It's around this time of year -- after more-than-intended gift spending and holiday travels -- that bank statements tend to get more of an eyebrow-raise than usual.
Mint.com, a free personal finance site, is one of the most popular choices for budgeting and record-keeping, thanks to its clean interface and long-standing reputation. Whether you're new to the service or want to get more out of it, here are some best practices.
Sync all your financials
Mint works best when it can see your entire financial picture. That means entering all accounts, including savings, checking and even credit cards. But don't stop there: Any student loans, car loans and mortgages should be entered, too. And to make sure your net worth is accurate, take a moment to add in your assets, such as cars and real estate.
Once that data is entered, Mint can more accurately suggest budgets, goals and display your net worth.
Mint's most valuable tool, at least for me, is Goals, which can be accessed from the desktop website (the tool isn't yet available for mobile). Goals is a well-designed tool that automatically tells you how to best allocate your money based on what you'd like to accomplish.
For instance, let's say you have two debts to eliminate -- student loans and a credit card balance. If you create a goal to pay off your debts (that's a goal type you can choose from the tool), and indicate how much you'd like to put against those balances each month, Mint will automatically tell you how to distribute that money based on the interest on each loan and credit card.
There's even a useful (and somewhat scary) slider that calculates how much interest you'll pay over time. Of course, the more money you put toward the debts, the less time they'll take to pay off, and the less interest you'll have to pay.
There are similar automated goal tools for purchasing a home, creating an emergency savings account and even saving for sizable purchases, like a new computer.
Keep transactions in check
After you've configured your budgets, Mint will keep track of how you're doing by automatically categorizing transactions as groceries, gas, utilities, entertainment and so on. But Mint doesn't always get things right and sometimes, it leaves things uncategorized. Leaving transactions inaccurately categorized not only makes your budgets less useful, but it also affects your Trends.
Once or twice a week, take moment to review your transactions and make sure they're properly categorized. You can do this in the app or online.
In addition to categorizing your transactions, you can also add Tags. The two available by default are Vacation and Reimbursable. Reimbursable is especially useful because if it is a business expense, tagging the transaction as such will exclude it from your budgets.
You can also create your own tags and set them to exclude any associated transactions from your budgets by going to Accounts > Hide on the Mint desktop site.
Tips for tracking cash
Keeping track of cash is one of the most common challenges, but there are a couple straightforward solutions.
Option 1: The first strategy (and the one I use) is to set a budget for Cash & ATM, and forego tracking cash transactions entirely. You can even go as far as deciding to solely use your cash for restaurants and coffee, for example, and let your Cash & ATM budget reflect that.
Option 2: This one is a little more labor-intensive, but valuable if you want to get a precise analysis of your financials. Each time you spend cash, head into the Mint app, tap the + symbol in the upper-right corner, and enter the transaction.
If you take this approach, just be sure to delete or exclude any cash withdrawals so that Mint doesn't think you're spending twice as much as you are.
Between the Mint app and the website, you should have plenty of access to your data. If you want to get even more out of Mint, check out some of the third-party add-ons:
- Mint Quick View (Mac): Add Mint to your Mac menu bar.
- Mint for Windows: A Mint app for Windows 8.1 desktops.
- Mojito: A Chrome extension that lets you customize the Mint layout, prevent it from logging you out, and more.