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Five Reasons to Manage Personal Finances with Mint

Five Reasons to Manage Personal Finances with Mint

Virtual money management has been a real game changer in the last decade. With all of our personal finance data at our fingertips, it makes total sense to find the best tool out there to get on top of this area of life. In my opinion, Mint.com is by far the best application available for anyone interested in attaining financial freedom on their own terms. Here are the top 5 reasons that this is the case:

1. Full Integration

Mint is an incredibly powerful tool in that it allows you to bring all your financial relationships together under one roof. By integrating all of your bank accounts (i.e. checking and savings), brokerage accounts, retirement accounts, credit cards, store cards, loans, and practically anything else, Mint provides a solid platform to get a full picture of your financial situation and to continuously monitor all activity across that world. Long gone are the days where you need to balance your check book and go through credit card statements line by line. Mint’s automatic categorization of almost all expenses makes it super simple to go through and make minor edits to run all sorts of personal financial analysis.

In order to get the full benefit of an integrated personal finance platform like Mint, my strong suggestion would be to get in the habit of paying for everything with your credit card. While there has been much hype over the years that credit cards are dangerous and get you into trouble, with responsibility, they can be your most powerful asset. By paying for everything you can with credit cards, all transaction details get automatically ported over into Mint and roughly categorized for review at a later time (plus there are tons of other benefits like rewards points that come with using plastic!). If you find that you don’t have your credit card on you for some reason, reach for your debit card next as you will get the same information into Mint although without the rewards points. In my opinion, cash should only be used as a last resort for two reasons: it’s difficult to track spending and there are no rewards for using it.

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Oh, by the way, Mint provides seamless integration across web and mobile devices as well so all of your financial information is accessible wherever you go.

2. Trend Analysis

Once you have at least a month’s worth of data, you can start doing some informative analysis of your financial life. Here’s a general breakdown of the monthly routine that I go through:

  • Start by checking each spending activity item in the Transactions section.
  1. Modify the names of transactions noting specific information (e.g. item, place, etc.).
  2. Re-categorize any items that were not automatically filed correctly. My suggestion would be to only create subcategories for areas that will have multiple items per month.
  3. Split out any transactions that were lumped together. With cash withdrawals, I find it difficult to always account for where that went but try your best.
  4. Mark any transactions as duplicate to not include in reports. I prefer to leave out any small interest and investment activity all together.

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    • After modifying the underlying data, check out the Trends section.
    1. Start with Spending by Category using pie charts for exactly a month.
    2. Click through each category to check all Transactions are accurately filed.
    3. Pull up the Net Income report to see how your income for that month compared to spending.
    4. Compare your Net Income and each major Category for the Last Month with the Previous as well as some other custom time period (e.g. 3, 6, or 12 months).
    5. Make note of general trends and spending habits that can be planned for in your budget.

    3. Budget Setting

    Setting budgets for your monthly spending is a good habit in general. While budgets can be overly constraining, Mint does a great job of providing functionality to make budgets a helpful reference point for financial freedom. I definitely recommend using this part of Mint at least  to program some broad categories and a few subcategories especially for things like Food & Dining. My suggestion would be to only get more granular with subcategories with things like automatic payments (e.g. magazines, Netflix, Hulu, etc.) so you can quickly account for these when reviewing your budget. Caution: the “Everything Else” section conveniently hides the rest of your spending so you’ll need to be diligent about seeing how much money is slipping by your plan.

    Another helpful feature is that Mint rolls over budgets to the next month making it easy to make a few adjustments here and there over time. As part of a monthly review, definitely go through what has been carried over and project out your expected spending for the month to be prepared when things come through. After doing trend analysis and drawing some conclusions, I use the key takeaways to figure out how my budgets could be modified.

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    4. Alerts & Notifications

    On the Overview tab of Mint, there is a section called Upcoming Bills that is really useful for planning purposes. Rather than taking up mind space having to remember when all of your various bills are due each month, I highly suggest taking the time to go through and specify who needs to be paid, the amount and the approximate date for the recurring payment. Trying to figure out the best timing for paying bills in relation to income is always a bit of a hassle. Having Mint visually display spending patterns I find to be a nice feature that allows me to find ways to most efficiently manage my money. Once this information has been specified, Mint will automatically send you reminders that bills are coming due either through email and/or mobile devices. I’m also a fan of some of the other notifications that are sent out as well such as getting paid!

