The “Commingled Purchase” Problem That Budget Apps Don’t Warn You About
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What is the main topic discussed in this episode?
Hey Elizabeth, what is your biggest hurdle when it comes to tracking your expenses?
I don't want to blame it on my ADHD, but my ADHD.
You know, I'm right there with you. But fortunately, there are lots of budgeting apps that try to make this easy for you, although sometimes it's a little bit more difficult when the rubber actually hits the road with these apps. Welcome to NerdWallet's Smart Money Podcast, where you send us your money questions and we answer them with the help of our genius nerds. I'm Sean Piles.
And I'm Elizabeth Ayola. This episode, we're going to be exploring how to actually make budgeting apps track your expenses. And here's our listener's question, which comes from a text message. Hey, nerds. Tools such as Monarch, YNAB, et cetera, are great for creating a budget. However, for years, I've struggled to actually track expenses against that budget. A big reason for this is many of my family's expenses come from big box stores like Costco, Target, Walmart, Amazon, etc. that consistently involve commingling purchases of groceries, clothing, toys, and other budget categories. Any suggestions on how to accurately split these changes to get an accurate picture of spending? The only way I have discovered around this is to log itemized receipts by hand, which becomes extremely cumbersome and often leads to abandoning the budget.
Thanks.
I can relate to any administrative hurdle leaving me to quickly abandon my budgeting. So I'm right there with you, listener. So to help us answer this listener's question, we are joined by personal finance nerd Amanda Barroso. Hey, Amanda, welcome back to Smart Money.
Hey, y'all, listen, I just went to Target the other day and my receipt was exactly what this listener is talking about. It was like bluey rain boots, baby wash, some hummus. I mean, like it had it all.
What, those aren't all needs? What do you mean? The bluey rain boots are really important.
Oh, my gosh. Listen, well, we're flying to New Jersey next week and it's going to be snow on the ground. And this is as close as I can find to snow boots here in Atlanta. So blue rainbows it is. But this is, I think, a really common issue. I'm so glad we got this question.
Yeah, I mean, this question really gets to some of the practical, really tactical issues of using budgeting apps. How do you sort out your expenses when you have so many, maybe within one single purchase? Because especially when you are going to a Target or going to a Costco, you might have different categories in one single spend, like our listener described, like When I go to Costco, I'm getting myself a really nice rotisserie chicken for dinner. But then there's always some viral product that I want to get. Like, did you guys see that gigantic jar of peaches?
How can budgeting apps handle commingled purchases?
No. Do you guys know what I'm talking about? I did. I did. My algorithm is full of random crap from Costco and people buying them. So with this jar of peaches, the whole gimmick was that there was one woman in one video who spent maybe five minutes trying to get the peach out of the jar because she It just wasn't designed to actually get the peaches out, I guess. And then when you eat it, it's a whole entire peach with the pit in it. So eating it is a mess, but I still did it for the novelty of it. And to me in the moment that felt like a need because I love peaches. But in retrospect, that was probably more of a want. I would have categorized that a little bit differently. That's all to say, it's hard to sort these things out in the moment.
So Amanda, what do you think is maybe a good place to start when categorizing these different purchases when using budgeting apps? I mean, I would hope that some apps... that have a functionality where you could split purchases in one purchase into different categories? I mean, I imagine it depends on the app that you're using.
Absolutely. So I reached out to folks at Monarch, the folks at YNAB and EveryDollar, and I asked them directly, just like, hey, how do your apps address this issue? I spoke with the head of product marketing at Monarch.
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