How to Create (and Stick to) a Realistic Budget with Mint
We'd all like to be more responsible with our money, but budgeting can take a lot of work. Here's how to create an easy, realistic budget and keep to it without pulling your hair out.
We all have our financial vices, whether we're spending too much on brain-altering coffee, eating out too often, or running wild with the credit card at the mall. This year, make a resolution to keep your budget better by using Mint, a free personal finance webapp that makes budgeting extremely easy. It automatically tracks what you spend, categorizes it, and helps you create realistic budgets. You can even track your financial goals and keep up with your money on-the-go. Here, we'll show you some of the basics of how Mint works, as well as how to use its features to create realistic budgets and stick to them.
How Mint Automatically Tracks What You Spend
Once you've signed up for Mint and linked Mint to your various financial accounts (bank accounts, checking accounts, credit cards, investments, etc.—their wizard will walk you through this surprisingly painless process), you'll be able to view your spending history much like you could at your respective bank's web site. Any time you use your credit or debit card, Mint adds that purchase to its log, so you can see what you're spending (and where) over time.
However, Mint does far more than that. For each purchase, it also automatically categorizes it, so you can see in a more general sense where your money is going. For example, it recognizes shopping at Whole Foods or Meijer as "Groceries", while categorizing iTunes as "Music". Most of the time you won't need to do manually add any categories yourself—Mint does it all for you. Of course, in the (rare) event Mint gets something wrong, or you want to file certain purchases into a different category than the default, you can simply click on the category and change it yourself.
Using those categories, Mint can help you build and manage your budget, accessible from the Budgets tab. When you first start, Mint will have created a few starter budgets for you based off common categories, like "Groceries" and "Restaurants". You can edit these budgets by clicking on them, raising or lowering the monthly budget, allowing it to roll over to the next month (which is good for, say, gas—if you spent less this month because of how the weeks fell, you can let it roll over to the next month). You can also set a budget to track you by a time period other than monthly, if you prefer.
Get Started with Budgets
Anyone who's tried setting up a budget without taking a hard look at what they already spend each month knows that it's easy to derail from what you've planned, because it's easy to budget far too little. Mint makes it easy to tweak your budgets in either direction by providing you with a realistic view of your current spending habits. By examining what you actually spend, you can get a better idea of what expenses are fixed, what you can do without, and refine your budget accordingly—or at least better than if you were making it up off the top of your head, based on what you think you should be spending.
If you head to the Trends tab, you can view graphs of your spending from this month, the last month, this year, or all time. A simple pie graph is a pretty simple way to see where your income is going. If you find that, say, Food & Dining takes up a significant chunk of your budget (more than it should, maybe), you can click on it to view a pie graph of just that category, where it'll show you how much of your Food budget you spent on, say, groceries and how much you spent on eating out.
With such a simple overview, it's really easy to see where you can start trimming fat from your spending. If you find that you're spending a lot on coffee shops, you can go back to the Budgets tab and add a custom budget for Coffee Shops to keep you in check.
Review Your Budget Regularly
Of course, this doesn't do you much good if you don't visit Mint often. The best way to keep up with your budget is to set aside some time, once a week or so, to review your budget. Half of this is going to be fiddling with Mint, and the other half is going to be reassessing how much you have left to spend next week (or for the rest of the month, year, etc.)
Add Cash Transactions to Your Log
While Mint automatically adds every transaction from your credit and debit cards, it has no way of knowing how you spend your cash, so unless you add those transactions in manually, your budget will be a little off-balance. I find the best way to keep track of it all is to get a receipt every time I spend cash, keep it in my wallet, and then pull them all out during budget review time and log them in Mint.
To do so, just hit the "Add a Transaction" button on the Transactions tab. You can add a description of where you spent it, pick a category for it, and even deduct it automatically from your last ATM withdrawal (so your total balance stays the same). Obviously, though, if you got the cash from somewhere other than the ATM (like if it was a gift, or if you owned all your friends in a game of Texas Hold 'Em), you'll want to uncheck that box.
