“So which budgeting tool should I use?”
I get asked this question a lot by clients who are new to active money management. They want to know what the best app or system is for setting and managing a budget. The truth is that it really doesn’t matter which one you use as long as a) it doesn’t stink and does the job it’s supposed to do and b) you actually use it.
For me, I’ve been a long-time Mint user*, a free platform that has over 10 million users. I think I started my account with them in 2009, before they were acquired by Intuit, the publisher of Quicken and TurboTax. I’ve watched the platform evolve over time, and they’ve done a good job of ensuring the core functionality of helping you create and monitor a budget functions well, especially since it’s a free platform.
So while I’ve been happy with the tool for some time, it’s only because I have had nearly 6 years of experience with it to make it work well for me. Here are 4 hacks to make it work well for you, now. (Keep reading to the bottom to see how to get a bonus resource that includes 2 more hacks!)
Hack 1: Use the “Rules” feature to tell Mint how to categorize transactions to your budget.
I hear this complaint a lot - “Why doesn’t Mint know that TRwxxWE is a gas station so that it will categorize it under ‘Fuel’”?
Okay, so I made up “TRwxxWE”, but many businesses don’t have easily recognizable name on the payee field of transactions. But guess what! You can train Mint to recognize these the way you like.
In the Transactions section, select a transaction that isn’t named well or categorized correctly. In the Description box, update the name to whatever is helpful for you and add it to the correct category of your budget. Under the Description box, you will also see “Edit Details” appear below the Description. Click on it to expand a new menu of options. Next to Rules, check the box so that Mint knows to always rename and categorize the transaction the same way in the future. If you ever want to change this rule or get rid of it in the future, select “Manage Rules” in this same menu.
The more you use this tool, the less time you will spend repeating the same steps to categorize the same types of transactions.
Hack 2: You have irregular expenses, so budget for them.
We all have irregular, but expected expenses. Insurance payments, tuition payments, property taxes, quarterly income taxes… Christmas (it’s the same day every year, folks. It shouldn’t be a surprise expense). Insurance payments are probably the most common, such as a once a year renter’s insurance policy or an every six months auto insurance policy. You can actually budget for these kinds of expenses with Mint so that you remember to include these in your budget over the year, which will smooth out the expenses over time.
When you create a budget for an irregular expense, just select “Every Few Months”. Mint will then ask you how much you spend, how often, and when you will spend money again on that item. Let’s take a look at my new user example below.
I spend $386 every 6 months on auto insurance and my next payment is in February 2016. Mint will add $64.33 every month to my Car Insurance budget until February when I should have set aside the full $386 to pay my insurance company. I make the payment, and the budget takes out $64.33 from what I have available to budget each month.
For another way to track irregular expenses, subscribe at the end to access the free resource for this post - a summary of all 4 hacks and 2 bonus ones - and resources for other posts.
Related: How to budget for Christmas gifts
Hack 3: Keep track of how you spend cash
If you withdraw cash from the ATM, Mint doesn’t know what you’ve spent the money on unless you tell it. So if you withdraw $160 and spend $70 on groceries, $50 on eating out, $30 on gas for your car, and $10 on coffee, none of that information goes into your Mint budget. And if you try to add it manually with separate transactions, you are double-counting those expenses. So how can you keep track accurately?
Is the answer to stop using cash? Au contraire, paying with cash is a great money management strategy. It psychologically “hurts” more than swiping a card or your phone so you are more likely to spend less if you use cash.
Use the “Split” tool to itemize how you spend that cash. As you spend it, select the transaction for the ATM withdrawal, open it up with “Edit Details” and then select the split icon. Add or update categories with how you spend that cash.
Hack 4: Get alerts when you need them.
If you tell it to, Mint will send you text and email alerts based on your specifications. So if you want to be told when a bank account dips below a certain level, or if you are close to spending too much on super-fancy coffee, you can get an alert. I still use electronic bank transfers for big expenses, and I like to know when these go through because they take a big chunk out of my checking account each month. So I get alerts for those.
You can also have alerts sent to two different email accounts. So if your spouse is less into Mint, then you can make sure they are staying engaged by receiving notifications. If you are single, you can use this to send alerts to a financial accountability buddy if you get off track, without having to give them access to your full account.
There are several options to choose from for what to receive notifications for and you can change them at any time. Just go to the Accounts link at the top of the page, and then select “Emails & Alerts” on the menu that pops up.
Whether you use Mint or not, the key of course is to use whatever works for you. Not everyone is a Mint lover, so I'd love to hear what budget tool works for you and how you get the most out of it.
*I’m trying out YNAB right now because of its great reviews. Stay tuned for whether I stay with Mint or move to YNAB!
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