Whether you’ve recently decided to upgrade your budgeting spreadsheet to something a bit more automated or you just landed your first job out of college and know you need to get more serious about your money, you’ve come to the right place.
Before starting a budget, log in and make sure all of your accounts are linked to Mint – especially the ones you use on a regular basis (ahem, credit cards included). Once these accounts are linked, head over to budgets and Mint will already have a view of what your current spending looks like in budget form.
Now, let’s walk through a few tips for optimizing budgets in Mint:
Step 1: Know exactly how much you bring in … really!
Think beyond your annual salary. Base your budget on your take home pay (aka, what actually ends up in your checking account) each month.
Pro Tip: Mint goes by the date the income comes in – if you get paid on the 31st but you want that to count toward the next month’s budget, you can adjust the date on the transaction level.
To adjust the total amount of income you expect in the current month by clicking the arrows left or right or clicking on edit.
Step 2: Check the budget categories that have fixed expenses
If you pay rent or a mortgage and it’s the same amount every month, check to make sure this is reflected accurately in your budget.
Look at the other categories that may be the same – car payment, utilities, cable. Mint can automatically recognize a lot of these, but do a quick review and make sure they’re all there!
Step 3: Check the categories that are variable expenses
Across various categories, your budget may change month-to-month, so this is where you will find wiggle room in your spending and cash flow – but be realistic with yourself. If Mint shows you generally spend $600 per month on food and you reduce this part of your budget by half – take a moment to think about the kind of commitment this requires. Unrealistic goals now will likely compromise the overall benefits of setting budgets in the first place, making other goals around savings or reducing debt more difficult – bummer!
This also includes things you may not necessarily think to budget for:
• Pet expenses (food, vet, grooming)
• Personal care (Acupuncture? Barber? Nail salon?)
• Shopping (Is it realistic to say you’re going to go the next 6 months without shopping? If not, work it into your budget), etc.
In Mint, you can set up your budget to be spread over a period of time versus just a particular month – so if you know you won’t need to spend $60 on dog food every month, but instead every two months, it will spread this out accordingly in your budget too.
Step 4: Account for savings, debt pay off and other goals
Once you’ve set all of your fixed and variable expenses, head to the goals section.
Do you have a credit card that you’re carrying a balance on? Add this to a goal – you’ll be amazed at how easy it is to check your progress as your monthly payments make a dent in paying off this debt. If you’re not happy with the end pay off date, make adjustments to the total payments you are able to make on a monthly basis. Do the same with your savings goals and any other goals you may have.
Once you’ve set your goals, now head back to budgets! This is when the fun begins.
Step 5: Adjustments and Extra Expenses
Now that you’re back on the budgets page, take a look at the right-hand column calculating your total expenses – including your goals – deducted from your total income.
If you’re in the red, you have some work to do – but don’t be overwhelmed – you will find your wiggle room and we’re here to help!
Go back and look at your variable expenses.
It can be challenging and even overwhelming to imagine cutting back in certain areas you are used to spending, but this is where the old question “Do you really need a latte every day?” comes into play. Ask yourself:
• Are you on the right mobile plan (are you using enough minutes to justify your current package?)
• Can you go without cable? Check out this article on cutting the cord!
Our blogger, Farnoosh Torabi, has helped other readers find their wiggle room. One reader was able to reduce their overall acupuncture visits and changed from an expensive supermarket to a more affordable one to find her wiggle room.
Comb through and be firm with yourself, yet realistic.
If you’re in the green, this is awesome! Take another look at your variable expenses and ensure they are realistic to meet. Ask yourself:
• Do you have 3 to 6 months worth of savings in case of an emergency?
• Are you putting enough toward retirement?
• What other savings goals do you have?
You’re in a position now to work toward accomplishing some of these!
Step 6: Ongoing Maintenance
While working toward specific goals, be sure to check in and track your progress. Check in with Mint, ensure your transactions are falling under the right buckets and categorize the ones we couldn’t recognize. This will give you a clear visual of where you are with each category so you can make smart decisions in-the-moment with your money.
And don’t forget – we are here for you! Reach out to us via Facebook and Twitter or through our support team. Or, reach out to our blogger, Farnoosh Torabi, for her AskFarnoosh series: firstname.lastname@example.org.