Moving from a budgeting spreadsheet to an app

A budgeting spreadsheet is free, fully yours and as flexible as you care to make it, and plenty of people run one happily for years. An app earns its place when keeping the spreadsheet correct becomes the work: the per-payday maths, the record of what has actually been set aside, and a check that the bills account will cover what is coming. Switching mostly means re-entering your list of bills, not your history.

I should say where I'm coming from. EachPayday started as my own budget, a spreadsheet that grew into a page I built for my own fortnightly pay, so I've lived on both sides of this. For a lot of people a spreadsheet is a good answer. This post tries to be clear about where it stops being one.

What does a budgeting spreadsheet do well?

Quite a lot. It costs nothing if you already have Excel, Numbers or Google Sheets. The file is yours and sits wherever you put it. Nobody else decides what it looks like, so if you want a column for the dog's vet bills or a tab for the caravan, you add one.

It is also transparent in a useful way. Every number in a spreadsheet is one you typed or a formula you wrote, and nothing happens that you didn't ask for. People who value that sense of control often stay with a spreadsheet for good. There's nothing wrong with that.

Where do budgeting spreadsheets tend to go wrong?

Mostly in the formulas, and quietly. On fortnightly pay the most common slip is converting a monthly bill by halving it.

Halving feels right because a month looks like two fortnights. It isn't quite, since a year holds 26 fortnights and not 24. So the halved formula over-collects, and the spreadsheet looks healthy while an extra month's worth of bills sits idle in the bills account each year. The mirror-image slip, doubling a fortnightly figure to get a monthly one, comes up short instead, which is the problem covered in why monthly budgets do not fit fortnightly pay.

Then there's drift. A bill goes up and only one cell gets changed. Someone sorts a column and a formula stops pointing where it should. A copy on the laptop and a copy on the phone stop agreeing. None of it is dramatic, but it adds up over a year.

What doesn't a spreadsheet do for you?

It won't keep a record of what has already been set aside for each bill unless you build that part yourself. And it can't tell you anything until you open it and look.

Take one yearly bill. Car registration of $890 a year works out to $34.23 a fortnight using the set-aside approach from the payday budgeting method.

A spreadsheet shows that gap only if it has a column for every payday and someone ticks it every time. Most homemade budgets track the plan rather than the record. So a missed transfer stays invisible until the rego notice turns up and the bills account is short.

When is a spreadsheet the better answer?

More often than app makers tend to admit. A spreadsheet suits:

• People who enjoy building and tweaking it, and treat the upkeep as part of the point.
• Budgets with an unusual shape, such as a small business, an investment property or costs shared across several households.
• Couples who want to edit one budget live from two phones. A shared cloud spreadsheet does that. An app that keeps your data on one device doesn't.
• Anyone who'd rather spend nothing on software.

If you're in one of those groups and the spreadsheet is working, switching buys you very little. The case for an app is about the upkeep, not the budget.

What actually moves across when you switch?

Less than people expect. A payday budget needs three things from the old sheet: your incomes and when they're paid, each bill with its amount, how often it comes round and when it's next due, and what's sitting in your accounts today.

History mostly stays behind. Last year's transfers don't change this fortnight's set-aside figure, and the old spreadsheet can sit in a folder as an archive. Some people run both side by side for a pay cycle or two. Once the numbers agree, they stop opening the spreadsheet.

Moving from a spreadsheet to EachPayday

Here is what the move looks like, including the parts it doesn't do.

There is no import from a spreadsheet. Setup is seven short screens where you enter your pay cycle, incomes, bills and starting balances, and only the pay cycle screen has to be finished up front. The getting started guide walks through each screen. Your starting balances matter more than they look, because they are what lets the app's figures match your real accounts from the first payday.

From there the app does the conversion for each bill using the 26-fortnight year, and each payday it lists the set-asides to tick off. Ticks are kept. That builds the record a spreadsheet leaves to you. The Bills card then projects the lowest point in the bills account before your next payday, and shows how much to move in if it would dip below your buffer.

It doesn't send notifications. Like a spreadsheet, it shows you things when you open it, just with the sums already done. Your budget stays on your device rather than on a server, the trade-off covered in local-first or cloud, and you keep a backup file of it yourself. It's a one-time purchase, and the arithmetic on that against a subscription is in the five-year maths.

The demo runs the whole app on a sample budget. You can open the demo next to your spreadsheet and see how each one handles the same fortnight.