Tweak Categories and Split Transactions
Mint is great at splitting your transactions up into categories, but it's bound to get something wrong every once in a while. For example, I've noticed that it frequently confuses some bars with restaurants, or gasoline with "auto parts & service". Furthermore, some transactions are added as "uncategorized", often understandably so (my Android Market purchases often get thrown in there).
So, when you review your budget every week, this is one of the things you'll want to edit. For example, filter out the uncategorized transactions, go through them, and correctly categorize them. Go through the past week's purchases and tweak any categories you need to. The more accurate all those categories, the more specific and correct your budget will be, and the more effective you'll be at managing your spending.
It's also worth noting that you can split any transaction into two, which is helpful if some of the cost in a transaction falls into one category and some in another. For example, if you spent $30 in the iTunes Store, half of which was music and half of which was movies, Mint will categorize it as Music by default. To split it into two, just click on the transaction, hit Edit Details, then hit Split. You can allocate a certain amount of that transaction to another category (Movies) so you your budget more accurately reflects how you're spending your money.
Tweak Your Budget (and Your Spending)
After reviewing your budget each week (or at least once a month, when you can have a broader overview of your budgets), take some time to reassess where you are. Are you on the right track with your spending? Have you already gone over any of your budgets? Answer those types of questions, then ask yourself what the answer is. You'll either need to tweak your budget to allow for more or less spending, or take a look back at those pie graphs and see where you can trim some of the fat.
It's worth mentioning that as you start to pay more attention to your budget, don't go too overboard all at once. Focus on lowering your spending in just one area at a time, and you're more likely to achieve that goal. If you try to cut out too much spending at once, you might get overwhelmed. Unless your finances are really dire, just start cutting back little by little, and you'll find it much easier to keep to your new budget later on.
After a few weeks or months of tweaking, you should get to a point where your budget balances out and you slide into a good spending routine. Of course, it may take a bit longer to cultivate good spending habits, so don't slack off on your budget reviews just because you've figured out what they should be.
Set up Notifications
Another handy feature of Mint that'll help keep you on track is its notifications. If you head to My Accounts > Email & Alerts, you can set email and SMS alerts to let you know when your balance is low, when you're over budget, when you have a bill coming up, and more. These'll help keep you on track with your budgets even if you don't have time to review it that week, or if you make a large purchase that throws your budget (or account balance) out of whack and you need to attend to it. It's a small feature, and certainly no replacement for regular budget review, but it's nice to have around for the more pressing situations.
You can also send yourself weekly or monthly summary emails that let you know the status of your account and your budgets. As with most things, this can be annoying for some people. However, if you're particularly bad at reviewing your budget (or haven't gotten into the habit yet), they can be a nice weekly or monthly reminder to do so.
Set Goals
The last thing you may want to turn on that'll help your budget keeping is Mint's Goals feature. If you're saving up for something—whether it's a car, a vacation, or just in case of an emergency, Mint can help you save up for it. It's pretty good at figuring out some of the math for you—for example, it can tell you how much you'll need to put away each month to pay for it by the the time you want it—but it can also track what your end goal should be. For example, if you're trying to get out of debt, it can take into account the credit card debt and car loans, for example, already present in your account. If you're saving for a car, it can keep an eye on the blue book value of that car so it knows how much you'll need by the end.
Mint will not only track how much you need to be saving, but also give you recommendations on achieving that goal faster, which is pretty handy. If your goal is a new home, for example, it'll give you advice on improving your credit, shopping for homeowner's insurance, and other related subjects. To set up a goal, just head to the Goals tab and follow the instructions. Again, don't try to work on too many goals at once—if you keep your efforts focused, you're much more likely to achieve them.
Budgeting your money used to be a tedious, time-consuming process, even with the help of technology. With something as easy as Mint, though, there's no excuse not to make a real resolution this year to keep better track of your spending. Got any of your own budgeting tips, Mint-related or not? Share them with us in the comments.
