So it’s the last three months of the year, and you’re thinking you need to get a handle on your personal finances. But you’ve managed not to do any analysis or create concrete goals for 2021. Or, to put it a different way, you’re thinking ahead and preparing to track your 2022 finances better. Good on you.
One of the parts of managing your finances is personal accounting software. “Why?” you may ask. Because knowing where your money is coming from and going to is the foundation of good financial management. And it’s personal accounting software that helps you streamline the process of knowing where your money is going. It’s the kind of tool that makes monitoring your cash flow a habit, not a chore.
In this article, I will focus on Mint (mint.intuit.com). This is a popular online personal accounting tool that you can access on a computer or mobile device.
Below is a list of pros & cons that will help evaluate if Mint is an appropriate tool for you.
Easy to set up and use
Adding your bank, debt, and investment accounts to download automatically is easy to figure out on the site. Also, navigating other features like reports, bills, and goals is easy without viewing a bunch of video tutorials.
Is your cash flow tight, and do you often have overdraft fees because of automatic bill payments? Or your income is inconsistent, and you have trouble prioritizing bills because you don’t have a good handle on what is due when? In this situation, having a list of regular bills organized by the due date is a great way to minimize unwanted fees like overdrafts and late fees. Mint has a feature that tracks regular bills, allows you to see what’s coming due in the current month, and notifies you when it can’t find a payment for an expected bill.
Create & track goals
If you are serious about improving your financial situation, creating goals are a must. Just as important is tracking progress toward those goals since progress keeps you motivated. Mint allows you to create actionable goals and monitor your progress – or lack of progress if you flake out.
Track your spending vs. savings vs. income
As I said before, understanding your cash flow – money coming in vs. money going out vs. money saved – is the foundation of good financial management. In this capacity, tools like Mint make it easy to pull a summary of your cash flow so you can quickly see how your spending compares to your income. You can also drill down into the minutia of your spending if you notice a money drain in a particular category.
Create a net worth statement
Maybe you hear the term “net worth” and think it only applies to rich folks. But, a net worth statement is a helpful tool that allows everyone to understand their financial situation. “How much debt do I have relative to my assets?” “What are my largest financial assets?” These are the kinds of questions a net worth statement can answer – which is helpful even if the answer to the first is “a lot” and the answer to the second is “a $42 bank error in my favor.” Mint gives you the capability of adding all your financial assets and liabilities – not just your bank and credit card accounts. Property (home, auto), investment accounts (401(k), brokerage), and loans (mortgage, auto, personal) can all be added to Mint, so when you log in, you see your whole financial picture in one place.
When you’re trying to improve your spending habits, having easy access to feedback on your progress is beneficial—a tool like Mint provides you with that feedback from any device, any time.
Reports are not customizable
My primary complaint with Mint is the lack of customization in the reports. The app has standard reports that provide you with summaries and comparisons of your spending vs. income, but other than changing the time period for the report, there aren’t many options to change how the various spending categories are displayed. For me, the reports provide too much summary and not enough detail. But maybe you’re not an accounting nerd, and these reports are just fine for your purposes.
The flip side to the “access anywhere” feature is that all your data is online. Mint is an Intuit product like QuickBooks and Turbo Tax, so it shares the same security level as these other apps. And to fully use the features, you are linking up your bank, credit card, and investment accounts to the app. You may be uncomfortable with this. However, you will find it hard to find personal accounting software that does not have some online component.
Free software with ads
Another consideration to ponder is the fact that Mint is free. And any free application should spark the question in your mind – “how do they make money?” Mint has ads. And they may use your data to target ads for products or services. Are you okay with ‘free’?
If Mint is not the app for you, for the remainder of the year, I will be reviewing other personal and business accounting software tools in anticipation of you starting 2022 with a plan and tools to get you to where you want to be financially.