This week personal finance blogger Andy writes the second of his blog post series on using Money Dashboard to help in his quest to retire early!
Introducing FIRE starter
My name is Andy and I write a blog called theFIREstarter. My aim in life is to retire early and blog about some of the ways you can start saving towards a goal like mine. Whether you want to pay off your student loans or save up for a car, saving money can be really hard.
If you have the right tools, such as a free budget planner like Money Dashboard, and a little bit of will power along with a bit of a plan then you can definitely start saving a bit more without giving up too much of the things you may have grown accustomed to.
Saving with Money Dashboard
I discovered Money Dashboard about a year ago and was instantly hooked, and it has no doubt helped us get our spending in check, which is key to attaining FI (Financial Independence). Over the next few weeks I'll be chatting through my favourite Money Dashboard features that can help us save more and spend less. I've already blogged about Aggregating your accounts which is a good place to start if you haven't yet got to grips with this.
This week I'll be talking through the 'Tagging' feature which can help in your quest to retire early or simply save money more effectively. Let's go!
Bring on the tag
The tagging system makes things so easy to put your spending into different categories, which is key to seeing where your money is going. If you want to keep to a tight budget then you need to check in regularly to tag up any untagged spend and see where you are at - weekly should do it, it works for us. We don't rock a budget as such but just check what we've spent each week and month and try to get better the next month.
This is certainly not SMART goal setting in action but it works for us, and our overall spend is trending in the downwards direction.
I think just seeing what you are spending each month, while having an agreed upon financial goal/agreed upon financial goal with your significant other to get your spending in check is a big enough motivator for most people, but if you would rather create a budget and stick to it then Money Dashboard also has a new feature for that called the "Spend Tracker". It is available on Desktop and will be available in the release of the new Money Dashboard app soon.
You can put in limits for each spend category and check back to see when you are near the limit and if you need to adjust it.
Anyway, back to the tagging system!
You can tag from the main dashboard but I prefer to go straight to the "transactions" page, to get a larger view of what's going on. You can then filter out all untagged transactions so you are only viewing those, and then click on where it says "Untagged". This will bring up a menu with Categories, hover over one (e.g. "Home and Garden") and sub categories appear, when you click on one of those (e.g. "Home Electronics") your spend is tagged.
A much quicker way to do this is once you click on the untagged item you can just start typing, e.g. type "Home" and everything to do with home appears, including Home electronics, which you can just select straight away. You can go back and retag anything at anytime as well so don't worry if you tag your spend with the wrong thing!
Top tagging tips
A few further tagging tips to keep in mind...
- There is an auto tagging system which gets 90% of things correct, but it is worth casting a quick eye over the previous weeks' transactions just to double check
- Remember to tag cash withdrawals as actual spend categories as quickly as possible, otherwise you won't remember where all that cash went at the end of the month!
- There is a split transaction function which helps with cash withdrawals and other situations.
- With this quick and easy tagging system it takes us 10 minutes per week to get everything tagged up, we try to do it on a Wednesday night as Money Dashboard send their weekly update email on a Thursday :)
Talk to me
Now that you have read my first post, I would love if you took a look at Money Dashboard and see if you can use some of my tips above. Tweet me @TFSRetireEarly and @MoneyDashboard with your top tips or questions on your quest to an early retirement or just about saving money in general.