Send an email to Whitson Gordon, the author of this post, at whitson@lifehacker.com.
Do you find that when you try to use a budgeting system, the more complicated it is, the more overwhelmed you become; and eventually you stop using it? If that’s the case, Sprouty brings a simplified budgeting system that makes it easy to create a monthly budget, and more importantly, stick to it.
Sometimes keeping it simple is a lot more useful and that’s exactly what Sprouty aims to do. Unlike Mint and other popular money management systems, your personal bank account information does not even come into play; making it a secure option that can be used no matter where in the world you live.
id="more-59875">/> After signing up for a free account, Sprouty will prompt you to enter your monthly income, and will attempt to create a budget for you, based on minimum recommended amounts for each budget item.
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Of course, the budget will most probably not reflect your own personal spending habits, and you can modify it to suit your lifestyle.
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You can add additional budget items by clicking on the ‘Create a Budget’ button, determine the amount allocated to that category, and add tags. Using the same method, you can add additional sources of income, which is particularly useful for a family in which there are several breadwinners.
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Existing budget items can also be edited or deleted by clicking on any given item, adding or removing tags of your choice, and adjusting the amount. This will be one of the very first steps you take when using Sprouty, in order to adjust the budget to suit your personal needs.
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Once you have your budget in place, you can begin to add the actual transactions as they occur. New transactions are accompanied by the date, tags or description, and the amount.
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As you add tags, Sprouty will also suggest tags that are commonly used.
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If you add a transaction by mistake, it can easily be edited or deleted by clicking on any part of the transaction’s information.
Sprouty’s best feature is undoubtedly the overview it provides of your spending. Once you have your budget in place and have added your transactions, you can see a monthly overview of your budget, and see exactly where your money is being spent, and what remains.
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This is especially useful because you are able to visualise the areas in which you spend the most, and this could make for an easier way to understand where you need to cutback on your spending.
Sprouty is as no-frills a budget system as they come, but sometimes that is all that you need. It is extremely user-friendly, with barely any learning curve at all.
The website can be accessed from mobile browsers, making it possible to add transactions on the go. That said, it is not optimised for a mobile browser, and that would be one of the first welcome changes to the site. Adding transactions while you’re out and about is an integral part of the success of any budget system, so that payments don’t fall between the cracks. Whether it is a mobile website, adding transactions by email, or any other method, it will definitely improve Sprouty’s user friendly service.
How do you keep track of your spending habits? Let us know in the comments.
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surface encounters noblesvillesurface encounters macombGeneral Motors says it will begin installing cordless charging capabilities in its cars next year.
In a stunning development in the Anna Nicole Smith drug trial, a judge in Los Angeles Thursday dropped all charges against Smith's former confidant and attorney Howard K. Stern. Judge Robert Terry told the court that there was no ...
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In a stunning development in the Anna Nicole Smith drug trial, a judge in Los Angeles Thursday dropped all charges against Smith's former confidant and attorney Howard K. Stern. Judge Robert Terry told the court that there was no ...
Read our Xbox 360 news of Microsoft sells 8 million Kinects.
surface encounterssurface encountersGeneral Motors says it will begin installing cordless charging capabilities in its cars next year.
In a stunning development in the Anna Nicole Smith drug trial, a judge in Los Angeles Thursday dropped all charges against Smith's former confidant and attorney Howard K. Stern. Judge Robert Terry told the court that there was no ...
Read our Xbox 360 news of Microsoft sells 8 million Kinects.
surface encounters macombsurface encounters macomb misurface encounters macombGeneral Motors says it will begin installing cordless charging capabilities in its cars next year.
In a stunning development in the Anna Nicole Smith drug trial, a judge in Los Angeles Thursday dropped all charges against Smith's former confidant and attorney Howard K. Stern. Judge Robert Terry told the court that there was no ...
Read our Xbox 360 news of Microsoft sells 8 million Kinects.
surface encounters macombsurface encountersGeneral Motors says it will begin installing cordless charging capabilities in its cars next year.
