how to be more productive with money using pocketsmith

How to be more productive with money using PocketSmith

Thoughts about money and personal finances are one of the biggest causes of stress and anxiety. Our relationship with money determines how we act, the decisions we make and our very mood on a day to day basis.

Besides winning the lottery, there’s no magic way to solve your money problems.

But, when you learn more about where your money comes from and where it’s going, you can improve how your attitude towards money and the decisions around how you spend it.

In this article, I’d like to share some thoughts on how you can use PocketSmith (affiliate link) to manage your money in a more productive way.

NOTE: Use the code 50OFFPREMIUM-5G7T to get 50% off for your first 2 months of premium. This can be applied in your account settings after you sign up for the trial.


What is PocketSmith?

PocketSmith is a web application that connects with your bank, credit card and investment accounts to provide you with a complete overview of your financial position. It’s similar to, however, a lot of users are now switching from Mint to PocketSmith due to its ease of use (PocketSmith also makes it really easy to migrate your Mint data to PocketSmith). I’ve been using it for the last 4 or 5 years and consider it to be an absolutely essential tool.

When you get it all set up, PocketSmith can show you:

  • How much you spend across different categories like groceries, petrol/gas and entertainment etc.
  • Where your money is coming from e.g. salaries, investments and business income.
  • Your monthly cash flow i.e. all money in compared to all the money going out. This is great for seeing how much you’re saving (or overspending) each month.
  • Your spending towards a set budget so you can see if you're under or overspending based on the limits you’ve set for yourself.
  • Your net financial worth, taking into account the value of assets like property, vehicles, shares and other investments.
  • See what your financial position will look like in the future. This is great for planning ahead, especially when making big life decisions.

And that’s just the beginning!

PocketSmith is easy to get started with, but when you’re ready, you can take advantage of more advanced features to learn even more about your money.

For example, my wife Hayley recently quit her job to come work with me. Before we made this decision, I logged into PocketSmith and set up a “scenario” to see how our monthly cash flow would change taking into account the fact that we would no longer be receiving her salary and that certain business expenses (like the rent for our cowering space) would be increasing. By creating this scenario I was able to see the effects of this decision on our personal finances – is that cool, or what?!

How to get started with PocketSmith

PocketSmith is literally packed with features. Last Christmas I purchased a subscription for my brother and even though he’s quite tech savvy, he spent a while learning how to use the different features.

That said, you can get started and get value from PocketSmith very quickly. Here are the minimum number of steps to get started so you can start to learn more about your money:

  1. Sign up to PocketSmith (I highly recommend you start with the Premium account so you can connect your bank account via a live feed). PocketSmith connects with over 10,000 supported institutions in 36 countries. All the major banks in the United States, New Zealand, Australia, Canada and the UK are supported.
  2. PocketSmith will import recent transactions from your spending, saving and credit card accounts. You can then assign transactions to specific categories. You can either set up your own categories or use the ones PocketSmith has created. For example, your weekly grocery shop can be allocated to “Groceries”.
  3. A great way to save time later is to create “Category Rules”. For example, this transaction (below) at Countdown (our local supermarket) is always going to be for groceries, so I can set this category rule to update all transactions with the same description to always be assigned to this category.

If you just do these three simple things, you’ll learn a whole lot about where your money is coming from and going to every month. And when you understand more about your spending habits, you can make smarter financial decisions in the future.

When you’re ready, you can start to explore more of PocketSmith’s amazing features.

  1. Set up a budget for each category. For example, you can set your weekly grocery budget to $250. Make sure to set a budget for your salary or wages so you can project future earnings.
  2. You can even get super specific and budget actual transactions using the PocketSmith calendar. For example, let’s say you have a spending category called “Utilities”. And let’s say every month you pay your power bill on the 15th and your water bill on the 25th. You can create a budget for each of these transactions and assign them both to the “Utilities” category. When you do this, you can use the calendar to see when different payments are going to be made throughout the month. It also allows PocketSmith to more accurately project your future financial position.

IMAGE: In this image, you can see two transactions within the “Online Services” category that get paid on the same day.

Money management tips

Having spent a few years using PocketSmith to manage our personal finances, I’ve learned to stick to a few good habits:

  • Get into the habit of checking PocketSmith once every week or two and making sure transactions have been correctly categorised. You may also need to go through and manually categories some transactions that haven’t been identified by a category rule.
  • If you like sticking to a budget, enable the budget email notification emails and receive a weekly update about how you’re tracking towards each budget category.
  • At the end of every month, take a glance at the “Cashflows” statement and look at your overall income and expenses from the different categories. As a general rule, don’t spend more than you earn and aim to make a surplus each month. If a certain category’s balance stands out as being higher than expected, you can click on the transaction amount to view all transactions for the month in that category to identify any outliers.
  • Plan your expenses. For all of your monthly fixed costs (e.g. rent, utilities etc.) it’s worth spending some time adding these different transactions to your budget categories which makes for more accurate forecasting.
  • If you need to cut back on spending, have a look at your largest spending categories first to see how you can lower your expenses. Cutting back on $4 coffee’s is great, but you’ll likely save a lot more if you can lower the interest you pay on a credit card or mortgage by refinancing and paying a lower interest rate.
  • Be careful with debt. While debt can be used as leverage to buy a house, short-term credit card debt or personal loans usually come at a high cost. And if you’re using short-term debt to finance material purchases that don’t generate a return, like a new TV, then you can quickly end up on a treadmill paying back nothing but interest.
  • Think of creative ways to earn more “on the side”. You could sell stuff you don’t need or start a side-business (like I did).

If you have any other financial words of wisdom, please feel free to contribute by commenting below.