Start Budgeting with Mint (Part 2 of 4)

Hi, everyone!  This is Lara Hammock from the Marble Jar channel.  This is the second video in a four part series where I will walk through the steps to start budgeting using Mint.  This video and the next one will cover all of the steps involved in creating a budget.  In this one we'll tag all of the transactions that we've pull in from Mint and set an amount for each budget category.

In the 4 steps to successful budgeting, we are still on the second step -- create a budget.  In the last video, we linked all of your spending accounts to Mint and developed a list of budget categories.  So, now it is time to

Tag Historic Transactions

This part takes some time, so make sure you block off some time to do this.  To figure out how you have been spending your money, you need to go back through the historic transactions that have been pulled into Mint from each of your accounts and tag each transaction with one of your budget categories.  After we've done this for all of your transactions, you will have a better idea of how much you have spent on each category so that you can create an achievable budget amount.  How do we do this?

You can see up here that we are in the Overview tab.  Choose the transactions tab.  Now make sure you are looking at All Transactions to see every transactions from each of your linked accounts in one place.  Now scroll down to the bottom.  This screen is showing 25 of 578 transactions.  Buckle in, you will be tagging each of these.  I told you it would take a while!  Now, you can see that Mint has already attempted to tag each transaction with a category.  The problem is -- they may not be the categories that you have chosen.  Here is where I will say, make your life easier and choose some of Mint's default categories like Gas & Fuel.  Would I have named it that?  No, but does it make my life easier since Mint automatically tags most gas stations purchases with this?  Yes, it does!  

There will still obviously be categories that you will need to change.  I mean -- WHY does Mint insist on creating separate categories for Alcohol and Bars, Coffee Shops, Fast Food, and Restaurants.  I have to change all of those to the Restaurants category for my budget.  Okay -- so let's do that with a sample transaction.  I want to change this Fast Food Category to Restaurants.  I can do this one of 2 ways: I can click on the arrows, pull up the list of categories, scroll to Food and Dining and choose Restaurants.  Or I can select this, type over it and pick one of the options that come up.  This is usually faster.  This process with Mint makes me a little crazy.  Sometimes the categories don't stick, you have to keep typing to select, or you have to do it several times.  I don't know why -- it's just a little glitchy.  

You will also notice that some of the categories that you want are NOT on Mint's list.  You can add them.  After you have pushed the double arrows here, you can select Add/Edit Categories.  You will need to choose a Primary category to stick your new category in -- I have some in "Business Services" since I didn't know where else to put them.  And before you ask -- No, you cannot hide categories or delete them.  You are unfortunately stuck with the hundreds of categories that Mint has by default, but at least you can add your own as well.  As you continue through this process, you may need to add to your category list -- that's why we called it a draft.  Add, edit, and delete categories as you go.  The process of tagging each transaction should help you to refine your budget category list.  

Finish this first page and then use the navigation at the bottom to go back through every single transaction.  Once you have completed this, let's just check to make sure you did them all.  Go into the Budgets tab.  No need to fully understand this page quite yet.  Drag to select all of the months up here that are tinted grey.  Those are the months that have transactions associated with them.  Selecting will turn them from grey to green or red.  Now expand this "Everything Else" section down here.  Okay -- these are all of the categories that you have used.  Take your list of categories and check off each of them against this page.  You will probably have a couple of categories on this page that are NOT on your category list, right?  If so, that means you have missed or incorrectly tagged some transactions.  Let's fix those.  Let's say you have some transactions that are tagged Food & Dining: Alcohol & Bars and you meant to tag them as Restaurants.  Just click on the category which is a link taking you to a filtered list of transactions for that category.  Now you can go through each of these and tag them properly.  Once completed, let's go back and see if we took care of that.  Go into the Budget tab, drag to reselect all active months and scroll down.  See?  The category isn't there any more, which means there aren't any transactions tagged with it.  Okay -- now do that for each category that you don't want in your budget.  Okay -- now that you've done that.  It's time to 

Set an Amount for Each Category

Basically, what you are going to do is determine the average amount that you have spent monthly in each category for the last several months.  Mint can help you do this.  I'm going to show you on paper, but I would normally do this on a spreadsheet.  For each of your categories, you are going to create a column each for two months, an average column, and a budget column.  I'd rather do three months, but because Mint usually only pulls in transactions from the last 90 days, unless you've pulled data on the very last day of the month, you will have an incomplete first month and incomplete last month, giving you only 2 full months of usable data.   Okay -- go into the Budget tab.  This is just a report of your spending by category.  The fact that some of them are up top and nicely colored and some are at the bottom under Everything Else doesn't matter that much right now -- it is still summing up the same information.  Find the category on your sheet -- we'll do Gas & Fuel as an example.  Selecting the months up here is telling the report the data range to report on.  The first month with data, in my case October, is an incomplete month -- my first transaction was on 10/11 -- so I can't really use that info.  Let's select the next month, November.  Okay -- we spent $336 on gas, which I'll write in this column.  How about December?  $305 -- that goes in this column.  Again, January isn't complete yet, so that month doesn't do me any good.  Okay -- I have two months of data.  Let's add them together and divide by 2 to get an average and write that number here.  I'll round up and make it $321.  Now when I'm trying to figure out the number to use in my budget I need to see what I've been spending.  I can't make it too low or it will be unreasonable.  Shouldn't make it too high or I won't be able to spend in other categories.  So, I'll set this budget at an achievable amount -- $325.  This might not be the right number -- maybe November and December were months that we drove a lot.  Or maybe we didn't drive as much as usual.  We can always make adjustments later on.  So, you are going to do this for each of your categories -- hope you don't have too many!  At the end, you should have budget amounts for each of your categories.  

Okay - so now we are most of the way through creating a budget.  Join me in my next video where we go through the final steps in creating a budget: a quick savings check and entering your budget into Mint.  Let me know what you think!  Comments are always appreciated and thanks for watching!