Hidy Ho (Math) Campers!

As a result of the problems identified in my previous article with Mint.com’s annual “Net Savings Over Time” report, I decided to nerd out on money tracking again. Apologies to those of you who don’t enjoy these articles as much as some of my others. However, much like Darrow Kirkpatrick did with retirement calculators, I believe it’s important to understand the pluses and minuses associated with popular money tracking software. This is especially crucial considering the importance I place on tracking money, to begin with.

I spent several days prior to writing this article improving the fidelity of my data in my Mint.com account. I also rebuilt my entire 2017 financial year in Quicken. Doing so allowed me to total my net savings for the year in Quicken and verify if I made any mistakes with my Mint calculations.

To refresh everyone’s memory, when I initially ran Grumpus Familias’s net savings for 2017 through Mint as part of my annual end of year fiscal review, it reported we saved $70.5K. However, I didn’t trust that number due to my inability to verify whether or not Mint accounted for our annual Roth IRA transfer. The program, as far I could tell, didn’t allow for that determination. After spending a few days double checking entries, modifying several transaction labels, and re-displaying reports; Mint now shows an annual net savings of $69.5K. Obviously, I had approximately $1K of transactions mislabeled in my previous report. However, I still cannot verify exactly how Mint determines expenses and income for this report. As a result, I don’t trust this number any more than the previous one.

Quicken tells a different story. After reconstructing the year, the “Cash Flow” report shows that my family’s total net savings for 2017 (excluding investment income) was approximately $56K. This is prior to the Roth transfers. After subtracting our $11K of Roth, annual net cash savings fell to approximately $45K. This total is way short of my $66.5K goal whose importance I chronicled in Track Your Money Part 3. On the plus side everything in Quicken is modifiable, so the user gets to determine what is, or isn’t, included in the report. As a result, I trust this number, as I know exactly what data it represents.

My Saving’s Grace

What does that $45K net savings (after Roth contributions) tell me? First, it tells me the Passive Money Tracking Experiment was mostly a failure. I say “mostly a failure” rather than “a complete failure” because once I compared my net savings from 2016 to 2017 in Quicken, the totals appeared almost equal. Of course, I had to adjust for the unintentionally deferred income from 2016 that made its way into 2017 (again mentioned in the previous article).

Therefore, a bit of good news is that Grumpus Familias didn’t necessarily spend any more in 2017 than we did in 2016. That was achieved without tracking the spending nearly as closely as the previous 18 years. Maybe I can still find time to blog after all?

One other positive result of the experiment was the realization that as long as I had the data, it was rather easy to quickly manipulate and segregate it into large categories using Quicken. It only took me a day to reconstruct an entire year accurately enough to make my calculations. Thus, if I’m willing to forego the detailed insight that sub-categorizing provides, I could get away with less work. Maybe if I did this on a monthly basis, it might only take a few hours? Regardless, although not necessarily intentional, it was prudent of me to download the Quicken data routinely … even if I was not using it actively at the time.

Good job Grumpus! You totally did something worthwhile without even thinking about it. Maybe I should think less more often.

Corrective Action

Let’s be honest though, those silver linings aside, my family and I came nowhere close to hitting our savings goal. Even if I count the $11K contribution to our Roth IRAs, we still fell $10K short. We missed our target by approximately 15%. A grade of 85% might earn a pass in school, but it won’t get me to retirement within my four-year timeline … which is actually three years, now that I think about it. I need to fill that savings shortfall quickly and permanently for the next three years if I don’t want to find myself serving in the military longer than intended.

LOL! I’ve made it sound like a prison sentence. It’s not that bad… but then again, serving longer would not be ideal for my mental state. I’m ready to move on. As a result, I’ll probably stop contributing to the Roth IRAs. Contributions from here until retirement are not crucial to the success of my retirement plan. Amassing the cash to either pay off our current mortgage or sell our old house and buy a new one in cash, is crucial to the plan though. Stopping IRA contributions is an easy big win to get us closer to our $66.5K annual savings goal.

Clamping down (further) on spending is also a must. As you will see from my analysis of Mint’s issues below, I was using a flawed tool, and a flawed report within that tool, to provide my monthly savings numbers during my passive tracking money experiment in 2017. This means monthly spending was probably more than it should’ve been. Thus, more frequent updates of Quicken, and whatever online application I continue to use, in conjunction with closer scrutiny of monthly spending is a must.

After those actions, I’ll have to carefully consider what else I’d be willing to do to either increase income or cut spending. I don’t want to act too rash. There are one or two major shortcuts I could take (totally legal by the way), but they’re not the type to be taken lightly. In the meantime let’s turn our attention to what I discovered about Mint while working on this and the previous article.

