How to Budget: 5 Reasons to Choose Paper Over Digital

In this day and age, technology is all the rage. The latest fashion of automation cuts through inefficient and repetitive tasks, while algorithms are specifically engineered to predict future tastes and tendencies to maximize businesses’ sales and profits.

Apps, programs, widgets, and gadgets monitor nearly every aspect of our lives from tracking the duration of our workouts to the quality of our poop. Simply put, there are no shortages of apps designed to assist you in micromanaging every area of your life, including tracking your finances and developing a budget.

Unsurprisingly, considering the title of this article, I advocate putting aside the so-called cutting-edge technology and opting instead for the archaic, but highly versatile, pen (or pencil) and paper.

Make no mistake, I think digital has a place in budgeting, but only when used sparingly and deliberately. I echo Orwell’s skepticism when he wrote about the incessant push toward industrialism in The Road to Wigan Pier in 1937:

The machine has got to be accepted, but it is probably better to accept it rather as one accepts a drug—that is to say, grudgingly and suspiciously. Like a drug, the machine is useful, dangerous, and habit-forming. The oftener one surrenders to it, the tighter its grip becomes.

Read “technology” instead of “the machine” and the principle remains as true now as it did then.

But, I digress.

Below are five reasons why I recommend that you choose pen/cil and paper over apps or programs. If you are new to budgeting, there is no time like the present to start! But even if you are a seasoned technological budget, I would encourage you to at least give paper a serious a try and see how it compares.

1. Privacy and data protection

Nowadays, news of data stolen or compromised is not an uncommon headline. The Facebook-Cambridge Analytica scandal is an obvious example, where user data was collected without consent for political advertising.

There’s also the fourteen-year long fraud at Wells Fargo wherein employees exploited customers’ information to meet sales goals, doing such things as “sign[ing] unwitting account holders up for credit cards” and “secretly transferr[ing] customers’ money.”

And in August 2020, approximately 11,200 Government of Canada Key and Canada Revenue Agency accounts were hacked using “previously stolen credentials to log into another account owned by the same victim.”

While I’m certainly not suggesting that you should stop patronizing banking institutions or start boycotting online banking, there is an argument to be made for restricting the dissemination of personal and sensitive data across other platforms more susceptible to cyberattacks or financial incentives to sell users’ data—no matter how ardently their terms of services claim to respect and value customer privacy. The micro details of your financial breakdown, what you hope spend versus what you actually spend and in what categories, is of high value to businesses who use such information to fine tune their advertisements to incite you to buybuybuybuybuy.

Many apps actually require you to consent to their sharing your data to third parties for the sake of marketing and advertising. If you refuse, you cannot use their app.

Furthermore, increasingly more apps I install demand access to my location, contacts, and gallery. Why a fitness or finance app needs access to my images is beyond me.

This may perhaps not concern you, but it does concern me. I do not believe that the micro-details of my finances need to be sowed into an app for someone else to harvest.

2. Financial intimacy

Just ask any person in a long distance relationship: while the advances in technologies such as Skype and Instant Messaging are wonderful tools, nothing replaces the joys and fulfillment of hugging, kissing, and talking to a human being without the intermediary of a screen.

I feel much the same way about my finances.

I believe one of the ultimate goals of budgeting is to be able to recall, at the snap of your fingers, the exact (or very close ballpark) figure of the current balance of all your saving, chequing, and credit accounts.

Such intimate knowledge of your finances is not as likely to occur when your balance is automatically generated by an application’s algorithm after you input a purchase or transaction amount. There is little incentive for you to even look at that number unless is shocks you by turning from black to red!

It is easy to do one’s finances on autopilot when using an app or program, and that defeats the purpose of budgeting, which should be an intentional practice, closely tied to long-term life goals you hold dear to your heart. Such ambitions should not be relegated to an automaton.

If you have to do the heavy lifting of calculating the new balance after a current transaction, painstakingly writing down the number every time, you are much more likely to remember those numbers.

While the pen and paper method may be more tedious and require more effort initially, this extra effort tends to diminish as the practice develops and becomes a habitual behaviour.

And besides—nothing that is truly rewarding comes easy. Very little pride is truly acquired when a task is too easy or convenient or done for us by another (the very popular finance tracking app “Mint”, for example, advertises itself as an “effortless way to manage your money”…).

3. Creative control

Much like intimacy, using pen/cil and paper allows you total creative control of your finances. When you download an app or program, the layout is imposed on you by someone else. It’s their vision of how finances should be done.

But finances are very personal. No one’s situation is exactly the same.

When you use pen/cil and paper, you are in total control of how you set up your finances and, crucially, you can make modifications to your layout at any time. With apps, you have to leave comments and hope that the development team finds it a worthy suggestion to implement; and even then, who knows what end result they will produce.

