Advertising
Advertising

How to Get Started Managing Your Money with Mint

How to Get Started Managing Your Money with Mint

Budgeting can be very frustrating because you can waste a lot of time managing your budget without ever actually analyzing your budget!  If you’re spending all of your time collecting and categorizing data, you might never get to the true purpose of budgeting, which is to save money.

The most important aspect of budgeting isn’t necessarily sticking to it (although that is important), the real purpose is to feel in control of your money and gain understanding about where it goes.  In fact, you can’t create a realistic budget unless you first know what is happening; until you have several months of spending data, it’s pointless to try.

Advertising

For anyone who has struggled with budgeting in the past, I recommend Mint, which is free personal finance software.  Mint is a great tool for helping you track your spending as well as track other areas of your finances.  And for the person who doesn’t enjoy budgeting, it’s easy to use for expense tracking without getting distracted by a lot of the other bells and whistles.

Advertising

Here is my 5-point plan to start Mint simply:

Advertising

  1. Only Connect Spending Accounts.  In Mint, you are able to connect virtually any account you have—in addition to bank accounts, you can set up investment accounts, mortgages, student loans, and more.  But this is a distraction.  If you’re using Mint to track spending, only connect your checking accounts and charge accounts.  This way, you will concentrate only on spending data when you log in.
  2. Delete The Budgets.  You know what your monthly rent is, so you don’t need a budget to track that.  And most people don’t “overspend” on things like gas, electricity and utilities, so why would you need a budget for it?  You really just want to know what you’re spending in a given area, which you can always find in the Trends tab.  So delete the budgets until you have a couple of months’ of data, and then you can add back budgets for the things you want accountability for, like Eating Out and Shopping.
  3. Always Use Rules.  Mint has fantastic auto categorization, but you’ll still need to get in there once every couple of weeks to categorize stuff it doesn’t recognize.  When you do this, make sure that every time you categorize you also click the “Rule” check box that tells Mint to always categorize future purchases from that vendor the same way.
  4. Leave ATM Withdrawals Alone.  People always wonder if they should try to categorize their ATM cash.  Unless you discover that ATM withdrawals are excessive, I recommend just leaving it how Mint categorizes it, which is as ATM Withdrawal.  If you know you just spend on one category, you might end up easily categorizing it, but leaving it “as is” is the simple way to go.
  5. No Split Categorization.  I think if you are trying to apply multiple categories to one transaction—like a trip to Target or Costco—you’re trying too hard.  Choose one category, like Home Supplies, and stick to that.  The issue is never that you’re over your Shampoo budget; it’s that you went to Target 4 times in a month!  Split categorization doesn’t give you more clarity in that situation.

If you adhere to these five rules, you’ll have plenty of time to review the Trends tab in Mint to gain more clarity over your spending; and then you’ll be able to act strategically to positively affect your cash flow.

(Photo credit: Accounting via Shutterstock)

Advertising

More by this author

How to Get Started Managing Your Money with Mint

Trending in Money

1 The Best Ways to Save Money Even Impulsive Spenders Can Get Behind 2 How to Answer the Tough Question: What are Your Salary Requirements? 3 How Personal Finance Software Helps You Get More Out of Your Money 4 The Definitive Guide to Get Out of Debt Fast (And Forever) 5 35 Real Ways to Actually Make Money Online

Read Next

Advertising
Advertising

Published on November 20, 2018

The Best Ways to Save Money Even Impulsive Spenders Can Get Behind

The Best Ways to Save Money Even Impulsive Spenders Can Get Behind

The truth is, there are many “money saving guides” online, but most don’t cover the root issue for not saving.

Once I’d discovered a few key factors that allowed me to save 10k in one year, I realized why most articles couldn’t help me. The problem is that even with the right strategies you can still fail to save money. You need to have the right systems in place and the right mindset.

In this guide, I’ll cover the best ways to save money — practical yet powerful steps you can take to start saving more. It won’t be easy but with hard work, I’m confident you’ll be able to save more money–even if you’re an impulsive spender.

Why Your Past Prevents You from Saving Money

Are you constantly thinking about your financial mistakes?

If so, these thoughts are holding you back from saving.

I get it, you wish you could go back in time to avoid your financial downfalls. But dwelling over your past will only rob you from your future. Instead, reflect on your mistakes and ask yourself what lessons you can learn from them.

It wasn’t easy for me to accept that I had accumulated thousands of dollars in credit card debt. Once I did, I started heading in the right direction. Embrace your past failures and use them as an opportunity to set new financial goals.

For example, after accepting that you’re thousands of dollars in debt create a plan to be debt free in a year or two. This way when you’ll be at peace even when you get negative thoughts about your finances. Now you can focus more time on saving and less on your past financial mistakes.

Advertising

How to Effortlessly Track Your Spending

Stop manually tracking your spending.