    5. It’s free!

    In my opinion, Mint provides a ton of value at zero cost to the user. There are a few different personal finance applications now available but they often times have a business model that requires subscription such as LearnVest. With so much to offer, I don’t see why everyone and their Mother isn’t using Mint at the least to help bring greater clarity to their financial situation.

    There are a lot of other good functions of Mint but I find some of it to be a little cumbersome and not as useful as one would imagine. For example, the investments section is rather temperamental so I prefer to stick with my actual brokerage or retirement accounts to monitor activity. Also, the goal setting module has not been something that I have not gotten in the habit of using but surely others  find this valuable.

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    As a pre-requisite for self-actualization, money is something that continuously requires our attention. However, the more freedom that we can attain in relationship to this area the more we will be able to place on our higher aspirations. For this reason, I strongly suggest implementing Mint.com in your life if you haven’t done so already!

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    Last Updated on March 4, 2019

    How to Use Credit Cards While Staying Out of Debt

    How to Use Credit Cards While Staying Out of Debt

    Many people will suggest that the best thing to do with your credit cards during these tough economic times is to cut them up with a pair of scissors. Indeed, if you are already in huge debt, you probably should stop using them and begin a payback strategy immediately. However, if you are not currently in trouble with your credit cards, there are wise ways to use them.

    I happen to really love my credit cards so I will share with you my approach to how I use mine without getting into deep financial trouble.

    Ever since about 1983 when I got my first Visa card, I continue to charge as many of my purchases as possible on credit. Everything from gas, groceries and monthly payments for services like my cable and home security monitoring are charged on credit. Despite my heavy usage, I have maintained the joy of never paying any interest fees at all on any of my credit cards.

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    Here are some tips on how best to use your credit cards without falling into the trap of paying those nasty double-digit interest fees.

    Do Not Treat Credit Cards as Your Funding Sources

    Too many people treat their credit cards as funding sources for major purchases. Do not do this if you want to stay out of trouble. I use my credit cards as convenient financial instruments so I do not have to carry around much cash. In fact, I hate carrying cash, especially coins. When you buy things on credit, the purchases are clean and you will not get annoying coins back as change.

    I do not rely on my Visa, MasterCard or American Express to fund any of my purchases, large or small. This brings me to my golden rule when it comes to whether I will pull out any of my credit cards either at a retail or online store.

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    I never purchase anything with my credit cards if I do not have the actual cash on hand in my bank account.

    If I really cannot pay for the item or service with cash that I already have at the bank, then I simply will not make the purchase. Remember, my credit cards are not used as funding sources. They are just convenient alternatives to actual cash in my pocket.

    Make Sure to Always Pay Off Balances in Full Each Month

    The next very important part of my overall strategy is to make absolutely sure that I pay the balances in full each and every month no matter how large they are. This should never be a problem if the cash has been budgeted for my purchases and secured in the bank. I have always paid my full balances each month ever since my very first credit card and this is why I never pay interest charges.

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    Using Credit Cards with Rewards

    Most of my credit cards are of the “no annual fees” type, including one MasterCard on a separate account I keep at home as a spare in case I lose my wallet or incur any fraudulent charges. However, I do use a main Visa card which does have an annual fee because all purchases on that card reward me with airline frequent flyer points. For me, the annual fee is worth it since I do travel and I get enough points to redeem many free flights.

    You have to decide for yourself if you will charge enough purchases on credit each year without paying interest charges to warrant a credit card that rewards you with airline points (or other rewards). In my case, the answer is “yes” but that might not be the case for you.

    I occasionally use a MasterCard or American Express card on small purchases just to keep those accounts active. Also, I have been to the odd retailer that accepted only a certain type of credit card, so I find that having one from each major company is quite handy. Aside from my main Visa card which earns the airline points, the rest of my cards are of the “no annual fees” variety.

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    So this is how I use my credit cards without getting into any financial trouble with them. This strategy is recommended only if you are not in debt, of course. In fact, it is worth keeping in mind once you’re out of debt so that you can keep your credit cards active and treat them responsibly.

    What are your credit card usage strategies? Let me know in the comments — I’d love to hear what methods you use.

    Featured photo credit: Artem Bali via unsplash.com

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