Whenever I try to manage my budgets from within a personal money management apps like Mint (RIP) or Rocket Money, I am unsure how to account for expenditures that are not truly my expenditures. I'm curious to know how others handle situations like this.
Examples:
- company Travel expenditures: Whenever I am on company travel and need to rent a car, I am required to put the expense on my own card and fill out an expense report to get reimbursed. The problem is the personal money management tools I use pull in the charge as my own and count against my monthly financial plan. So suddenly I have a $1,600 charge against my $150 “Auto and Transport” financial plan. Then when I get paid back, my holdings jump up by $1,600.
- Group Dinners: If I put my card down at a group dinner, I could end up with a $300 charge against my “food/dinning” financial plan and multiple small transactions posted to my holdings that will be counted as “earnings” by most apps.
I realize that there is an option within Rocket Money (the app I am using now) to hide these transactions from the financial plan/net worth calculations, but that requires me to manually adjust each transaction. Depending on transaction volume, this could be time-consuming and needs to be done regularly to avoid falling behind.
I am wondering if anyone has any better methods for handling these types of situations.
Here’s a few questions:
- How do you manage your budgets and ensure they stay accurate?
- If you ignore transactions in your budgets, how often do you review them, and how much time does it take?
- Is there a better process then the one I am doing?
I use a spreadsheet for budgeting
and separate budget categories for personal and business expenses
My budget report has three categories in the + section;
*Income, Savings, Business*
By default, my expenses are balanced against *Income*
I have the option of tagging expenses for balancing against *Savings*, or *Business*
The business reimbursement is also tagged as *Business*
Reimbursements are tricky. I come from a Zero Based Budgeting world so this might look a little different. This would apply to apps like YNAB, MyBudgetCoach, EveryDollar, etc.
We have a category in our budget called Reimbursements. You can have multiple if you want, like Work Reimbursements and Friend Reimbursements, etc.
When we spend for something we’ll be paid back for it comes out of that category. We cover that spending because technically until we get the money back we are out that much. And then when we get it back we put it back into that category which frees up that amount to be moved elsewhere.
You can also just categorize both sides in the same category. Like if you pay for a friend’s dinner you can put that in “Eating Out” and then put the reimbursement in Eating Out as well. I don’t like this as much because:
1) It’s harder to remember which all categories have reimbursements in them I’m waiting on.
2) This skews your reports data which will say you spent more on Eating Out than you really did.
I’m not sure the best way to handle this in Rocket Money but I’d imagine these two approaches would be possible.
Best of luck and let me know if I need to clarify anything.