The belief that ‘Money is for Living’ sits at the heart of what we do here at Mint, which has helped us become the financial solution for nearly 5 million Americans. As the country enters the third year of the Great Recession, and people are making New Year’s Resolutions, we checked in to see how users are preparing and found some pretty fascinating statistics that frankly make me proud.
A great place to start as people are assessing their goals for the New Year is, well… Mint Goals, launched this summer to help people achieve what they want in life. We help people understand how much they need to save, develop a plan to achieve specific goals more quickly, and track their progress. We currently have nearly one million Goals active in the product, and the most popular by far is “Pay Off Debt.” No surprise, given how consumer debt burdens the country.
Looking at how the Goals rank, I ‘m proud to see people are making sound decisions based on the fundamental principles of personal finance. The top goals are for essentials – a clean slate and protection of their backside – so users can feel secure in taking the next step to achieve what they want in life.
The top three Goals set by Mint users:
1. Pay off Debt
2. Emergency Fund
One of the things we enabled with the launch of Goals was for people to tie their day-to-day spending to long-term Goals – showing dollar-for-dollar how budget adjustment impact when they’ll achieve what they’re working toward. Suddenly, the latte vs. regular coffee debate takes on more meaning, when one sees the change in daily spending could mean retiring years sooner, or leaving for vacation with the entire thing paid for in advance.
To keep budgeting simple – and make it something you can stick to – we recommend finding one or two problem areas where you can cut back. For our users – and for myself personally – that often means food! Six of the top ten budgets set by users relate to food and dining – from groceries to fast food to alcohol and bars. The best thing is that it’s an area where you can really control spending with a few adjustments, like cooking more, ordering takeout instead of sitting to eat, or buying ingredients in bulk. Great news is that our data shows people are making the changes they need to stay within budgets, with great success:
Top Mint budgets and the percentage of people who stuck to them last month:
1. Groceries 64 percent budget compliance
2. Restaurants 67 percent budget compliance
3. Gas & Fuel 67 percent budget compliance
4. Fast Food 66 percent budget compliance
5. Entertainment 74 percent budget compliance
6. Clothing 64 percent budget compliance
7. Movies & DVDs 80 percent budget compliance
8. Alcohol &Bars 77 percent budget compliance
9. Coffee Shops 75 percent budget compliance
10. Food & Dining 40 percent budget compliance
The compliance numbers make me really proud, because it shows that we have created a tool that helps the majority of our users set and stick to budgets. In fact, a full 59 percent of Mint users stayed within all their budgets for consecutive months heading into this holiday season.
The two biggest problem areas for people were shopping and food & dining – both discretionary areas over which people have control, and both difficult to stay within during Thanksgiving and early holiday shopping. But as a refresher for people looking for a fresh start in the New Year:
Mint.com’s Three Principles of Personal Finance
1. Spend less than you earn. To do this, you need to see where you spend – whether with a free online software like Mint.com, a desktop solution like Quicken, or with pen and paper, getting a true, clear picture of where money goes is the necessary first step toward better financial decisions.
2. Make money work for you. Optimize rewards and interest rates on all your financial relationships, or you’re straight up leaving money on the table.
3. Protect your downside. Too many people were caught unprepared for job loss in these past years, without an emergency fund or the proper insurance to keep them safe. Be sure you’re prepared for the unexpected.
Dropping Debt – for Cold, Hard Cash
If the data’s not compelling enough to prompt a financial resolution in the New Year, Mint.com has thrown in additional incentive to get people started. The Drop Your Debt challenge pits city teams against one another to see which city can most improve its debt-to-savings ratio.
The ten selected cities are listed below according to the current rank of the contest, but anyone can still join. The two largest awards will be granted regardless of locale: for the person who refers the most people to the contest ($5,000), and in four random drawings of $1,200 apiece. Enter today http://mint.promo.eprize.com/dropyourdebt/.
- San Francisco – up two positions since November
- Seattle – dropped this month from the leading spot
- Washington DC – dropped one spot since November
- Minneapolis – making a move, up one spot since November
- New York – climbed two spots since last month
- Los Angeles – climbed from the bottom this month
- Atlanta - plummeted four positions