Saving A Mint By Budgeting

I’m a fan of budgeting, in case you couldn’t tell by my monthly posting of my personal budgets. I think that budgeting is the only true way of actually seeing how much money is coming in and how much money is going out. Until you actually track your budgets for a few months, it’s all guesswork as to how much you actually spend on items. Loose change in the pockets can disappear pretty quickly on trivial purchases that add up over time.

I started budgeting in the latter part of last year and I got very serious about it starting January 1, 2011. I don’t really make New Year’s Resolutions, but I did make it a personal goal to track EVERY SINGLE DOLLAR that I make and spend. This sounds like a difficult task, but I assure you it’s easy once you get started. Besides, I’d rather put in a little work to know where all my money is going, then to stress out about how much money I’m actually spending on things.

Getting started on Mint is relatively easy. I’m not really a cheerleader for the company, and I’m not making any money to write this article. However, using the service Mint provides has been integral in being able to get my finances under control and really “take charge”. You start by initiating an account, and then you add links to your bank account, credit cards and other debt holders, auto loan, mortgage, brokerage. You can also add assets to track your net worth. I don’t really use Mint to track my net worth, but it’s a helpful tool if you take advantage of it. One of my main concerns with using Mint was having all my financial information in one place. I still have a small concern with this, even after using for over 6 months. They do have bank-level security, and you can read more about that on their website.

Once you have all your accounts uploaded, the next thing to do is to create individual budgets or income/expense categories. Once you start earning income and making purchases you file these transactions in the appropriate budget. After you do this one time, Mint remembers the transaction and will automatically file the transactions in the appropriate budget every time thereafter. This makes recurring income/expenses very easy to track, and really puts your budgeting on auto-pilot. Here’s an image from my Mint account for May’s budget:

So, as you can see it’s very easy to track your expenses once you set these individual budgets up. Think of Mint like one of those old-fashioned coin counters where you put the coin in the top hole and the quarters/dimes/nickles automatically sort themselves based on size. That’s what this program does for you. It automatically sorts all your transactions. All you do is create budgets and name them accordingly. The only thing that Mint can’t account for is cash transactions. Every time I use the bus, I have to log on to Mint and post my cash transactions. This could be a painful and time consuming exercise for someone who uses a lot of cash, but in today’s society I highly doubt many people still use cash for most transactions. I log on every few days and post all my cash transactions, which is relatively easy as I don’t use cash and I don’t have many transactions in a month anyway.

Even if you decide to use a different program to track your budgets, or even if you resort to an old-school paper budget, it doesn’t really matter. The point is to track your income/expenses in a manner that makes sense to YOU. If you find it easy, and it works…then keep doing it. If you’re not budgeting EVERY SINGLE DOLLAR, then you need to start today. Once I looked at my spending and realized where I was out of control, it was easy to target expense categories and trim where necessary. For instance, when looking at my budgets and realizing that auto expenses were accounting for almost 1/3 of all monthly expenses I decided it was time to rid myself of an automobile altogether and get my spending in that category under control.

Any readers out there use Mint or other budgeting tools?

Thanks for reading.

Photo Credit: Mint