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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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    Published on September 17, 2018

    How Being Smart With Your Money Leads to Financial Success

    How Being Smart With Your Money Leads to Financial Success

    Achieving financial success is not something that just happens. Maybe if you win the lottery or something, but for the average person like you or me, it comes from a series of small steps you take over a long period of time.

    With each step, you form a new smart money habit. And with each smart money habit, you build towards financial independence.

    So what sort of habits can you form to get on that path? Let’s take a look at smart money habits you can start today to get you closer to a financially independent future.

    1. Avoid being “penny wise but pound foolish”

    It’s tempting to try saving a couple cents here and there when buying small items. However, that’s not where the real money is saved. You’re putting in extra effort for something that doesn’t move the needle.

    You get the most bang when you’re able to cut down on your bigger bills. For example, finding a lower interest rate for your mortgage could save you $50+ per month. And cutting your transportation bill by purchasing a cheaper car or taking public transportation can provide large gains as well.

    So, look at your recurring expenses such as housing, transportation, and insurance, and see where there’s wiggle room. It’s a much better use of your time than trying to pinch pennies here and there on smaller purchases.

    2. When you want something big, wait

    Impulsivity can get you in trouble in most aspects of life. Finances are no different.

    It’s human nature to see something and want it right then and there. It starts as a kid in the checkout line at the grocery store, and it continues on through adulthood.

    We get an idea in our head of something we want, and it’s hard not to go out and get it right then.

    A good example is wanting a new car. Perhaps you’ve had your car for several years. It’s crossed the 100k mile mark. Maybe maintenance is due, and you’re annoyed that you need to replace the timing belt or purchase new tires.

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    So, you get the itch.

    You start digging around online, and you realize you could trade in your current car for something newer and more exciting… all for a few hundred bucks a month. Then you get obsessed.

    Here’s where you have to take a step back.

    Your newfound obsession is clouding your judgement. Rather than giving into the impulse, wait it out.

    Set a timeframe for yourself. Maybe you come back to the decision three months down the road. See if the obsession lasts.

    It might, but often, a funny thing happens. Often, you forget about it. And often, you find that the new car wasn’t a need at all.

    The impulse faded. And you just saved yourself a ton of money.

    3. Live smaller than you can afford

    You finally get that big raise. And you want to celebrate – and why not?

    You’ve been looking forward to this forever. And after all, it was all due to your hard work.

    That’s fine, splurge a little. However, make it a one-time deal and be done.

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    Don’t get caught in the trap that just because you’re now making more money, you should spend more.

    Too often, people get more money and feel like they that gives them the means to buy a bigger house, a bigger car… you know the drill. Resist.

    The fact is that living smaller than what you can afford is one of the fastest ways to build savings.

    But if you constantly upgrade as you begin to make more, then you’ll never get ahead. You’ll just build up more debt along the way and have just as little wiggle room as before.

    4. Practice smart grocery shopping

    Food… it’s one of the biggest portions of any budget. And if you’re not careful, it can be one of the biggest drains on your wallet.

    But luckily, there are a few things you can do to ensure that you stay smart with your money when buying groceries.

    Create a grocery budget

    Set a strict weekly grocery budget. When you know how much you can spend on groceries, you can then plan your weekly menu around it.

    Once you know what all you need, you can go shopping and keep a running tally as you shop to ensure you’re on track.

    I tend to do this in my head, rounding for each item. However, writing it down as you go would probably work best for most people.

    Make a list… and never deviate

    Never go to the grocery store without a list. If you go to the store with a ballpark idea in mind, you don’t have a true ide of what you need.

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    You’re not well-researched. You don’t know what the sales are. As a result, you’re going to make decisions on the fly.

    These impulse decisions will lead to overspending, which will derail your grocery budget.

    Eat before going grocery shopping

    It’s also important to eat prior to going to the grocery store. Hunger is a powerful force.

    If you’re shopping on an empty stomach, everything is going to look good. In particular, you may find a lot of ready-made, processed snacks will look enticing.

    After all, you’re hungry now and that food is easily available. So subconsciously, you may lean towards those items.

    Unfortunately, not only are those items typically less healthy, but they’re likely more expensive. You pay for convenience.

    However, when you eat prior to shopping, then you’ll shop with a clear mind. Your hunger won’t cloud your judgement, influencing you to make poor decisions like a cartoon devil resting on your shoulder whispering in your ear.

    This makes it much easier to stick to your grocery plan.

    5. Cancel your gym membership

    Now that you’re all set on your food, it’s time to get smart about managing your budget in terms of physical fitness. And let’s begin by avoiding the gym. The gym bill, that is.

    The average gym membership costs around $60 per month. That’s $720 a year.

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    Yet, two out of three gym memberships go unused. That means two-thirds of people who have a gym membership are literally giving away almost a thousand bucks a year. It’s crazy!

    I recommend seeking an alternative. One good alternative is to look into fitness streaming services.

    Streaming services allow you to stream hundreds of workouts like Insanity and p90x, right in your own home for around $10-20 a month. That’s $40-50 less a month than the average gym membership.

    Of course, then there’s the free option. The internet is full of free workouts that you can do on your own with minimal or no equipment.

    For example, there’s the Couch to 5K program, that I personally used a decade ago to ease myself from couch potato to running my first 5K race. If I could do it, anyone could.

    Then there are free resources like reddit that have limitless information on workouts. The Fitness subreddit has done all the research for you, populating workout tips and detailed workout routines for anyone to use in their wiki.

    There are several routines that require no equipment. And you can join in on the subreddit to become part of the community, making it easier for those seeking comraderie and encouragement in their fitness goals. All for free.

    It’s baby steps… And baby steps can start now!

    I’ve never met anyone that can’t stand to be a bit smarter with their money. And on the flip side, anyone can get smarter with their money. But remember, it doesn’t happen all at once.

    Begin by fighting your impulses. Prepare for the week and be smart at the store. And cut monthly expenses like gym memberships that are overpriced and you probably aren’t getting your money’s worth out of anyway.

    The devil is in the details. And the details can change your lifestyle and prep you for a financially independent future.

    Featured photo credit: Unsplash via unsplash.com

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