Want to go beyond the old budget spreadsheet and use some automated software? Don't have a budget at all? In this guide you'll learn step-by-step how to create a budget in Mint.
This is part 2 of a series on budgeting. If you haven’t already checked out the first part you can check it out here:
I’ve been using Mint for years. If you don’t already have it, you can sign up for it at: www.mint.com.
I feel like I’ve tried everything. I've worked with spreadsheets. I tried out Quicken a LONG TIME AGO. I've dabbled a bit with Microsoft Money.
When Mint came onto the scene years ago, it was a really new idea and I was super excited.
Many apps have come since then that have similar features, or do parts of it better, but Mint has endured and is still a great overall app for managing your money.
In part 1 of this budgeting series you learned how to create a budget in a spreadsheet. In part 2 we are going to take it to the next level and create a budget in Mint.
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WHY BUDGET IN MINT INSTEAD OF A SPREADSHEET?
In a spreadsheet you can list all of your income, expense categories, expense budgets, goals, etc. BUT…
One thing it doesn’t do very well is compare your actual spending to your budget. It’s possible to do but is much better done in Mint.
Mint has one major advantage over a spreadsheet. It pulls all of your bank transactions for you and imports them. It can ever categorize many of them automatically so it’s tracked against your budgeted amounts.
In this guide I’ll walk you through how to setup a budget in Mint.
ZERO BASED OR ENVELOPE BUDGETING
Just like in part 1 of this budget series, we’re going to create a zero based budget. If you missed the first part, here is a recap of my explanation of exactly how this works:
This will be a “zero based budget.” In normal words, this just means that every dollar you receive as income will be assigned to a budget category. There will be no money not budgeted.
To make it even simpler imagine the old days..
You get your paycheck and take it down to the bank and cash it. So now you’ve got a wad of real cash. Now you take it home and sit down at the dining room table. You pull out a pack of envelopes and mark down all the various things you want to do with that money. Expenses like electricity and possibly savings for a vacation for example.
You stuff that cash in all the various envelopes. You do this until all the cash is gone. This is zero based budgeting. It’s basically assigning every dollar to a job.
Eventually you’ll need to pay the electricity bill or book that vacation and then you’ll pull money out of that envelope and pay for it.
Make sense? Let’s get started with Mint!
STEP 1 - SIGN UP FOR MINT AT MINT.COM
Browse to www.mint.com and click Sign Up.
Mint has an easy sign up screen to fill out.
Once you’re signed up, you can go ahead and login with your email address and the password you created.
STEP 2 - CONNECT YOUR BANK ACCOUNT TO MINT
Next, we need to connect your bank account to Mint.
In the top toolbar in Mint, you’ll find a button for +Add Accounts. Click on this and you will see a search box for banks. Type in the name of your bank and click on it to begin adding your bank to Mint.
You will then receive a popup box to login to your bank. Sign in with your username and password you use to login to your bank's website.
It may take some time, but Mint will import all of your transactions from your bank. Going forward it will even import all new transactions.
This will come in very handy when comparing your spending to your budget.
STEP 3 - ADD YOUR INCOME TO YOUR MINT BUDGET
OK, now let’s get started creating our budget in Mint.
In the top toolbar click on Budget.
Click on the button that says CREATE A BUDGET.
Under Choose a Category, select Income and then Paycheck.
This is a monthly budget so you can leave the next option as Every Month.
Lastly, enter your monthly income for your paycheck. Remember this is your NET INCOME, which just means, it’s the amount that actually deposits into your checking account after all your taxes and other deductions have already been taken out.
Repeat this process for every income you have coming. This can be a variety of things like:
What really separates Mint from a spreadsheet is the awesome power of the automatic transaction categorizing. When you click on your income budget, it will show you all the transactions that fall under that category!
If you have other income it found in your bank transactions it will show them below as Other Income. If they occur every month, consider adding another income category for them. If they are one time transactions then don’t create an income category for them.
STEP 4 - CREATE YOUR EXPENSE BUDGETS IN MINT
Now let’s move on to expenses. We’ll need to add your expense budgets into Mint.
Just like in part 1 we can create the categories on our own manually, but Mint gives us a shortcut that you can use to build your expenses faster. Based on your past expenses it gives you some ideas for possible expenses that you can add by simply click the + sign next to them.
Now let’s begin adding all of you expenses. If you’ve already completed part 1 of this budget series you’ve got all of your expenses already listed out that you can use to create this budget.
If not, let’s get started adding your expenses. Try to think of everything you spend money on monthly. Here is a list of possible expenses to get you started:
Credit Card Debt
Student Loan Debt
Once you know what expenses you want to add, you can begin adding them by clicking on the + CREATE A BUDGET button.
