Did you know that three-quarters of Americans are experiencing stress caused by financial concerns? Stress can then cause relationships to be burdened and sometimes even torn apart. A budget calculator will help tremendously.
If you are stressed by your finances and don’t currently have a budget in place, I’ll show you how my husband and I take control of our finances using a simple budget calculator. We live on 2 teacher’s salaries and still have enough money to invest and save into several accounts. We learned early on in our marriage that we didn’t want this extra stress when it was something that we could control. The key is creating AND sticking to a budget. But I’m not going to lie; keeping a budget is HARD work. We aren’t perfect, and we even struggle with it at times.
Why is a budget important?
If you don’t have a budget, how do you know where your money is going? If you don’t currently have a budget then you probably have a lot of “holes in your bucket”. This was an analogy that a financial advisor gave to us when we were setting up our financial plan early on in our marriage. The phrase “holes in your bucket” is referring to the little items or expenses that you spend money on that over time add up to be a large amount out of your income. You may have also heard it referred to as the “latte factor.”
We’ve kept a budget for our entire married life of 15 years. Back in the day, we did everything on paper and used a good old-fashioned calculator while still keeping track of every penny we spent. That may seem daunting and like a lot of work, so keep reading and I’m going to give you our super easy secret to keeping on top of our budget. It doesn’t require paper or even a calculator…
The single most important tool that we use to keep track of our budget and not be a slave to our budget is by using the free website and budget calculator Mint.com. Just a side note: I’m not being paid to endorse Mint.com. I just whole heartedly believe in it, and it changed the way we do our budget. It has freed up so much of our time.
You may be asking, “Where do I even start creating a budget?” As you will see in step 1, you first have to figure out the categories in which your expenses can be organized.
Step 1: Create Budget Categories
To me it’s easier to start with paper and pencil, when starting a budget from scratch. If you Google “budget worksheet,” you will find several templates that you can print and use to get you started before you input everything into Mint.com. Here are the categories that we use in our budget:
- Car Payments
- Car Insurance
- Cell Phone
- Utilities (water/electric/trash)
- Savings (vacation & Christmas)
- Emergency Fund
- Life Insurance
- Family Birthdays (This category can be one of the “holes in your bucket” if you don’t plan for it.)
- Everything Else (I use this category to place transactions that don’t come up every month.)
The important thing to remember is that everyone’s budget will look different. You just need to make sure that every dollar you earn is placed in a category. Once all the bills are paid, any leftover money can be put into savings or a “rainy-day fund.”
Step 2: Gather information to use in Mint.com
Once you have all your budget categories, gather all your logins and passwords for bank accounts, credit cards, mortgage accounts, investment accounts, and any other accounts that money goes into or comes out of that you want to include in your budget. These will all be used when setting up your free account at Mint.com.
You may be asking, “Whoa, wait a minute. I have to give Mint.com all my account info?” Let me assure you that your account info is only used for syncing and uploading data from your financial institutions. You cannot move money from one account to another within Mint. They use 128-bit encryption which is the same as your bank.
Step 3: Create your free account at Mint.com
Mint makes it so easy to get started right away that all you have to supply is an email address, zip code and password. They walk you through everything step-by-step from syncing all your accounts to sharing helpful tips about investments or ways you could be saving money.
“In just minutes, you’ll see where your money is going and get ideas on how to stretch it farther.” – Mint
In my personal experience, it is easiest to set everything up on the Mint website, and then use the app to monitor your spending and make minor corrections to transactions.
Step 4: Transaction organization
Mint will analyze all your spending based upon the accounts that you choose to connect. Then they will create categories and limits for you, but I found it more beneficial to change their suggested categories to fit the categories that I had already created.
Mint will place all transactions they sync into a corresponding category. Sometimes a transaction or two will be placed in the wrong category, but it’s super easy to correct it. Within the app, it’s painless to fix any incorrectly categorized transactions. They even have you create a 4-digit pin to login into the app instead of typing in your password every time.
Step 5: How to Monitor your Budget
Every time you log in to the website or open the app, all your accounts are updated. This makes it helpful to see your current standing on sticking within a budget.
“Mint automatically updates and categorizes your information in real time. From your bank accounts and credit cards to retirement accounts and more–we’ll crunch the numbers as they happen so you always know where you stand.” – Mint
*Side note, I have noticed that my bank account transactions usually take a day or so to sync with my Mint account, but my credit cards seem to sync transactions right away.
Within the app, you can easily monitor each budget category and decide right then and there if your next purchase will push you over your spending limit within that category. Mint has really helped us from spending frivolously and creating “holes in our bucket” that sabotage our savings goals. We’ve been able to save up for really fun trips and put money aside for projects around the house. If we weren’t using a budget calculator like Mint, I am positive that we would not have met those goals.
This may seem like a ton of work, but trust me when I say that it’s all worth it in the end when you are a “financially wise” person who knows where their money is going and is able to save. Plus any relationships that you have where money is involved will be all the better when you are able to use your money wisely and save for the future.
You can find all the information you need at Mint.com before you even create your account. Also, don’t forget to download the app for Android, IOS or even Amazon.
I hope this post has given you a way to take control of your spending or at least help you start with organizing your spending and sticking to a budget.
It takes consistency to maintain a budget but is very much worth it when you have money left over at the end of the month.
What are ways that you keep track of a budget? Do you use a budget calculator? I’d love to hear your ideas and questions in the comments below.
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