I hope you all had a spendid Christmas! We’ve been enjoying our extended Christmas celebration that is spanning from last Saturday to the next. Since the new year is on the horizon, and we’re all starting to think about our resolutions, I thought it would appropriate to talk about budgeting. I mean, who wouldn’t like to spend a little less next year, and be able to save a little more? We all have those goals, but sometimes actually achieving them can be difficult…
Let me introduce you to my good friend, confidant, and personal accountant…. Mint.com. I may be a little biased, but this site will truely blow your mind! We all start in different places when it comes to budgeting, but no matter how calculator savvy you are, this tool will make your life so much easier.
What is Mint.com??
Essentially, it’s a website that pulls all your financial accounts into one neat little space. Gone are the days of adding up spending accross multiple cards and keeping piles of paper receipts. Mint pulls the financial information from all your accounts (credit cards, savings and checking accounts, loans, and 401k, to name a few) and aggregates them together to give you a total picture of your financial state. But, you can do much more than just view your transactions…. Mint provides extensive budgeting tools to help you stay on top of your monthly expenses as well as your savings goals.
My Experience with Mint
I cannot tell you what a difference Mint has made in my life. It gets me excited to save money and to see the progress tracked in my account. I’m more motivated to stay within the budgets I’ve set when I receive warning emails that I’m approaching the limit. And, I have more peace about our future financial well-being when I look at our savings goals and see exactly what we need to do to get there and whether or not we’re staying on schedule.
Ok, clearly I am biased and love this tool, but I just want to clarify that I’m not affiliated with Mint in any way. I’m just a passionately loyal fan!
Signup is extremely simple and efficient. You will enter your email and create a password, then you will be prompted to enter your banking accounts. Just type in its name and Mint finds the account’s site. Once you’ve verified the account name, you will need to enter your account password and security information.
(Wait, What??? I knew this was too good to be true!!)
Hold on! I know that sounds scary, but I researched the safety of the site in length. First off, Mint is owned by a company called Intuit whose line of business is safeguarding sensitive financial data. It uses a 128-bit encryption system to secure your bank information, and is monitored by three well-known and respected web security agencies. It currently has over 10 million users, and never has access to your money (it is a read-only service). I understand that there is still a risk and this is a personal decision that is based on your own risk-aversity (woah sorry, just pulled out the accounting lingo….). But, for what it’s worth, I give it my fully-secure stamp of approval.
Back to the signup process…
Once you link your financial accounts to Mint, it takes a few seconds and compiles all the data into a financial overview. On the left you should see your different accounts broken down by type (cash, credit cards, loans, investments, and property). What’s neat about this, is the site nets all those numbers and gives you a ‘net worth.’ Let’s hope you are in the green…
In the main column you will find alerts, advice, upcoming bills, and a preview of your budget (once you’ve set one up). This area is like your own customizable dashboard, you can put the most relevant information front and center. Once you have all your infomation linked, your next step is to click on the transactions tab. This will show each individual inflow or outflow of money from all your accounts. You may notice that Mint.com automatically categorizes these transactions for you. While this can be a nice feature and it tends to be very smart in its sorting, ultimately Mint can’t know exactly what you purchased and how it fits in your budget. So, you will need review each transaction to the best of your ability and click in the category area to sort your purchases. This may be tedious and not totally accurate now, but as time goes on you will find that it is a quick and simple update once a week (much quicker than counting receipts and credit card bills!)
Mint has many excellent predefined categories for you to use, or you can define your own. For example, we created a category called “Fun Money” under shopping to use for whatever we liked each month. It is important to note the heirarchy of the categories, as this will affect how you budget everything out. Notice that you can edit transactions, split transactions, tag them to remember later, or add transactions (such as cash purchases). Mint is so savvy and helpful it automatically deducts the cash transactions you enter from your latest ATM withdrawal (Neato, right??)
After you’ve fixed your categories and played around in the transactions tab, it’s time to take a look at your trends. Here you can view your spending over time, and by category. This is helpful to know how much money you spend on groceries each month, what percentage of your expenses come from those Target runs, that kind of stuff. You can break the information down by account or category, or view your net income (i.e. savings) over time. Play around to get a feel for what your financial history looks like, and start thinking about areas where you may be overspending, or could cut back.
Now that you’ve seen a true picture of your spending, it’s time to budget. First set up an income budget with how much you expect to earn each month. This will give you a guideline of how much you have to work with. Have any debt to pay off? Next, put a budget in for your debt payments. Now, what’s left over is what you have to live off and save from every month.
Everyone budgets to a different level, and that’s what’s great about mint, you can do a very high level budget that ensures you get your bills paid and spend less than you make (try the “Everything Else” category). Or you can break your budget down for every nitty gritty detail. We prefer it somewhere in the middle, for example: all of our car expenses (gas, tolls, maintenance…) go into one big category for auto expenses. But, we break out our more personal expenses like clothing, and haircuts into deeper detail.
If you are accountant minded… you can even get really crafty with these budgets. For instance we use our budgets to accrue once a year expenses. If we plan to spend $240 a year on vacationing, we allow a monthly budget of $20 for vacation and select ‘roll over balance at the end of each month.‘ This is an extemely helpful way to reward saving. If you spend less in a budget one month, you have more in the next month.
Use the “You’ve Budgeted” tool to the right to keep track of where you are as you plan out your money. If you have leftovers, it will prompt you to set up a goal. If you set it up with that extra amount in mind, then every penny of your month belongs somewhere. This eliminates a lot of ambiguity in your financial life.
Now that you have a monthly plan set up, it’s time to explore your goals and investments. The beatiful thing about Mint is that it can track the progress of all your goals! For instance, we have a goal for a down payment on a house. We created a separate savings account at our bank expressly for that purpose. By linking that account to our goal we created in Mint, we are able to track our progess and project when we will meet the goal. Hopefully you all are saving for retirement as well. If so, create a retirement goal and link it to your retirement vehicle. In the Investment tab you can even track the growth and change in your 401k or IRA.
Now you solve any budget dilemma.
Don’t you feel so much better now about your financial future? You have a plan and you can comprehensively track your progess in one account (with a beautiful user-interface I might add). So, take it one step further to ensure that this plan sticks…. Set up email alerts for going over budget or when bills are due. Let Mint.com be your own personal secretary.
No, this is not a financial blog… although I love to talk about my thrift store finds. I’m just your everyday DIY blogger who has a deep appreciation for a tool called Mint. If this post struck your ‘fancee’ (haha, I’m so punny! ;)), then perphaps you’d like to hear more of my tidbits of life! Sign up to receive little ol’ me in your inbox 🙂 Or, use this other awesome tool… Bloglovin’ to follow me and all your other awesome bloggie friends.