Why Traditional Budgeting Sucks, Is Annoying, Doesn’t Work, And How to Fix It

The envelope budgeting system most people are used to using makes you write down your monthly income and then list out all of your spending categories and what you spend on each one, per month. It also makes most people hate budgeting, and for good reason.

Here are some of my main problems with that system…

Who in the world spends on a monthly basis?

Do you get paid monthly? Do you do monthly groceries? Most of us get paid semi-monthly or bi-weekly, we may do groceries once a week, and have random one-off expenses here and there. A system that forces you to think in terms of monthly spending just isn’t natural.

Envelope budgeting is not very flexible.
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Triple Your Savings With These 3 Words From Tony Robbins

I’m a huge Tony Robbins fan. If you haven’t read Awaken the Giant Within, I urge you to make it a priority to read that book. If you’re familiar with Tony’s teachings you know and understand that more often than not we are our biggest obstacle.

Tony gives the example of people who are unlucky enough to be born into terrible environments and yet still manage to rise up and succeed, while so many others spend their lives blaming those environments for their lack of success. His point being that if our environment, whatever that is comprised of, is what determines whether or not we succeed, we wouldn’t be able to find examples of those who have overcome great challenges. Continue reading

Cents Are Now Supported!

When I first created Kualto, my wife and I made the decision that to make things simple, we wouldn’t support cents. After years of using the cash flow forecasting method to manage our expenses using a spreadsheet, we knew that if you just rounded your expenses up or down, in the end you would always be within $2 of your bank account’s actual balance.

So we instead provided a Balance Adjustment feature that allows you to adjust a week’s ending balance to make it match your bank account. That was enough for us.

Then we released our iPhone app and got the following review a month later.

We had completely forgotten about that decision we made a while ago. It made me wonder how many other users had decided not to continue using Kualto because it was lacking this feature.

So there you go. Cents are now supported thanks to this reviewer. If there are any features you wish we would add, make sure to send us an email. And don’t forget to rate our app in the App Store. Whether positive or negative, we appreciate the feedback.

Predict Negative Balances With This Chart

I’ve added a new report, called the Balance Report. With this you can see what your account balance is expected to be for any week up to 3 years in advance! You can avoid overdraft scenarios and predict any problems many months before they happen.

What’s cool about this is that it lets you quickly see what you can or can’t afford to spend on. If for example you were thinking about adding a new monthly bill, you can create that repeating transaction and then go look at this report to see what that new monthly bill would actually mean to your account balance months down the line.

You can also use it to see how much you can save. If you want to see if you can afford to save an extra $200 a month, create that repeating transaction and take look at your balance report. If you don’t see red, you are good to go!

Each bar in the chart represents the week’s ending balance. When you see a positive red bar, it means at some point during that week, your bank account balance will go negative, but it ends positive. If the red bar is negative (below the 0 line), it means your balance will end negative on that week.

If you want to see what’s going on in those future red weeks, you can click on them to be taken to the cash flow screen for that week so you can try to fix any issues. On the app or on the mobile site, you don’t click on the bars themselves. You click on the balances that are listed below the chart.

The iPhone App is Out!

The Kualto app is now available for iPhone. While we’ve had a mobile version of the site since the beginning, the app is faster and much more fun to use, and it does everything the website does.

Make sure to review the app if you use it. I appreciate any feedback, whether positive or negative.

Know Where Your Money Goes With This Chart

Personal Budget Reporting

Category Spending Reports are now available! You can select a date range in the past or the future, and see a break down of your expenses/income for each category. You also get a nice looking pie chart showing you each category’s percentage. It’s great to be able to see how much you plan to spend on each category for an entire year, for example.