Goals

How To Set and Track Financial Goals With Mint

Most people track their financial activity somehow, be it via a program on their personal computer, an old-fashioned paper checkbook ledger, or perhaps even here on Mint.com. How many of those people, though, set savings goals and track their progress against those goals? I’d wager not that many–setting goals and then keeping after them is hard work, and it’s not something that’s easily done in many financial tracking programs.

Mint.com‘s new Goals feature seeks to take the difficulty out of both setting goals and regularly tracking your progress towards those goals. With a few clicks of the mouse, you can set up a savings goal, and then use Mint.com to help you achieve that goal.

How to create a goal

Creating a goal on Mint.com is quite simple: just click the Goals tab at the top of the screen, and you’ll see the Goals overview page, as seen in the image above.

Mint provides a number of predefined goals, covering objectives such as paying off your credit card debt or auto loan, saving for an emergency, buying a car, and taking a trip. You can also create a custom goal to cover whatever specific objective you have in mind.

Click on the goal type you’d like to create and a step-by-step guide will appear, asking you questions relevant to the selected goal. Choose a home improvement project, for instance, and you’ll be asked its projected cost, type of project, and whether you’ll fund the project from one or many sources. Each goal asks a differing series of initial questions, but they’re very simple to answer–just fill in the requested fields, and click Next, as seen below:

Next, the guide lets you name your goal, set a target date for reaching that goal, specify your desired monthly savings amount towards the goal, and even upload a customized photo of your goal–so you can look at that Ferrari (or Jetta) onscreen as you save towards its purchase.

Finally, the guide sets up tracking for your goal. You can assign a goal to an account, open a new account to use for that goal, or leave the goal unassigned (though unassigned goals can’t be tracked).

The tough part about setting financial goals (other than tracking your progress and achieving them, of course) is knowing how much you need to achieve that goal. Mint’s Goals feature actually does that math for you. If your goal is to get out of debt, for example, the Goals feature will pull all of your credit card debt and auto loans from Mint, so you can create a pay-down plan. Likewise, if your goal is to save for an emergency, Goals will estimate your monthly expenses based on your spending activity in Mint. If you want to buy a car, Goals will estimate the price based on the Kelley Blue Book value of your desired make, model, year and trim.

Goals does have one restriction: an account can only have one goal assigned at a time. Once the goal is achieved, the assigned account may then be assigned to another goal.

As an example, if you create a goal to save for college and assign it to your savings account, you can’t create another goal to buy a car and also assign it to your savings account. You can, however, assign a goal to multiple accounts, so that saving for retirement can involve both your IRA and 401(k) account.

You can create a goal without linking it to an account, but you won’t then be able to track your progress towards that goal, as seen below:

To get the most out of Mint’s Goals feature, it’s best to link a goal to an account–after all, what gets measured gets done.

How Mint helps you achieve your goals

Mint’s Goals not only helps you set up goals and track their progress — the feature is designed to help you achieve them. Each goal’s online guide offers specific advice to help you work towards that goal, including walking you though key milestones along the way.

If your goal is to buy a home, for example, once you determine how much you can afford and set up or link the accounts needed to save towards a down payment, the Buy a Home guide offers advice on improving your credit score, understanding your loan options, shopping for homeowners insurance and so forth. Each step incorporates relevant content from the MintLife blog.

You can also create custom tasks to add to your list of next steps or adjust your goal details. To adjust monthly contributions, click on “adjust monthly contributions” to edit across all goals.

How You can achieve your goals

While Mint.com’s Goals feature helps you set and track goals, here are some tips that can help you actually achieve the goals you set:

* Budget realistically: This applies to budgeting both time and money. The reality for most of us is that any goal we set is going to require a spending reduction in another category–less eating out, fewer new clothing purchases, etc. As such, it’s probably unrealistic to think you can go from saving $50 a month to saving $1,500, just because you created a goal that said you were going to save $1,500 a month.

Similarly, saving takes time, and setting a realistic date for achieving your goal will help you create an achievable monthly savings target. For instance, paying off $8,000 worth of credit card debt at 16% interest in one year will require paying back $726 per month. Spread that over three years, and the monthly amount drops to $281. Yes, you’ll pay more interest, but a three-year payback target is probably more realistic than a one-year target.

* Create a separate account: If you try to save for an objective using your normal checking or savings account, you may find that your planned savings simply get used up on other unplanned purchases. A much better way to achieve a savings goal is to set up a new account–Mint.com includes two new account options when creating a goal–and then deposit your monthly contributions into that account. The harder this account is to get at (no checks, no ATM cards, etc.), the better–you’ll be less likely to spend the money.

* Use automatic deposits through your employer: Instead of having to remember to manually transfer funds to your new goal-related account, use your employer’s automatic deposit capabilities to do it automatically. Most payroll services will let you deposit your paycheck into more than one account–I once had mine set up to go to six different accounts. By making deposits automatically, you’re much more likely to achieve your goal, as those funds won’t be available for spending before you get a chance to make the deposit yourself.

What’s to come

In the future, you will be able to see an annual view of long-term goals, such as retirement or college savings, which can help turn huge long-term goals into achievable (annual) short term goals.

To get started, sign up or log in to your Mint account.