Online Budgeting

There are many ways to do a budget. There are pen and paper, spreadsheets, and the wait and see if I have any money left at the end of the month method. Online budgeting can make sense for some.

Why Budgeting?

A few years ago I started tracking my personal expenses closely. I did this because I was starting my business, and wanted to make sure that I had the cash flow available to make it work. For most people, budgeting can be done in one of two ways:

1. You save first, and spend until your money is gone and your next paycheck arrives, or
2. You plan how much you can spend based on your income and expenses and put the savings aside at the end of the month.

For people with large incomes, the save first option works well. For people on a limited income, budgeting every item can be better. I like using a combination of the two. First I save, and then I look at my spending and make adjustments. I found software that helps me do this very well. Most importantly, it’s FREE.

Economic hardships create an increasing need for personal finance software. I originally started doing this using Quicken Home and Business. I soon became intrigued by moving my data into the cloud, which is a fancy way of saying online to an internet site.

Enter Mint.com.

After reviewing a few different budgeting sites I decided to continue with Mint.com. It is popular and offered stability after being bought by Intuit.

How does it work?

First, you create an account. You provide an email address and password with security questions.

Then you add the accounts that you want to track. Because my wife and I put all our purchases on a cashback credit card, we can easily track 95% of all our purchases by syncing our credit card and credit union information. You can also add your mortgage and other debt and download months worth of transactions.

Last, you click on trends where you can see your major spending categories. If you have a large number of transactions that are uncategorized, you simply click on that part of the pie chart until you get to the actual transaction. Then you categorize them. It is as simple as that.

Why Budget?

Beginner investors might want to know where they’re spending their money so they can adjust for needed savings. Seasoned investors nearing retirement might want to track their spending to get an idea of their income need in retirement. Retired investors might want to track their expenses so they aren’t jeopardizing their nest egg by overspending.

Takeaway

Whatever your reason, budgets are the backbone of personal finance. Having one helps you make conscious decisions to grow or blow your wealth. Happy budgeting.

For more on budgeting check out:

A Quick and Dirty Budget

How to Create a Budget

Editor’s Note: This post was originally published on May 20th, 2011 and has been revamped and updated for accuracy and completeness.