Mint.com’s Failures

For those money tracking nerds like me who are interested, I think I figured out what Mint.com’s “Net Income Over Time” report did to make my annual net savings appear so inflated.

First, the report includes interest income. When I drilled down into the monthly income data in the “Net Income Over Time” report, I saw interest payments from my various CDs and high yield (at a blistering 1.2%) savings accounts. In other words, I could see those interest payments as line items in the monthly income ledger. Those payments accounted for over $1K in income this year.

Second, and more importantly, Mint.com appears to count dividends from investments as income, but not long-term capital gains. I can’t verify that suspicion completely because when I drill down into the monthly income data; dividends don’t show up on the ledger. However, when I run the math, the difference between Mint.com’s “Net Income Over Time” total for 2017 (the $70.5K mentioned in my previous article) and Quicken’s total of $56K (which I told Quicken to calculate without counting dividends or interest) was approximately $14.5K. Keep that total in mind.

Next, when I looked at my Quicken “Investment Income” report for 2017. It told me I earned approx $13K in taxable dividend income. Add that $13K to the over $1K in interest from my bank accounts, and we are close to making up that $14.5K difference. What accounts for the remaining discrepancies between the totals after that is anyone’s guess.

I suspect some inaccurate data labeling in my Mint.com ledgers may have contributed; especially among my dividend transactions in my Investment accounts. I cannot verify that though because apparently, the well-advertised glitchiness of Mint’s “Investment” tab extends to the transactions in the investment accounts themselves. I spent two days trying to accurately re-label many of the transactions in my investment accounts only to get error after error stating the server is unreachable. Labeling transactions in Mint for my other accounts don’t seem to prompt that error, so I’m not sure what is going on.

The Real Problem With Mint

I really wanted to like Mint.com. In fact, there are still a lot of features I like about it. Ease of use of the mobile app is one of them. Even Mrs. Grumpus got on-board with using Mint this year for tracking her cash transactions. That was a pretty big win.

However, there’s a lot to dislike about Mint as well. As noted in my previous article, I’ve had enough of Mint counting the same accounts multiple times and falsely inflating my net worth. Deleting the duplicate accounts isn’t straightforward either.

Yet, the reliability problems with the “Net Income Over Time” report are an absolute deal breaker for me. It’s the one report I need in order to accurately assess the status of my savings efforts for retirement each month. I presume others need it to provide accurate data as well.

Unfortunately, “Net Income Over Time” is by far the weakest report under the “Trends” tab too. While several reports like “Spending” and “Income” allow a decent amount of filtering by time, category, merchant, and account; “Net Income Over Time” only filters for time. This is why I resorted to Quicken in order to determine if my doubts about my net savings as reported by Mint were justified. Turns out they were.

The simple solution would be for Intuit to add some more filters to this report. If I could’ve filtered for dividends, interest payments, or accounts I would’ve figured out why my net savings appeared so high. Frustratingly, Intuit used to own Quicken, so they most definitely understand how to build filters and the importance of accurate reporting. I intend to write Intuit to see what they say about this problem. I’ll update everyone if I get a response.

Conclusion

Here’s my takeaway from all this. If you’re relying on Mint’s “Net Income Over Time” report like I was to show how much you’re saving on a monthly basis, be aware that it reports dividend income without showing it to you on the ledger. In fact, there is no easy way to determine what is or isn’t counted as income, and currently, no way to modify it. I know a large segment of Mint users probably don’t bother connecting their investment accounts to Mint due to its well-advertised weaknesses. For those like me that do though, just keep the above issues in mind.

That assumes that you aren’t ready to fully shift to another software platform like Quicken or Personal Capital full time. I am at that crossroads now. I’ll probably keep my Mint account since Mrs. Grumpus is now using Mint regularly to input her expenses, but will only use it to check her inputs and replicate them into Quicken. From here on out, I’m going back to Quicken as my main money tracking tool. As obtuse as it can be to use sometimes, there’s no competing with its power or reporting tools.

In the meantime, I plan to put more emphasis on Personal Capital (PC). The first step will be to rebuild the portion of 2017 for which I have data, much like I did with Quicken. The second step will be to update PC on whatever monthly basis I decide to update my Quicken. Since I only started using PC in May 2017, I will continue to update PC until this May in order to gain a year’s worth of tracked data. This will allow for a thorough comparison between it and Quicken. If it’s reporting features survive my scrutiny, then I’ll make the family switch over at that point as the online money tracking platform of choice. If it doesn’t survive my scrutiny, then who knows what. We’ll figure something out.

As for the retirement plan, it may be time for a revision. Saving $66.5K a year was an aggressive goal. It may not be realistic in the end. “More to follow” as we say in the military. I will of course update as I figure all of this out.