Last week, I walked you through various “Steps of Creating a Realistic Budget Plan“. If you own a smartphone or tablet, you might want to use a personal finance app to create your budget without pulling your hair. Here comes Mint, a free personal finance app that makes budgeting extremely simple and easy. It also allows you to track your financial goals.
Let’s learn how Mint works and how you can use its various features to create your budget.
Budgeting With Mint: Automatically Categorized Transactions
When you sign up for Mint, it will ask you to link all of your financial accounts (checking accounts, bank accounts, credit cards, debit cards, investments, etc.) so that you can view your spending history on a single place, just like you see on your bank’s website. You need not log into multiple websites and track multiple modes of payment.
Mint has a number of default categories such as home, entertainment, food, kids and so on. Every time you use your credit card or debit card, it automatically categorizes the purchase. So, you can see where and how much you are spending over time. For example, when you purchase songs from iTunes, it is categorized into “Music”, similarly shopping at Meijer or Whole Foods goes into the “Groceries” category.
Most of the times, you won’t have to do anything manually. On rare occasions when you want to place a purchase in a different category than the default, just click on the category to change it.
With these categories, Mint will help you create and manage your monthly budget that you can access through Budgets tab.
Getting Started With Your Budget
When you begin with Mint, it shows you a starter budget based on the common categories such as “Restaurant,” “Groceries” and “Entertainment.” If you want to raise or lower your monthly budget, you can edit them. If you want to track your budget on weekly, quarterly or yearly basis instead of monthly, you can do that, too.
To get a realistic view of your current spending habits, go to the Trends tab. It will show you the spending from any month, week, quarter or year you want. If you notice that a particular category, say, Groceries is taking a significant portion of your budget, you can click on it to see a graph of just Groceries category. It will also display how much of the monthly allotted budget for this category has already been spent and how much is remaining.
Enter The Cash Transactions Manually
Though transactions through credit cards and debit cards are automatically added to Mint, it can’t track how much you are spending in cash from your pocket. So, when you spend cash, log them into the appropriate category of Mint. On the Transactions tab, go to the “Add a Transaction” button. Here you can choose a category, describe where you spent money, deduct the amount from your last ATM transaction if necessary (so that your total balance remains the same). You don’t have to deduct the amount from ATM transaction if you got that money from other sources than ATM.
Additionally, you can split any of the transactions into two. It is particularly useful when a part of the transaction falls into one category and another part into some other category. An example? Let’s say you spend $50 in iTunes Store. So, Mint will automatically put that transaction into Music category. But YOU know that only half of that sum was spent on music and the other half on movies. So, you can split the transaction into two by going to the Transaction tab. Just hit Enter Details and then Split.
Review Your Budget Once a Week/Month
All the offerings and features of Mint are no good if you don’t review your budget often. Set aside some time every week, month or quarter to review your budget. It will help you reassess how much money is left that you can spend the next week or rest of the month. Do you need to cut your spending? Where the most of your income goes? You can know these things only if you review your budget regularly.
Setting Goals
If you save some money regularly- whether for emergency, a vacation, a car or retirement, Mint will help you in this regard as well. It does all the maths to tell you how much you need to put aside every month to accumulate the required sum by the time you want.
Once you tell it your goal, Mint will also offer recommendations to achieve that goal quickly. For example, if you are saving for a new home, Mint will advice you on improving your credit score and other related subjects. Go to the Goals tab and stick to the instructions.
Budgeting is a tedious and time consuming task. But it becomes very smooth and easy with Mint. Now you have no excuse to delay creating your own budget.
Do you still have any doubts or queries? Ask me.