How to Create a New Year's Budget that Sticks
New Year's resolutions come and go. A sad and small amount often work out like you'd planned, and the rest are forgotten about, or perhaps regretted later on. Losing weight and creating a budget are two of the most common New Year's goals. But while Mint can't drive you to the gym, this financial software can help make your budget the fittest it's ever been.
In 2014, you can shake off old habits and create new ones that last. They key is being realistic and using a system that works. Only you can decide how to budget your money, but with a little guidance from a financial expert and Mint software, you can set those plans in motion and keep track of your progress every day.
Baby Steps to Get Out of Debt
Nationally-syndicated radio talk show host and financial expert Dave Ramsey advises clients and listeners to get out of debt first and foremost, then build wealth. His is one of the simplest, most effective budget approaches, and nearly anyone can follow it.
Ramsey explains what he calls the "7 Baby Steps" as a journey to debt control and ultimately living debt free. Each of the steps happen in order, and include:
Start Emergency Fund
Pay off Debt
Build Emergency Fund
Save for College (if applicable)
Pay off Mortgage
Build Wealth and Give to Charity
There's a method to the order.
Your emergency fund is there to rescue you in case of a dire circumstance. Everyone needs this fund. It's for those unexpected things that fall into your lap when you're not looking. Start with $1,000, and you're covered for some of the smaller things that life can throw your way.
"Pay off debt" is a small statement, but it's sometimes an enormous feat of dedication and endurance. This baby step is near the top of Ramsey's list for a reason -- you can't make much financial progress for yourself while you're building someone else's wealth. He suggests paying off the smallest debts first, then working toward larger ones.
Next comes building your emergency fund to a healthy level. Time was, 3 months' pay was plenty. It could carry you over in case of job loss, medical bills, or other large, unexpected emergencies. Ramsey recommends a more generous approach, with 6 to 9 months' pay set aside. Build this up, and you're ready to tackle the next baby step.
Investments, college fund, paying off your mortgage, and ultimately building wealth are the last items on the list. You might need an adviser before stepping into investments, and a college fund might not be important to your family for any number of reasons. Paying off a mortgage, if you have one, is that last big hurdle before debt-free living. After that, you build wealth and live generously.
Mint Helps You Handle the Particulars of Budgeting
Getting out of debt is important. But when you drill down, there is a lot more to think about. While you're saving for an emergency fund, paying off credit cards, and thinking about retirement, you're still receiving utility bills and buying groceries.
Mint.com helps take your overall budget course and pull it into sharp focus. As sharp as you like, in fact. You can see an overview just as easily as you can review a single transaction. This gives you control that you might not have otherwise.
It's the daily activities that can sometimes cause budgeting hassles. Spending too much at the grocery store, dining out, splurging when you should be saving -- all of these, and other things, can throw you off track. With Mint, that never has to happen, at least not without your knowledge.
Over the past three years, Mint has been there to help users create and work toward more than 6 million financial goals. These might include paying off credit card debt, saving for a vacation, setting up retirement, or any other goal imaginable. If you can dream about it, you can save for it, and Mint can help. This is where it gets interesting: Users have saved over $40 billion -- billion -- toward those 6 million goals.
Mint is more than a way to keep track of your accounts and bill due dates. If that's all there was to reaching financial goals, anyone could do it using a cork board and thumbtacks.
With Mint software for your home computer, smartphone (including Windows!), and tablet, you can enter all of your accounts, and then build a budget plan that's as simple or comprehensive as you like. If you like Ramsey's Baby Steps approach, you don't have to start on day-1 with every category from an emergency fund to building wealth plugged in.
But you can if you want to. Mint is easygoing like that.
Customization is one of the many things that makes Mint so special. Your account, your goals, your progress, your charts and graphs -- all of it is uniquely yours. So you don't have a 6-figure income? That doesn't mean you can't build a budget, set goals, and take steps every month to meet them.
Mint helps you watch every dollar that you spend. It creates charts that show spending trends that you might not be aware of, and makes suggestions that help you save more money. For example, if there's a better loan interest rate with a different lender than you have right now, Mint can let you know.
Dig into budget categories, and you can see at a glance how much you've spent and how much more room is in your budget for purchases in any category, such as groceries.
Tips for Using Mint Software to Start the New Year Right
With Mint, you get a lot of budgeting know how in a simple-to-use tool. Everyone has to start somewhere, so here are some suggestions to get started:
Understand Where Your Money Goes: Mint lets you see accounts individually, in relative groups, or as a whole, which shows you how much money you spend on everything. This includes cash purchases that you can enter manually.
Check Financial Transactions and Account Balances: No more calling or logging in, and no waiting for a statement to arrive in the mail for individual accounts. Mint lets you see all of your financial transactions and account balances in one place, in real time, all from your computer, tablet, or smartphone. You can add the app to more than one mobile device, too, so there are no more surprises for anyone. And if a mobile device is stolen or lost, not to worry -- no one, not even you, can touch your money using the app.
See Income, Expense, and Trends that Summarize Money: Maybe you earn more at a certain time of the year, or some expenses fluctuate, such as heating and cooling costs. With Mint, you can see the big picture. Knowing where income and expense trends lie lets you make smart choices.
Manage and Track Your Budget: A budget doesn't do much good if you only think about it once a month. With Mint, you can review your budget at any time, and see whether adjustments might be in order. You can also experiment. For example, adding a new category or plotting a different course for expenses and savings contributions lets you determine if there's a better way to manage what you've got.
Mint.com has all of your budgeting needs rolled into one tidy package. If you've never created a budget and have no idea where to start, or if you've got years of experience, there's something here for everyone.
Mint makes budgeting simpler. You can start out the New Year with the same plans as last year, or you can make 2014 your year to live with less financial stress and more control than you've ever had before.
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