Learn how to budget with mint with this step-by-step Mint budget tutorial. Make a budget and stick to it with this awesome free software and app!
Today I’m sharing another one of the simple shifts that transformed my ability to finally stick to a budget and get out of debt fast.
Mint is not perfect for this purpose, but it is free, as opposed to some of the other options out there. When we were laser focused on getting out of debt there was no way I was going to drop $60 on YNAB or even more for the Dave Ramsey budgeting software!
Instead, I figured out a way to hack Mint so I could use it for a zero sum budget. I’ll be honest, it wasn’t easy.
The good news is, now that I have it figured out, I’m going to share what I learned with you and hopefully save you the pain of doing it yourself!
What is a zero sum budget?
First off you might be wondering, what is a zero sum budget, anyway? And how does it help you stay on budget?
Well, you’re probably familiar with the concept of budgeting: You go through each of your budget categories and assign an amount you plan to spend in each.
Here’s a subtle difference that took us from years of budgeting attempts and failures into fast budget success!
I used to think that if I set aside a buffer in our budget, then there’d be enough left over in case we went over in any given category. WRONG! Instead, it just gave us license to go over in many budget categories, every month!
Instead, I learned the simple but amazingly effective technique of Zero Sum Budgeting.
Here’s how it works:
Start out with your total expected take home income for the month. Then, assign each and every dollar of your income to one of your budget categories. Put another way…
Income – Expenses (and savings) = 0
You don’t necessarily need to spend each dollar, it could go to savings or retirement, but you still have to give each dollar a job.
If you were to total up each of your budget categories, they should equal exactly your expected income for the month.
It’s simple, but it works! I think there’s a mental shift that says, “hey there’s no extra buffer this month, I better stay on budget!”
This technique also makes sure that you plan ahead to use any “extra” funds to go toward something really important like getting out of debt.
I know it can be tough to find any extra in a really tight budget, but small surpluses do come our way occasionally (bonuses, raises, tax returns, etc), and if we’re not prepared with a clear budgeting plan, those will quickly disappear.
Why use Mint.com for Zero Sum Budgeting?
Mint.com is wonderful for a few reasons.
First and foremost, it is free. When you are on a tight budget and trying to get out of debt, this pretty much trumps all.
Mint is also satisfactorily secure.
It automates the process of tracking your expenses, so you’re more likely to stick with it.
Mint also has a free app, so you can check your budget on the go before you decide to make a purchase.
Mint has pretty graphics, so you can see how close you are to meeting or exceeding your budget categories.
Basically, Mint allows you to easily see how much you’ve been spending and how much you have available at any given time.
This is key to sticking to a budget. After all, what’s the point of checking your budget once a month after you’ve already gone over it?!
Why Mint is Terrible for Zero Sum Budgeting?
There is one thing at which Mint fails miserably, though.
It is TERRIBLE if you want to do a Zero Sum Budget. In other words, it’s miserable if you actually want to stick to that little budget you made or have any hope of getting out of debt.
Ironically for budgeting software, Mint has no default budget categories for saving for emergencies, contributing to retirement, or saving for college. You can set goals, but these don’t integrate well into the overall budgeting feature.
In my experience, Mint’s overly simplified income vs. spending calculations never seem to add up to my actual income and spending. Thus, seeing whether your budget and spending is a true “zero sum” is pretty much impossible with Mint alone.
Despite these disadvantages, the fact remains that Mint is free.
I learned to hack Mint.com to do a zero sum budget, and today I’m going to share exactly how I do it.
How to Budget with Mint and Stick to It
Once you know a few simple tricks, it’s really easy to do a Zero Sum Budget with Mint.
1. Get it on Paper
Make a list of your anticipated take home pay for the month and all your budget categories. List how much you plan to spend in each category. It really helps to write them down in the same order and with the same names that Mint uses.
