Keeping track of your spending is the best way to ensure that you live within your means and can put money aside for a rainy day. Budgeting software such as YNAB can help you keep track of your financial transactions, but you have to pay to use the service. Now I'm self-hosting my budgeting software and saving money instead of handing it over to someone else.

Paying to save money felt counterintuitive

For a long time now, I've been keeping on top of my finances using YNAB. YNAB—short forYou Need a Budget—is powerful personal budgeting software in which you assign every dollar a purpose, such as paying a bill, buying groceries, or saving for a vacation. When each dollar is assigned, if you want to spend outside your budget, you need to take that money from another assigned spending category, such as your "dining out" budget.

Credit: Lucas Gouveia / How-To Geek | Pixelplus8 / Shutterstock

The system works well, ensuring that if I want to buy something I haven't budgeted for, then I need to find that cash from a different category, meaning I'm never overspending. Even as a freelancer, without a fixed income every month, using YNAB has helped me to keep on top of my spending. The trouble is, to use YNAB, you need to pay a subscription of $14.99 per month or $99 per year.

Each time I looked at my assigned spending, it felt self-defeating to be paying nearly $180 a year to save money. I wondered if there was a way toself-host my budgeting software without having to pay a subscription fee.

There are plenty of self-hosted budgeting options

The good news is that there are plenty of self-hosted budgeting tools available. The downside is that it took me quite a while to decide which option to go with. After a lot of reading around, I decided to go withFirefly III.

There were several reasons why I chose this option. While Firefly III is more complex to set up than other popular options, such as Actual, it offers more powerful features. For example, I can set up a rule that automatically tags specific types of transactions with the "business" tag. I can then export all the transactions with the "business" tag and use them when completing tax filings.

Credit: Andrew Heinzman / How-To Geek

Perhaps the biggest reason that I opted for Firefly, however, is that aHome Assistant integration was added in a recent release of the smart home software. The Firefly integration creates sensors in Home Assistant for the accounts, categories, and balances in Firefly. I can use these sensors to create automations triggered by changes in Firefly. For example, if I go over budget in a particular category, I can send a notification to my phone informing me of the fact.

Setting up Firefly III was a little more complex than I'd expected, as you also need to set up a separate data importer that you use to import your transactions, but it still didn't take too long to do. The official website offersDocker Compose files you can use to get Firefly III and the Firefly III Data Importer up and running.

Automating transaction imports comes with a cost

One of the most useful parts of YNAB is that it can connect to your bank and credit card accounts and automatically import all your transactions. This saves me from having to manually upload my data every few days.

The good news is that I was able to create a similar feature with Firefly III, although it does come with a small cost. The best option I found for my needs wasLunch Flow, which can connect to banks and other financial institutions via their APIs, allowing me to import my financial transactions. This service isn't free, however; I'm paying a little over $3 a month to pull data from two separate accounts.

This is more than worth it, however. I've set upa cron job that automatically imports the data from both accounts each morning, so that my transactions are always up to date in Firefly.

Backups are essential when self-hosting

One danger with self-hosting anything is that if something goes wrong with your home lab, there's a chance you can lose all your data. That's whytaking regular backups is vital.

Credit: ProxMox

Doing so is simple enough, however. I'm running Docker inside a virtual machine on a mini PC,managed by Proxmox. Proxmox makes it easy to take local backups of the entire virtual machine each night, and I also pass these to cloud storage in case mymini PC dies. Should anything go wrong, I can quickly restore all my financial data without having to import it all again from scratch.

I'm saving nearly $150 a year

The main reason I did all of this was to try to save myself some money, and it's doing exactly that. I was paying about $180 per year in YNAB subscriptions. I'm now paying just over $30 a year for the Lunch Flow subscription that allows me to import my transactions from my bank. It means that I'm saving almost $150 a year, which are dollars I can now assign to another job.

There arecosts involved with self-hosting, the biggest of which is the cost of the hardware, but since I was already self-hosting other services, adding Firefly III to the mix really did cost me nothing.

One of the major benefits of self-hosting software is that you can almost always find options that are free and open source. It means you don't need to keep paying a subscription fee for apps and services; you can duplicate their features yourself for free, and keep all your data local, too. You may find you end up saving yourself a lot of money in the long run.