On the surface, it seems so easy: You sign up for Mint or any other expense tracking app (or you even kick it old school and write down everything you spent in a notebook) and just like that, you’re on your way to totally having your spending and saving habits sorted. But I’ve seen it happen over and over again: you plug in all your accounts, categorize your spending, and then you have no idea what to do with the information.
The good news? You’re not alone. The data and capabilities of Mint are unlike anything we’ve had access to before; the insight we’re able to get about our spending without having to do the manual work of counting and writing everything down is truly revolutionary.
It’s also is incredibly overwhelming. You vow to buckle down, and so you hit it hard for, like, a week. And then you get annoyed at the alerts or you get confused because you don’t know how to read the charts; you feel bad because seems like a lot for food, and that stupid bridesmaid’s dress that wasn’t factored into your clothing budget sent you way into the red.
Mint gives you everything except the context and guidance to make the information useful. Armed with the Urgent/Important Spending Matrix as the foundation for how to really think about our spending and our values, let’s dive into how to make Mint work for you (for reals this time!)
But before we start this process, I want you to prepare for the fact that some… feelings are going to come up. We are all naturally hard on ourselves, and money is often a manifestation of all our insecurities, desires, and past shame.
When we start to shine a flashlight on all the parts we’ve worked so hard to keep in the dark, it’s going to be difficult to put the judgment away and look at our spending objectively. It’s going to be nearly impossible to not freak out a little.
So I want you to prepare yourself to complete this whole process, feel all the feels, and take this time to really unpack what is going on mentally and emotionally. Here we go:
Categorize at least 1-3 months’ worth of transactions
Mint does its best to categorize common transactions, but it will get some things wrong, so give yourself about 30 minutes to an hour to go through as many expenses as you can for the last 1-3 months.
Offset this with something fun and distracting, like those two hours you spend on Monday nights with The Bachelorette and a glass of wine. Take note of the things you have to look up or don’t remember buying.
Review your spending
Now, the moment of truth. You’re going to dig into the “Trends” tab, which is a nice way of saying pie charts and graphs. Review one month at a time and see what categories jump out at you.
Does it feel like your food number is too high? Click on the details to find out what’s going on. The first time I did this, I had no idea I was spending $500/month just on eating out (plus $200 on groceries, on a $38K salary!). When I did some digging, I saw that about half of my spending was on restaurants and the other half was on buying lunch at work.
Reflect on your spending (but first, maybe grab another drink or a piece of cake)
This is where the Urgent/Important Matrix can really work together with Mint. For me, getting to have nice dinners with friends was something that belonged in my Urgent/Not Important box. I didn’t want to cut that out. But the other half was being spent on lunches at work—meals I barely remember eating.
Ask yourself:
- What were some feelings that came up as you reviewed your spending? Were your surprised by anything?
- What expenses did you feel guilty about but also couldn’t imagine having to cut out of your life?
- What expenses did you see and say, “Oh my gosh,” “I had no idea I spent that much,” or “I don’t even remember buying that”?
Choose 1-2 categories you would like to monitor over the next few months
You don’t need to create budgets for your rent, cell phone, or transportation, or anything else in the Urgent/Important box of your Spending Matrix. You already know how much you spend on these items and tracking them would just create noise.
Instead, choose 1-2 of the categories you really want to work on and put in budgets for those. This way, when you do get an alert that you went over budget, it means something.
Give yourself some reasonable spending targets based on your current spending. For instance, if you spend $500 on shopping, don’t tell yourself you’re not going to shop. Instead, give yourself $300 a month to shop.
Create some strategies for how to cut back on spending in this category
When I decided I wanted to cut back on eating lunch at work, I tried an experiment; I brought a loaf of bread and a pound of turkey to work and made sandwiches all week. Turns out, I didn’t notice a difference one way or the other.
Others have set aside a chunk of money equal to the amount they planned to cut back on and put it into savings immediately instead of leaving it in their checking accounts. If you feel like you’re living paycheck to paycheck, this would be a great one to try.
Try a few different strategies throughout the next few months to see what sticks.
Rinse and repeat
This is the often most neglected part of the whole thing—the fact that it’s a lifelong process.
I deleted my Seamless account (which is a whole big thing; you actually have to email them to delete your profile!) and the first time I had to call someone to place a takeout order, it was so awkward that I started looking in my fridge to see what I could eat instead. Then it just became a habit. Soon, I was saving $250/month just by cutting out Seamless. Totally winning.
This was also right around the time Uber was becoming popular and… you can see where this is going. That $250/month that I was saving from Seamless was now going to Uber rides. It took me a few months to catch on, but as soon as I saw what was happening, I removed my “fast food/convenience” budget from mint and replaced it with a new spending target for ride sharing and cabs.
While you don’t have to track your spending every day, if you start to feel like money is disappearing faster that usual, take a closer look and see where it’s going and if you need to adjust anything. Trust that those baby steps will parlay into bigger strides when it comes to being in control of your financial future; it just takes some time and a little forgiveness.
