One of the biggest reasons behind my family’s financial missteps over the past year – and probably the biggest factor that prevented us from getting started on a solid budget – was organizing our finances. Between my husband and I, we had seven jobs, six credit cards, three retirement accounts at two different brokerages, several different bank accounts, and our mortgage. It was a lot to manage, especially as each account was funneled through a different financial institution. Keeping track of all of them felt overwhelming, particularly because my husband had left it all on my plate.
I’d read a lot about this website – from other personal finance bloggers, from some of my favorite magazines, from friends who had used it to get all their financial accounts in one place. I’d always thought that I had it all together, that I didn’t need that type of help.
Turns out, I was wrong. I did need that kind of help: not because I was dumb or uneducated, but because it was simply easier. Let me show you what I mean.
(Disclaimer: I am in no way affiliated with Mint.com. This is not a product review or a sponsorship; I’m simply sharing with you a tool I’ve found that helps me with budgeting.)
Organizing Your Finances
As I said earlier, I have a large number of accounts. Logging on to each individual account, through nearly two dozen different websites, used to take me the better part of an hour. Most of this time was spent simply navigating the web, typing in passwords and usernames, physically logging in and out of each site.
It was a pain in the you-know-what.
When you set up a free account on Mint.com, one of the first steps is to link your financial accounts (checking, savings, brokerage and any personal loans you might have). I thought this itself would be a cumbersome process, but it surprisingly wasn’t. All I needed was the log-in information for each account, something I already have stored up in my head. It only took me about ten minutes to connect all my financial accounts to Mint.
Now, I can check the status of every single one of my accounts by logging on to Mint instead of each site individually.
Starting a Budget
When you link your accounts with Mint.com, you give Mint access to the information those accounts contain. This means Mint can see what you spend money on. Mint, in turn, automatically categorizes those purchases, allowing you to see not only how much you’re spending month to month, but exactly where that money is going to. On top of of keeping track of your monthly budget, Mint.com also helps you reduce your spending by starting a budget for the next month that’s 20% less than the previous month. You can also set your own budget, either for overall spending or for individual categories.
Setting Financial Goals
My husband and I have some big goals we’d like to meet over the next few months. And, like so many big dreams, they’ll cost some big money. Setting financial goals has always been something my husband and I do on a regular basis – whether it’s saving for a new car or putting money away for retirement – but we struggled keeping track of how much money we were actually saving. It was kind of like those ING commercials, where people blindly throw money at their retirement accounts, without knowing how much they’ll need or having a concrete plan of attack to get from point A to point B.
With Mint, we’ve been able to set up specific financial goals. For example, we want to increase the amount we’ve saved for a down payment on our next home, which we’ll likely be buying in the next year. Mint can help us keep track of of our goals, as well as outline what we’re doing to get there; the site also gives us encouragement and reminders along the way – small things that make a big difference for us.
One of my favorite features of Mint is that it monitors a lot of my financial information. I’m able to set up alerts, which will let me know if I’m close to overdrawing my bank account, going over my credit limit, late on a payment, etc. Mint will also let me know if an unusually large purchase is made using my credit cards, an extra layer of protection on top of what my credit card itself offers.
Mint also monitors my house and cars for changes to their value, and from time to time shares offers on ways to reduce my expenses, such as through refinancing a loan or consolidation.
Do you use any type of software or website for organizing your finances? Which one(s)?
Next week, I’ll be unveiling the actual monthly budget my husband and I created with the help of Mint!