Choose a category from the list.
Select the frequency. This will most commonly be Monthly.
If you like the envelope style of budgeting check the box, START EACH NEW MONTH WITH THE PREVIOUS MONTH’S LEFTOVER AMOUNT. This helps to create an authentic envelope style budget. If you’d prefer to use you budget as a guide and don’t want to get into the details of extra dollars carrying over each month you can skip this box if you’d like.
The last box is the dollar amount. Enter the amount you want to budget for this expense each month. If it varies from month to month, estimate on average what it will be and I would choose a dollar amount on the high side to make sure you have enough money set aside for it each month.
Now, just repeat this process for all of your expenses and you’ll be done. It will look similiar to this when you are done:
The last step is to take a look at the transactions under EVERYTHING ELSE. Click on the categories under this. If the transaction is a monthly expense that was not categorized correctly, go ahead and give it the correct category and will automatically file it under the correct budget expense.
If the transaction is just a one time transaction that doesn’t need to be budgeted for, you can leave it there.
STEP 5 - CREATE YOUR GOALS IN MINT
Once all of your income and expenses are added, you will have a number on the right side or at the bottom of your budget. You will see a category that says, LEFT OVER. This is the amount of money left over that can be used for your goals.
Now, if your LEFT OVER is negative or near $0, your goal should be to increase your income and/or lower your expenses. Your budget is too tight! It’s hard to live that way and you shouldn’t have to.
Review those expenses. Is there anything you can get rid of or don’t need? Take a hard look and try to decrease those expenses while increasing your LEFT OVER money.
Another option is to increase your income by possibly starting a side hustle or even asking for a raise at your job.
If your LEFT OVER is positive, it’s time to set some goals. You’re paying for your day to day expenses and entertainment and still have some money left over. Let’s apply that to some goals for the future.
To create your first goal, click on ADD A GOAL NOW… at the bottom of your budget.
You will have several goal options presented to you automatically:
Pay off Credit Card Debt
Pay off Loans
Save for an Emergency
Save for Retirement
Buy a Home
Buy a Car
Save for College
Take a Trip
Improve my Home
Create a Custom Goal
Choose a goal that you want to work towards and if you don’t like any of their options you can always create a custom goal.
I’m going to create one goal to build a small emergency fund over the next 6 months, so I click on the goal: SAVE FOR AN EMERGENCY.
Mint provides a great step by step guide to creating your goals with simple questions.
On the next screen I enter the amount I spend on average monthly: $2,000.
I personally keep only about 1 month of expenses in my checking account and the other 5 months in my Robinhood account for investing, so I’m going to select 1 month. I could create another emergency fund goal to fund my other 5 months of living expenses in Robinhood separately.
I click NEXT to move to the next screen.
I choose use an existing account and select my checking account because I want to have quick access to my emergency fund if needed. At least the first month of emergency expenses. After that I can always transfer from Robinhood back to my checking account within a week if needed.
You can also select a different account, like a savings account if your prefer to keep it separate from your checking account.
I click NEXT to move to the next screen.
On the final screen, I leave the name as is and adjust the date to about 6 months away. Mint automatically calculates how much I’ll need to save. I click SAVE GOAL and then CLOSE.
The goal is now created so I can be sure to save that amount each month to reach that goal.
Repeat this process for any other goals you want to create until your LEFT OVER money in your budget is near $0.
STEP 6 - BUILD A HABIT TO MONITOR YOUR MINT BUDGET
Now that you have a budget, you have to maintain it and live by it. Sometimes, even adjust it when it’s not working for you.
Your budget should work for you, not the other way around.
I highly recommend taking a look at your budget and transactions in Mint one time per day, or at a minimum one time a week.
CHECK YOUR TRANSACTIONS IN MINT
Review all you transactions. Make sure that the categories are right so that the transaction is assigned to the right category in your budget. Most of the time, Mint will do it automatically for you and even get the category right.
Sometimes Mint is wrong and you’ll need to create a quick adjustment of the category but, it usually gets it right. It’s definitely a lot better than manually entering those transactions for sure.
ADJUST YOUR BUDGET IN MINT AS NECESSARY
Finally, feel free to adjust your budget. Your budget should work for you, not the other way around.
If you're constantly going over budget in one category but not another, simply increase one and reduce the other. Make changes as necessary. It’s not set in stone.
PREPARE TO BE IN CONTROL OF YOUR MONEY
A budget sounds boring and tedious initially, but once you are living with a budget it gives you a sense of control over your money and financial life. I think you will find the benefits far outweigh the work you put into.
Enjoy your budget and as always feel free to reach out to me with any questions or comments!
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