I’m currently settled down in Budapest through mid-January, and given the severe weather in Europe I’m incredibly glad I don’t need to be traveling right now.  I’m enjoying the beautiful snowy weather, the lovely Christmas market, and most of all the delicious and affordable food!

Being settled in and starting to look at my 2011 budget have led me to create a new investment account with Lending Club, a peer to peer lending service which has been around for a few years.  (Moneydance is not affiliated with Lending Club, they’re just a company I as an individual do business with.)

First, I created a custom investment type.  To do this I went to the “Add Security” interface, set the Type to “Other”,  and clicked the horizontal arrow next to the Subtype field.  This brings me to an interface where I created a custom subtype by clicking the + button.  (If you use Tags this interface will look familiar to you.)  You can also create custom subtypes of other investment categories- stocks, mutual funds, etc.

Now I’ll create a new Security for the first loan I’ll be funding.  To do so I open my account, click the Actions button, and select the Add Security button.  I then click the “New Security” button, create the new security, assign my custom sub-type to it, and I’m ready to enter my transactions.  Because Lending Club allows me to fund several separate loans in small amounts, I’ll track each loan individually so I can have a targeted rate of return.  I’ll be able to use my custom subtype to get an overview of how the investments are performing as a whole.

Next week I’ll talk more about using the Hungarian forint (my 5th currency of the trip for those of you who are counting) as well as discuss how I interact with the iPod app when I’m using multiple currencies.

I’m currently in Milan, enjoying the gorgeous architecture and fabulous fashion. I could quite easily blow the rest of this months budget on clothes, and that isn’t even including the shoes! I’ve been traveling for 2 months with 4 left to go, and I feel like I’m finally getting into the rhythm of long-term travel. Except for the setup of my budget.

I was working on my budget review when I realized that my budget just wasn’t working for me. One week I would go way over budget on eating out, but underspend on entertainment, the next week the opposite. Other weeks I’d be way under budget on all of my categories. I realized I needed a new budgeting strategy. Welcome to my new budget setup: essentials and everything else.

I realized that there were a few categories where I really care about spending, and everything else I really don’t. Here’s what I track closely- my savings contributions, my slush fund contribution, lodgings, travel, and groceries. Everything else doesn’t matter; I have a certain amount of money available but I don’t care if it goes to sushi or shoes, massages or marzipan.

I’ve shifted my budget setup accordingly- I have fixed budgetary amounts for categories which will keep a roof over my head and comfortably fed, and everything else falls into a category I’ve called “Stuff.” Stuff might be 5 star cuisine, a pedicure, or Italian leather gloves lined in cashmere. I’ve budgeted the category by month, instead of weekly as I had budgeted the many categories I rolled into it. This better reflects the nature of my spending; I tend to spend a few days shopping and eating indulgently and then a week or two cocooning.

This new budgeting strategy has also had the happy side effect of greatly streamlining my data and transaction entry. I tend to pay for travel and lodgings with my debit card, but use cash for everything else. I set the default category on my cash tracking account to “stuff,” and now I only need to deal with categorizing when I buy groceries. I’m experimenting with using tags to track my larger purchases (over 50 euros or so), but I might lose interest in this eventually.

When I made these edits to my budget, I also moved all the transactions in the categories I was rolling together into my “Stuff” category. I edited my budget as well, so now I can review November’s spending using the new budgeting guidelines. I did a good job of sticking to my budget- the only category where I went significantly over was my contributions to my savings account. There are a number of categories (future months’ expenses) where it looks as if I am running far under budget, but this is because of the oddities of my budget.

I’ve also been promising a sneak peek of one of our new reports, and this is one I’ve THRILLED to be able to use. It’s called the “Detailed Transfers” report. This report allows me to select source and target accounts for a very customized report.

I enjoy this report almost as much as the budget report- it makes it easy for me not only to track my spending and savings goals, but also to create a very targeted report. I could, for example, create a report which doesn’t include interest income, or income from my investment accounts, or expenses which are attributable to my business. In this view I’m looking at the piece of the report which shows how much I have transferred from my checking to my savings account in November.

This report is still a work in progress but we’re anticipating including it, and several other new reports, in our next stable release. We’ll post more about when you can expect to see that in the next few weeks.