App guides
Your first week: what to set up, and in what order
Most people set up a finance app in the wrong order, end up with a screen full of numbers that do not reconcile, and quietly stop. Here is the sequence that works, and why each step has to come before the next.
There is a version of the first week that ends with you abandoning this. It goes like this. Install the app, add fifteen categories you invented on the spot, start typing in today’s coffee, realise you have no idea what your accounts actually held on the day you started, and give up two weeks later when nothing adds up.
The order below avoids that. It is not the fastest route to a screen with numbers on it. It is the fastest route to numbers you can trust, which is the only kind worth having.
Day 1. Accounts, and their real opening balances
Start with where the money is, not with what you spend.
List every account. Current accounts, savings, cash you actually hold, credit cards, brokerage accounts, and anything owed to you. Then give each one a real balance as of one specific date, the same date for all of them. Pick the first day of a month. It makes everything afterwards easier.
That date is your opening line. Everything before it is history you are choosing not to import. Everything after it has to reconcile. Getting the balances right on day one is the highest-value twenty minutes in the whole process, because every net worth figure you ever see is built on top of them.
Two things people get wrong here.
Credit cards are negative balances, not accounts you ignore. A card with €800 outstanding is €800 of debt on your balance sheet. Leaving it out makes you look richer than you are.
An account in another currency stays in its own currency. Do not convert it by hand into your base currency. Record it as it is and let the app do the conversion. Otherwise the number goes stale the moment the rate moves, and you will never know which figures were converted at which rate.
Day 2. Your base currency, and only then, categories
Set the base currency you think in. This is the one every total gets reported in. It should be the currency of the country you live in, not the one you earn in. It can be changed later, but it is disruptive, so spend a minute on it now.
Then categories. Resist the urge to build thirty of them. Start with eight to twelve top-level buckets, cut by how hard the money is to change rather than by what shop it went to. There is a full argument for this, with a starting structure you can copy, in how to categorise expenses so the data is actually useful.
Categories come after accounts for a simple reason. A category with no transactions in it is a guess, and you will change it. An account balance is a fact, and you will not.
Day 3. Import what you can, type what you cannot
Get a statement out of your bank covering the period since your opening date, and import it rather than typing it. Two reasons. It is faster, and it is complete. The transactions you forget to type are exactly the ones that break your reconciliation later.
Then categorise the imported rows. This is the tedious part and it only happens once, because the category rules learn from what you do here. Getting fifty rows right on day three means the next import arrives mostly pre-sorted.
Do not let this become a project. If a row is unclear, put it in Unclassified and move on. Speed at entry, accuracy at review. You will clean it up in the monthly pass.
Day 4. Fix the transfers
Go back through what you imported and find every movement between your own accounts. Current to savings, credit card repayments, money sent to your own account abroad, purchases of investments.
None of these are expenses. Every one of them recorded as an expense inflates your spending and destroys your savings rate. Change them to transfers.
This is the step that separates a ledger that tells you something from a ledger that tells you nonsense, and it is the step almost everyone skips. Budget twenty minutes for it.
Day 5. Reconcile, for the first time
Open each account, take the balance the app calculates, and compare it against what your bank actually shows today.
They will not match. That is normal, and it is not a failure. It is the system doing its job. A gap means something is missing, duplicated or mistyped, and the app tells you the size of the gap so you know what you are hunting for. A €4.20 gap is one forgotten coffee. A €2,000 gap is a missing transfer.
Fix them until every account matches. The moment they do, every number downstream is true rather than approximately true. Income statement, balance sheet, net worth, all of it. That feeling is the whole reason to do this.
Week 2. Add the household, then leave it alone
Only once your own ledger reconciles should you invite the other person in the house. A shared ledger built on an unreconciled base just gives two people the same wrong numbers.
Then stop configuring and start using it. Budgets, property, mortgages, forecasts, all of it can wait. Two or three months of clean, reconciled data is worth more than every advanced feature combined, because those features are all built on top of that data.
The monthly rhythm, from here on
Twenty minutes, once a month.
- Import or enter anything outstanding.
- Empty the Unclassified bucket.
- Check every transfer is a transfer.
- Reconcile each account against its real balance.
- Read the income statement for the month, and glance at net worth.
That is it. Not a daily habit, and not a discipline that needs willpower. One sitting a month, and the numbers stay true.
The thing worth knowing on day one is that the tedium is front-loaded and it is finite. Setting up correctly takes a few hours spread over a week. Keeping it correct takes twenty minutes a month, forever.
Almost everyone who gives up does so because they inverted that. They started fast, skipped the reconciliation, and discovered six months later that they had a large pile of data that could not answer a single question.