Why Budgeting Is Good for You

Why Budgeting Is Good for You

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Mint.com shows us why Solo Moms need to ditch their Hot Pocket–eating lovers

Mint.com was founded in 2006, and I have been using it right from the beginning. At first, my friends gave me crazy eyes when I told them, “Hey, I found this free online money-management tool that will update all my financial information automatically. I just had to give them my credit card and bank information.”

Let it be known that, this once, I was right.

It’s been 10 years now since I’ve been using Mint. It has proven itself to be safe and invaluable, but what is it? It’s a simple online tool that makes basic budgeting very easy. Who wants to budget? Me. Let me tell you why.

Mint tells me:

  • How much money I need.
  • My discretionary income (about $2.75).
  • How to save money.
  • How I’ve wasted money.

It can be painful to see all this, especially how I’ve wasted money: $12 in overdue library fees? $25 for a parking ticket? $67 for bad meat bought from a guy who had bad teeth, a beat-up pickup truck, and just walked into my garage? $45.99 on the infomercial super whisk that was supposed to whip skim milk (but didn’t)? All told, it adds up to $149.99, baby. How long does it take me to earn $150? A long time. What didn’t I buy because I didn’t have $150? A cute winter coat on sale at Marshalls that would have made me look like Julia Child. Budgeting is not always fun, but it is always important.

Once again, why?

  • It keeps me out of credit card debt. (I knew not to buy that Julia Child coat.)
  • It makes me think about how I want to save money for the future.
  • I sleep better when I don’t have much money but know what “not much” is.

How does Mint work?

  • It automatically downloads all my income and spending.
  • It lets me create a budget and keeps track of my spending.
  • It alerts me when bills are due, fees are charged, credit is dinged.
  • It gives me financial advice on how to save and what to do with extra money.

How is it different from just having an Excel spreadsheet?

  • It’s much easier to set up and navigate.
  • I never forget to record a transaction because Mint will do it for me.
  • Mint analyzes my income/spending and makes pretty charts and graphs.

What do I have to do?

  • Make a free account at Mint.com.
  • Input the passwords and personal identification numbers, or PINs, for financial accounts.
  • Go online regularly, and check budget statuses.
  • Designate what category a transaction needs to be labeled. (Mint will try to do it automatically but is pretty bad at reading minds.)

The good news is that budgeting has gotten easier the longer I’ve done it. It’s gotten to the point where I can see my Mint screen in my mind as I’m spending money, so I monitor my spending better.

For example:

  • Infomercial whisk. This item would not fall into any budget and therefore cuts into my “discretionary.” Or, maybe it would exceed my discretionary, in which case I know I’d be going into debt to buy it. Do I really need to whip skim milk badly enough to go into debt? No. I don’t even buy skim milk; it’s disgusting. No skim milk, no whisk.
  • Meat sold from the back of a pickup truck. This expense would go on the grocery budget bar that has $101 dollars left on it. If I spend $67 on this meat, I have only $34 left for the rest of the month . . . and it’s only the 11th. No. Anyway, I’m an Aldi’s girl.
  • Library books. I am going to get in the car in the middle of a blizzard to take those books back because otherwise I will forget and owe $12 that will go under discretionary or debt.
  • Parking tickets. Well, that, that goes in the “shit happens” fund. I swear I read the sign.

When I first started Mint, it was painful. I used to pride myself on the fact that I didn’t spend any money eating out because I knew I couldn’t afford it. Well, I was right about not being able to afford it, but I was eating out a lot. Fast food is still eating out. Panera when I was too tired to cook? That counts, too. Joining someone for her birthday celebration? Guess what? Mint doesn’t give a shit if it’s rude to say no. It still counts. I was spending hundreds of dollars of debt a month from eating out, and I didn’t know it. Mint also taught me a math lesson. Hundreds of dollars a month adds up to thousands of dollars a year. I used my tax return to pay off my credit card, but I could have saved that money and gone on vacation, or I could have followed Mint’s recommendation and funded my Roth IRA (yuck).

Mint trained me out of saying, “It’s only $20.” Now I think, Which budget line would that “It’s only $20” come out from? How many of those “It’s only $20” turn into “It’s only $100”? Mint has also gotten me to think critically about what costs are “need” and what costs are “want.” It forces me to ask if my needs are really needs; and, if they aren’t, do I want them over other things?

So beware. Starting a Mint account may not just bring your financial life in order . . . it may end up transforming your whole life altogether. You may end up going back to school, moving to a different city, or ditching that sometime lover who eats all your kid’s Hot Pockets.

What do Hot Pockets have to do with your life? A five-pack of Hot Pockets is $5 at Walmart, so if Lover goes through a pack a day, it’s costing you $150 a month. $150! And no appreciation! One Hot Pocket after another as if they were free. Trust me. Ditch Lover. Take that money and sign up for ballet class instead. Your life will be much better because of it.

Mika Yamamoto, ESME's Guide for Public Assistance, has successfully nurtured two children as a Solo Mom and now hopes to achieve the same results as a plant nanny.

Please feel free to contact us with any comments or questions.

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