By: Revanche

Review: HoneyMoney

May 18, 2018

I first heard of this money management tool called HoneyMoney from J. Money some while ago and it described a system that’s very similar to what I put together for ourselves.

It’s awesome that someone out there’s thinking along the same lines and providing this as a service for people who don’t want to have to re-invent the budgeting wheel. I signed up for a free 30-day trial of this service to see how close it comes to meeting my personal needfs and to share with you in case you’ve been looking for something like this. Let’s dive in…

STEP ONE: Entering accounts

This is all manual! I love that. My current system is all manual. I don’t want to link my accounts to any site for importing. Once upon a time, I loved Yodlee, and then it got old and crochety. I moved to Mint. That worked for a hot minute and then it stopped being useful.

It’s prone to connection errors. It’s prone to getting confused about the data. It keeps giving me “I can’t connect to MAKIN’ YOU BATTY account, please try logging in again to confirm your credentials.”

It’s all a waste of my time! Plus with all the data breaches, I don’t want any other institutions to have access to my account log ins anymore. I’m over it. Out with the account monitoring, in with the manual inputs!

STEP TWO: Creating envelopes

This felt non-intuitive at first. You’re asked to start with an emergency fund as an example:
Let’s create your first Envelope “Emergency Fund”. It will be one of your financial goals because you need to save money for emergencies.
Put 3 times your monthly net income into “need to save” field.

Mine is already well established sooo .. I wasn’t sure what to do instead. I rolled with it and opened the window to set a Goal.

That part was nice and easy, I could just set a goal number, goal date, and current balance. Since I’m very nearly at goal anyway, I set a goal for the end of the month.

Goal Created! Moving on to ….

STEP THREE: Tracking incomes / expenses / transfers

I added transactions into the calendar on this step and this mirrors how I enter planned expenses in my own personal spreadsheet. I do wish for slightly more flexibility in the repeating options. HoneyMoney has a lot of options! But I have weird needs, like the ability to repeat a transaction 2, 3, or 4 times for our Supplemental tax bill, or our insurance bills.

What it does have is an impressive array of “repeat every X” iterations: every 1-7 days, every workday, every weekend, 2 on 2 off, every 1-4 weeks, every 1, 1.5, 2, 3, 6 months, every year.

So while it doesn’t have the one thing I wanted but it has a whole lot of choices and the combination of “every 3 months” and “until August” meant that I could set the single transaction twice, close to the due date that I wanted.

I added our taxes, daycare, mortgage, upcoming credit card bills. Then I puzzled over how to add our regularly scheduled savings but decided to come back and add that after I explored the rest of the system.

Note: I think I added the expenses wrong, I was writing the name of the transaction in the Category / Subcategory text field. Must ask about that.

STEP FOUR: Math time!

This is a cute 3-part exercise to teach you to think in the Deficit / balance / Surplus method which I already do every day with my own system. (But because I was confused about what the whole screen was doing, I do what I always do and click randomly until the screen moves. Thus, I failed every math example. Truly, I’m not an idiot, I just look like one.)

I complete the tutorial and I think I’m being set free on the system?

Which is why I have this alarming warning that I don’t have enough in reserves?

There is definitely enough in my checking account for at least the rest of this month so this is probably a sign I have to figure out the categories so that the system isn’t classifying everything as HoneyMoney and nothing as Reserves.

The terminology confused me a bit. By my way of thinking, Reserves suggests the stash of cash I keep on the side to cover short months, not my cash flow. Not a dealbreaker.

QUESTIONS I HAD AT THIS POINT:

Q1. Under Accounts, should I be entering accounts like mortgage and auto loans? It looks like these should just be entered as recurring payments and accounts should only be assets?

Q2. All the accounts that I entered initially are being categorized as HoneyMoney but even though I have plenty in HoneyMoney, the system seems to insist that my expenditures should come out of my Reserves. Should I categorize some of my accounts as Reserves? How would I do that?

I dug into the FAQ and found my answers:

A1. Yes, loans of that magnitude should be recurring expenses. Great – easy! There are some options for how to treat different types of loans if you want them but I don’t care about those right now.

Related: the way HM treats your credit card payments made me laugh because it’s completely the opposite of how I handle it: Important! Paying off your credit card is not an expense. Your real expenses happened when you spent money from your credit card. Paying off the balance is returning borrowed money to the bank = transfer.

Don’t get me wrong, this is the smart way to look at credit card transactions to keep the spending real.

I’ve just grown away from tracking every single transaction, and mentally treat credit card purchases as if they were cash, and track them in my card statement. My personal system is reversed: treat each bill as a single transaction for bill-paying, but give each credit card a monthly budget so we’re not just spending willy-nilly.

A2. Imagine that you have $1,000 in your pocket right now. By default, all the money in all your accounts appear in the envelope named “HoneyMoney”.
So, you have $1,000 in your pocket and the same $1,000 in “HoneyMoney” envelope, and $0 in Reserves right now.
Tomorrow you planned to pay $500 for rent and also buy groceries ($100).
The app will calculate all your planned expenses and will tell you:
Hey, you need to RESERVE 500 + 100 = $600 in Reserves, but you have $0.
So you have a deficit of $600 in Reserves.
You will need to transfer $600 from “HoneyMoney” to Reserves.
And you will have:
HoneyMoney $400 — money for your unplanned expenses
Reserves $600 — money reserved for your planned expenses
And your Reserves will have optimal balance, meaning that it has enough money for all your planned expenses.