Click here to download my free Family Budget Worksheet printable where I’ve already done that for you. It’s custom designed make it easy to do a zero sum budget with Mint.com. This is a really valuable exercise in its own right. It’s a lot harder to ignore the budget staring back at you from the front of the refrigerator than it is yet another notification on your phone. Remember, the total of your expenses (including savings) should equal your income. Click to Download 2. Enter your Individual Budget Categories in Mint Enter your budget for each category into Mint, so that it will automatically track your spending throughout the month. For expenses that you don’t pay monthly, like buying new tires or back to school supplies, you’ll want to save a bit each month. That way you’ll have enough when it comes time to pay for this expense. This concept is called a “sinking fund.” (More on how to use and manage a sinking fund to stay on budget here. Also, here’s a list of all those non-monthly budget expenses that are so easy to forget about.
To create a budget for a category that needs a sinking fund in Mint, select the “Every Month” option and make sure to check the box for “start each new month with previous month’s left over amount”. Here’s a screen shot, so you can see what I mean… You can see that for this sinking fund we are rolling over $965 from last month and we’ll be adding $150 this month, so when we have to pay for unexpected car maintenance we won’t be draining our emergency fund.
3. Categorize Expenses at Least Weekly Mint will automatically categorize your expenses for you, but you should double check that it is putting everything where it belongs. Over time Mint will learn in which category each of your regular expenditures belongs.
As you assign categories for each transaction, you can choose to check the box “Always rename [Default Transaction Name] as [Desired Transaction Name] and categorize as [Desired Category]” to create a new rule.
To edit the way Mint categorizes your transactions, click “Transactions,” and select “Manage Your Budget Rules” link at the very bottom of the page. You can also create rules to help the process along.
There are some expenditures that you may need to split into different categories. For instance, if you shop at Costco, Target, or Walmart, you might buy bananas (groceries), shampoo (toiletries), and a pillow(furnishings) in the same trip. In my experience, I’m much more likely to stay within my budget if I track these separately, and not lump them into “groceries.”
Mint makes this easy. Select any transaction, click “Edit Details,” and select the icon with a double arrow. This will take you to the Split Your Transaction screen below where you can assign an amount and category. I try to do this as soon as possible, so I don’t forget what I bought or give myself a chance to lose the receipt. Make sure to check your expenses at least weekly. It’s easy and almost fun to check over a week’s worth of expenses. However, trying to sort through a full months worth of expenses and figure out what you actually bought on each trip to the store many weeks after the fact is kind of like a crime scene investigation. What you dread, you will probably avoid. And that is not a good way to stick to a budget. Honestly, this is a habit that I am still building. Sometimes I stick with it, others not so much.
4. Do a Budget Check-in at the End of the Month At the end of the month, use the actual spending totals from Mint and write them down next to your budgeted expenses on your paper budget. Add up the total and enter it at the bottom. You’ll also want to write down your actual income. How did you do? Did the total of all your budget categories exactly equal your income for the month? If you consistently go over in one category, is it time to readjust this to a more realistic goal? Was there an unanticipated surplus this month that now needs to be sent to an extra loan payment or your savings account?
5. Make a New Budget Every Month For the longest time, I thought a budget was something you did once or maybe even once a year. I soon discovered that was not a good idea if I actually wanted to stick to my budget! I now highly recommend writing out a new budget each and every month. Our lives can change not only in big ways like having a new baby or moving but also in small ones. Each month has its own expenses that you might not have anticipated, and these must find a home in your budget for the month if you plan to stick to it. It doesn’t take long because of course most categories will be very similar from month to month. In fact, print out 12 budget worksheets right now, so you can skip that added step when the next month rolls around.
To sum it all up here are the simple shifts that helped us learn to stick to a budget, at last!
- Hack Mint.com free budgeting software to do a Zero Sum Budget.
- Get it down on paper.
- Check your spending at least weekly. After all, what’s the point of checking your budget after you’ve already overspent?
- Check your budget at the end of every month and make changes if needed.
- Make a new budget every month to plan for family and seasonal changes.
What simple tricks help you stick to a budget? Share your tips in the comments!