Leverage powerful analytic tools such as Personal Capital and these money management apps to do the work for you. This tool has worked for me and has kept me motivated to why I’m saving in the first place. Once you login to your Personal Capital dashboard, you’re able to view your net worth.

When I’d first signed up with Personal Capital, I had a negative net worth, but this motivated me to save more. With this tool, you can also view your spending patterns, expenses, and how much money you’re saving.

Use your net worth as your north star to saving more. Whenever you experience financial setbacks, view how far you’ve come along. Saving money is only half the battle, being consistent is the other half.

The Truth on Why You Keep Failing

Saving money isn’t sexy. If it was, wouldn’t everyone be doing it?

Some people are natural savers, but most are impulsive spenders. Instead of denying that you’re an impulsive spender, embrace it.

Don’t try to save 60 to 70% of your income if this means you’ll live a miserable life. Saving money isn’t a race but a marathon. You’re saving for retirement and for large purchases.

If you’re currently having a hard time saving, start spending more money on nice things. This may sound counterintuitive but hear me out. Wouldn’t it be better to save $200 each month for 12 months instead of $500 for 3 months?

Advertising

Most people run into trouble because they create budgets that set them up for failure. This system won’t work for those who are frugal, but chances are they don’t need help saving. This system is for those who can’t save money and need to be rewarded for their hard work.

Only because you’re buying nice things doesn’t mean that you’ll save less. Here are some rules you should have in place:

  1. Save more than 50% of your available money (after expenses)
  2. Only buy nice things after saving
  3. Automate your savings with automatic bank transfers

These are the same rules that helped me save thousands each year while buying the latest iPhone. Focus only on items that are important to you. Remember, you can afford anything but not everything.

How to Foolproof Yourself out of Debt

Personal finance is a game. On one end, you’re earning money; and on the to other, you’re saving. But what ends up counting in the end isn’t how much you earn but how much you save. Research shows that about 60% of Americans spend more than they save.[1]

So how can you separate yourself from the 60%?

By not accumulating more debt. This way you’ll have more money to save and avoid having more financial obligations. A great way to stop accumulating debt is using cash to pay for all your transactions.

This will be challenging, depending on how reliant you are with your credit card, but it’s worth the effort. Not only will you stop accruing debt, but you’ll also be more conscious with what you buy.

For example, you’ll think twice about purchasing a new $200 headphone despite having the cash to buy them. According to a poll conducted by The CreditCards.com, 5 out of 6 Americans are impulsive spenders.[2]

Advertising

Telling yourself that you’ll have the discipline to not buy things won’t cut it. This is equal to having junk food in your fridge while trying to eat healthy–it’s only a matter of time before you slip. By using cash to make your purchases, you’ll spend less and save more.

A Proven Formula to Skyrocket Your Savings

Having proven systems in place to help you save more is important, but they’re not the best way to save money.

You can search for dozens of ways to save money, but there’ll always be a limit. Instead of spending the majority of your effort saving, look for ways to increase your income. The truth is that once you have the right systems in place, saving is easy.

What’s challenging is earning more money. There are many routes you can take to achieve this. For example, you can work long and hard at your current job to earn a raise. But there’s one problem–you’re depending on someone else to give you a raise.

Your company will have to have the budget, and you’ll have to know how to toot your own horn to get this raise. This isn’t to say that earning a raise is impossible, but things are better when you’re in control right? That’s why building a side-hustle is the best way to increase your income.

Think of your side-hustle as a part-time job doing something you enjoy. You can sell items on eBay for a profit, or design websites for small businesses. Building a side-hustle will be on the hardest things you’ll do, be too stubborn to quit.

During the early stages, you won’t be making money and that’s okay. Since you already have a source of income, you won’t be dependent on your side-hustle to pay for your expenses. Depending on how much time you invest in your side-hustle, it can one day replace your current income.

Whatever route you take, focus more on earning and save as much as possible. You have more control than you give yourself credit for.

Advertising

Transform Yourself into a Saving Money Machine

Saving money isn’t complicated but it’s one of the hardest things you’ll do.

By learning from your mistakes and rewarding yourself after saving you’ll save more. What would you do with an extra $200 or $500 each month? To some, this is life-changing money that can improve the quality of their lives.

The truth is saving money is an art. Save too much and you’ll quit, but save too little and you’ll pay for the consequences in the future. Saving money takes effort and having the right systems in place.

Imagine if you’d started saving an extra $100 this next month? Or, saved $20K in one year? Although it’s hard to imagine, this can be your reality if you follow the principles covered in this guide.

Take a moment to brainstorm which goals you’d be able to reach if you had extra money each month. Use these goals as motivation to help you stay on track on your journey to saving more. If I was able to save thousands of dollars with little guidance, imagine what you’ll be able to do.

What are you waiting for? Go and start saving money, the sky is your limit.

Featured photo credit: rawpixel via unsplash.com

Reference

Read Next