budgeting software, but none of them really hit the spot. Some were too bloated with features, some had core pieces missing, and some focused on the wrong things.
This is why I built my own. I’m happy to present Decent Budget to the world.
Through much experimentation I formed a couple of ideas that Decent Budget was eventually built upon:
Doing manual work builds a habit better than automating. In today’s world, riddled with technology and innovation, automating generally seems to be considered as an improvement. I found that it has a detrimental effect on us as well: we tend to lose control when we assign work to the machine. When all transactions are filled for us, we don’t have enough reasons to open budgeting software and learn about our progress before our purchasing goes out of control. When we do the work every day, we can’t hide. Not only we will always know our financial state, we will reduce our impulse spendings as well.
Money should be used whenever needed most, regardless if it’s in budget or not. Life is unpredictable, and budgets should be compatible with that. If not, that leads to constant budget editing and eventual overspending, because changing budget every time there’s unexpected but essential expense is exhausting.
Comparison drives progress. I found that number has no meaning unless it’s compared with something. Learning that we spent €50.00 on Groceries so far does not tell us much, until we learn that last month, on exact same day, the amount was €60.00. Comparisons like these illuminates areas where we need to improve and impacts our decision process.
What Decent Budget offers
Budgeting in Decent Budget is built on “use last month’s income” principle. Every month, when you create a new budget, you use income that you gained last month. You will see your cash flow after budget which, if positive, means that after last month’s income and this month’s budget you gained money. The idea is to stay cash flow positive as frequently as possible.
To maintain positive cash flow, Decent Budget automatically splits your last month’s income when creating a budget. For every category you can either select a percent of income to use, or set a fixed amount. This way we barely need to do any work when creating a budget.
To stay on the budget, Decent Budget has something called “budgeted percentage”. In the simplest case, it tracks what percent of your total expenses were budgeted. But it goes further than that: if you had expenses outside your budget, you can offset spent amount and restore 100% by withdrawing funds from your budget. This way you can quickly restore balance between budgeted and unbudgeted expenses and make sure that you wouldn’t spend more than originally planned.
To improve your decisions, Decent Budget also compares information between different time frames. For example, in spendings you can compare specific category expenses this month with last month. Not only that, you can see how much have you spent last month on the same day. That would give you a hint whenever you spending money too quickly compared with last month.
Give it a try!
There are much more, but I encourage everyone to check it out themselves! You can try Decent Budget for free for 35 days, no strings attached. If you have any comments or suggestions, I’d love to hear them: you can contact me directly by clicking here.