In a stunning development in the Anna Nicole Smith drug trial, a judge in Los Angeles Thursday dropped all charges against Smith's former confidant and attorney Howard K. Stern. Judge Robert Terry told the court that there was no ...
Read our Xbox 360 news of Microsoft sells 8 million Kinects.
surface encounters macombsurface encounters michiganGeneral Motors says it will begin installing cordless charging capabilities in its cars next year.
In a stunning development in the Anna Nicole Smith drug trial, a judge in Los Angeles Thursday dropped all charges against Smith's former confidant and attorney Howard K. Stern. Judge Robert Terry told the court that there was no ...
Read our Xbox 360 news of Microsoft sells 8 million Kinects.
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In a stunning development in the Anna Nicole Smith drug trial, a judge in Los Angeles Thursday dropped all charges against Smith's former confidant and attorney Howard K. Stern. Judge Robert Terry told the court that there was no ...
Read our Xbox 360 news of Microsoft sells 8 million Kinects.
surface encounters rock topssurface encounters noblesvilleGeneral Motors says it will begin installing cordless charging capabilities in its cars next year.
In a stunning development in the Anna Nicole Smith drug trial, a judge in Los Angeles Thursday dropped all charges against Smith's former confidant and attorney Howard K. Stern. Judge Robert Terry told the court that there was no ...
Read our Xbox 360 news of Microsoft sells 8 million Kinects.
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In a stunning development in the Anna Nicole Smith drug trial, a judge in Los Angeles Thursday dropped all charges against Smith's former confidant and attorney Howard K. Stern. Judge Robert Terry told the court that there was no ...
Read our Xbox 360 news of Microsoft sells 8 million Kinects.
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In a stunning development in the Anna Nicole Smith drug trial, a judge in Los Angeles Thursday dropped all charges against Smith's former confidant and attorney Howard K. Stern. Judge Robert Terry told the court that there was no ...
Read our Xbox 360 news of Microsoft sells 8 million Kinects.
surface encounters macomb misurface encounters michiganGeneral Motors says it will begin installing cordless charging capabilities in its cars next year.
In a stunning development in the Anna Nicole Smith drug trial, a judge in Los Angeles Thursday dropped all charges against Smith's former confidant and attorney Howard K. Stern. Judge Robert Terry told the court that there was no ...
Read our Xbox 360 news of Microsoft sells 8 million Kinects.
surface encounters noblesvillesurface encounters macomb miGeneral Motors says it will begin installing cordless charging capabilities in its cars next year.
In a stunning development in the Anna Nicole Smith drug trial, a judge in Los Angeles Thursday dropped all charges against Smith's former confidant and attorney Howard K. Stern. Judge Robert Terry told the court that there was no ...
Read our Xbox 360 news of Microsoft sells 8 million Kinects.
surface encounters macomb misurface encountersGeneral Motors says it will begin installing cordless charging capabilities in its cars next year.
In a stunning development in the Anna Nicole Smith drug trial, a judge in Los Angeles Thursday dropped all charges against Smith's former confidant and attorney Howard K. Stern. Judge Robert Terry told the court that there was no ...
Read our Xbox 360 news of Microsoft sells 8 million Kinects.
surface encounterssurface encounters macombGeneral Motors says it will begin installing cordless charging capabilities in its cars next year.
In a stunning development in the Anna Nicole Smith drug trial, a judge in Los Angeles Thursday dropped all charges against Smith's former confidant and attorney Howard K. Stern. Judge Robert Terry told the court that there was no ...
Read our Xbox 360 news of Microsoft sells 8 million Kinects.
surface encounters macombsurface encounters michiganGeneral Motors says it will begin installing cordless charging capabilities in its cars next year.
In a stunning development in the Anna Nicole Smith drug trial, a judge in Los Angeles Thursday dropped all charges against Smith's former confidant and attorney Howard K. Stern. Judge Robert Terry told the court that there was no ...
Read our Xbox 360 news of Microsoft sells 8 million Kinects.
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