Basically HoneyMoney is currently my savings account that holds back up money for spending, and the Reserves are my checking account. Makes sense.

THINGS I LOVE:
The calendar view. This is what I manually created in my current budgeting spreadsheet but it doesn’t have the visual calendar that MoneyHoney has. I LOVE it.

The manual nature of the system. I know that sounds totally counterintuitive for a busy person but entering transactions manually is something that I already do in my current system because I like it and it keeps me on top of my money situation. I don’t want to set it and forget it – this is the safety valve for my finances.

THINGS I’D LIKE:
1. Accounts: The ability to change the HoneyMoney / Reserves terms to something more intuitive, or even just to switch the names around. To me, Reserves are what I draw on second, not first.

2. Accounts: The ability to categorize the non liquid accounts (brokerage and retirement accounts) separately from the cash flow accounts (checking and savings).

3. Setting up expenses: Instead of a long list of preset options, the ability to select the following options: Number of (days / weeks / months / years), repeating X number of times or until end date, or not repeating.

That would make it easier to easily customize recurring monthly or pesky twice a year four months apart payments.

4. Expenses: The ability to just pop into any part of the tutorial and back out again. Sometimes I can’t remember how to work some part of the system, it’d be great to be able to open any step of the tutorial that I wanted, and then exit back out of it once I saw the info I needed.

5. Transactions: The ability to change whether it’s an expense, income, transfer between accounts, or transfer between envelopes after it’s been set. I keep making silly mistakes and having to delete transactions instead of just editing them.

THINGS THAT WERE NOT INTUITIVE (but I figured it out):

1. Entering Income: This wasn’t specifically covered in the tutorial but by clicking on a day in my Calendar, and clicking on the dropdown menu where it originally said “expense”, I could select Income from the list and add our paychecks to the calendar.

2. Transactions are put into the calendar in two steps. First, clicking on a date brings up the dialogue, then you enter your expense or income as a “plan”. Then when the transaction goes through, you open the item again, click on “Enter” at the top, and click the “Enter” button at the bottom, which executes the item. The part I was having trouble with is that my expense was entered this way: $1,500. But the system can’t deal with that, so when I entered those expenses, nothing would happen. It turns out the comma was messing it all up – once they were removed, the system was calculating like a dream.

THINGS I HATE:

This was unexpected – or maybe should not have been a surprise since it so closely mirrors my own system. There wasn’t anything in here that I hated at all. I usually find at least three things I can’t stand about every money management system but HoneyMoney just had differences in preferences. While I’d LIKE certain things to be different, none of them are dealbreakers and didn’t get in the way of my getting the job done. Pleasant surprise!

CONCLUSIONS:

There was a bit of a learning curve, but that’s true of any system, and I didn’t delve deeply into the nuances of the various ways loans and debts can be handled because I don’t have debt outside of our mortgage but I know there are a handful of options for treating debt in the system. HoneyMoney’s a neat option for basic household money management.

One of the nice things about the system is that its founder, Ildar, is happy to make changes based on user feedback so if I felt strongly about any of the above stuff, I could send him an email and ask him to consider it for future development – and so could you!

GIVEAWAY

HoneyMoney’s founder generously agreed to give one of you lovely readers a free 12-month subscription as part of my compensation for doing this review.

If you’re not a winner, you can always sign up for a free 30-day trial to see if you like the system. If you prefer a more manual system, or if you don’t like using other automated services because of the connection problems, this could be a fit for you. Let me know if you try it and like it!

a Rafflecopter giveaway

Thanks to HoneyMoney for partnering on this post. I was compensated for my time exploring HoneyMoney and writing up my thoughts but all opinions, positive or negative, are honest and solely my own impressions. If you choose to use HoneyMoney, I may earn a commission. Note: I require compensation for my time because I’m pushing 2000 words here and my time is valuable but if I don’t think the product is worth trying, I won’t accept money to talk it up.

Ed’s Note (May 19): I explained a few things a bit badly so Ildar helped us out with clarifications below:

“Transactions are put into the calendar in two steps.”

It’s a bit more complex than that 🙂 If you click on today or a past day, then the “Enter” option is selected by default. If you click on the future date, then “Plan” is selected. If you click on the past planned transaction, then it’s “Enter”. Future planned transaction — “Plan”.

“Should I categorize some of my accounts as Reserves? How would I do that?”

Accounts and Envelopes are not directly related. The only thing that connects them is that the total balance of all Accounts equals the total balance of all Envelopes. Total of Accounts = Total of Envelopes (eg, HoneyMoney + Reserves + Goals + Funds)

By default, all money from all accounts appears in “HoneyMoney” envelope. Then the system runs a forecast and says how much needs to be “reserved” in Reserves for future planned expenses.

All the planning is cashflow-based (“Reserves” envelope forecast). The system assumes that all planned expenses come from Reserves, and all planned incomes appear in Reserves. Then it makes a forecast (deficit/surplus/optimal sum)

“The ability to categorize the non liquid accounts (brokerage and retirement accounts) separately from the cash flow accounts (checking and savings).”

I don’t cover it in the tutorial because it’s a more advanced feature, but it’s called “budget” and “off-budget” accounts in the system.

Ed’s Note (May 21): Take a look at the demo if you’re not ready to dive into the free trial yet: https://demo.honeymoney.io

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