You are constantly at the mercy of other people.

Furthermore, there is a learning curve associated with every app or program. Doing one’s finances and budget is tedious enough as it is, but becoming frustrated due to a poorly explained app or a difficult-to-navigate program is enough to turn a person off finances altogether!

When you use paper, you can literally begin with a blank page. Or, you can set up extremely simple tables like I have provided in past articles. While primitive, these are enough to get you started. As you gain confidence and understanding of your finances, you can make the changes that are necessary to make your finances easier to manage.

4. Assume responsibility

Tied to the notion of creative control, when you use a pen and paper, is that you are responsible for every aspect of the process. You must own the process.

It can be tempting to blame a program’s deficiencies or an app’s incompatibility with your new phone for a failure to continue your budgeting practice.

Such an attitude is impossible when all you use is pen and paper. There is no one to blame but yourself. While that may seem daunting at first, just remember—there is also no one else to congratulate but yourself as you persevere and see your financial situation improve.

5. Avoid dependency

My last case against using digital in preference of pen and paper is in attempt to lessen your dependency on external factors beyond your control for the smooth and flawless execution of your budgeting practice.

Nothing can kill a budgeting habit like:
✘ discovering that your preferred finance/budgeting app has been dropped by the development team
✘discovering that your preferred finance/budgeting app or program is incompatible with your new phone or laptop
✘ a new app/program update causing either the app/program to freeze or your entire device to become momentarily (or more than momentarily) unresponsive
✘ a new app/program update that does away with your favourite features or changes the design to one you find unappealing
✘ an internet or power outage that prevent you from logging in to your app or from accessing your data
✘ a critically low laptop battery prevents you from doing the same

Coincidentally, three weeks ago I decided to forgo my own advice and transitioned my daily scheduling practice from pen and paper to digital.

I decided to use the Samsung Notes app because it came pre-installed on my phone and I liked that the minimalist style would force me to not micromanage my time. It was simple and extremely quick to use, which was the point of the transition.

Last week, I was prompted to update the app, which I did.

What a mistake.

Many of my favourite features were done away with, and I highly dislike the new design when I open my notes. I’m reluctant to uninstall the new update because my notes have already been converted and won’t be accessible with the older version. It’s a headache.

If this were to happen to me when attempting to start a habit of financial planning, I may very well ditch the app and budgeting altogether.

Conversely, none of those factors would prevent you from doing your finances. In fact, if experiencing a power outage, doing one’s finances by candlelight or the light of a kerosene oil lamp might turn out to be a highly enjoyable experience!

Conclusion

This article is not meant as an attack on technology or other digital products or gadgets. Such devices are wonderful tools when they are used appropriately. I myself make extensive use of Google documents to create my financial templates, and I use a calculator for even the most basic math. I also use online banking to pay my credit card and subscriptions payments. So, technology definitely has its place.

For those of you who are new to budgeting, or who want to budget but have not yet started, and are worried that your finances are too long and complicated for pen and paper, I say two things:

First, creating a budget or “getting one’s finances in order” does not happen over the course of one or two dedicated time blocks. I believe one should build up to a financial overview from the ground up. I explain this process over the course of my How to Budget series, but you can specifically check out this article in which I explain how you can use the 1-to-5 minute rule to slowly build the repertoire of all your payment commitments and necessities.

What this means in practical terms is that you do not need to immediately sit down and input every financial commitment, expense, or investment in your table as you would be inclined to do when starting a new app or program.

Instead, add items as they appear in your life: your phone bill is due (add it to the table), you remember an app you use has a recurring annual subscription fee (add it to the table), you notice an unusual charge to your credit card and upon investigation it turns out to be a subscription for a program you no longer use (add it to your table, perhaps with a note to unsubscribe ASAP), etc…

In this way, you “do your finances” as they impact your life in the moment. Not only will this make the daunting task of “doing the finances” more manageable, but you’re more likely to become aware of what it is you actually spend your money on—and, hopefully, re-evaluate in real-time whether each expense is necessary.

Second, if your finances are “complicated” because you spend a lot of money, now is a perfect time to consider simplifying and reducing your expenses. If the goal is to spend less money, a great motivator can be the lack of desire to write it all down. Cut back on the spending, eliminate unused or unnecessary subscriptions, trade paid services with friends. Fewer expenses means less expense tracking.

If your finances are complicated because of financial investments, my advise for you would be that you can still research and make investments using your computer and track expenses on paper.

Technology certainly has a place; its place just isn’t everywhere for everything.


Head over to the series masterpost to start the series from the beginning or to find a specific article within the series.

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