Thursday, July 14, 2011

Spendwise Dad: Online budgeting with

For those of you who like to use checks, credit cards or debit cards for the majority of your purchases, can greatly simplify your budgeting and bank account organization. is a free online budgeting tool that securely connects to each of your many bank accounts (checking, credit card, loan, mortgage, you name it) and downloads the balance as well as each individual transaction on that account.

How secure is it? is owned by Quicken, a well known personal finance software company. They use bank grade encryption to establish a read-only connection to your banks. Mint does not have the ability to modify or control your bank directly; it merely downloads the information and formats it in a convenient fashion.

Automatic categorization
When transactions are downloaded, Mint does its best to automatically categorize the transactions for you based on the Payee. For example, Wal-Mart transactions generally will automatically be categorized as "Groceries". It isn't perfect and you will have to go in and make corrections from time to time. If there is one that consistently is being categorized incorrectly you can set a rule to make it always be re-categorized to the category of your choice.

Once you have established the categories that your purchases fall into, you can go to the budget and setup monthly allowances for each of these categories. Incomes are also budgeted so that you can make sure that you are always spending less than you are making. As Mint downloads and categorizes your transactions you can follow your budget and see how you are doing. If you need to, you can make adjustments to your budget and reallocate funds from one category to another. If you are just getting started with budgeting, it may take a couple of months before you really establish your allocations for each category.

If you like numbers and graphs, the Trends tab will show you how much you are spending on average each month on any given category. You can also see your average net income and your net worth. The net worth number is one of my favorite features. If you add all of your assets and liabilities to Mint, you can track your net worth over time and really get a good idea of how you are doing financially.

One thing that Mint doesn't do very well automatically is deal with cash. If you take money out of an ATM, mint will see the ATM transaction but it won't know how you spent the cash. You will either have to categorize that entire transaction as a single category, or use the split functionality in order to break that withdrawal into the different categories that the money was spent on.

How is it free?
Mint is free to users because it is supported by advertisements tailored to your financial situation. It will give advice and suggest credit cards or checking accounts based on the interest rates you are getting, etc.

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