Understanding Budget Planning

Understanding budget planning »

Know where you stand.

The first step in knowing where you’re going is to figure out where you’ve been: to know how much you have in your checking and saving accounts and how much you’ve been spending. In the past, this was the most difficult step. You had to collect all your receipts for a few months and pull together a spreadsheet to try to glean some insights. Now, you can know everything in five minutes when you use Mint to collect, categorize and analyze your spending.

Cut back where you can.

A lot of people have one or two places where they overspend. We recommend that before you set a budget, you let Mint show you how much you’ve actually spent in the past. Chances are you’ll see a couple of expenses that will surprise you. Maybe you’re still paying for services you no longer use. Perhaps there are some spending categories where you can definitely cut back. (Two lattes a day?) Focus on the two or three spending categories where you’d like to cut back.

Make a realistic plan.

Trying to cut back on everything all at once just leads to frustration. Shoot for a 10-20% reduction in the two or three categories you’ve identified. If you try to cut back from $500 a month on restaurants to nothing but brown bag lunches, you’re all but certain to give up. Try going from $500 to $450 and you just might find yourself coming in under budget. One easy way is to use Mint to compare your spending with others in your neighborhood. If you spend way more on food than your neighbors do, it ought to be easy to cut back a little. Your overall goal should be to spend no more than 90% of your income so that you can save the other 10%. And remember that we’re talking about income after taxes. Yes, taxes also need to be accounted for if you want to be realistic.

Track your progress.

Once everything is set up, you need track your spending against your budget each month. This is where Mint can really help. Mint tracks your spending automatically and compares it against the budget you’ve created. Ask Mint to send you an email or text message if you want help staying on track. That way, there’ll be no month-end surprises.

Budgeting is easier with Mint.

Mint pulls together all of your spending into one place, with automatic categorization and helpful charts. And our budgeting tools make budget planning a snap.
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Want to learn more? Read more in this section about Creating a Budget, Tracking a Budget, and Tools You Can Use.