By Listen Money Matters

MASTERING

The Quickest and Easiest Way To Get Started Budgeting

MINT

When I was young I distinctly remember my parents sitting down every month to go over “the books”. In the beginning they didn’t have a lot of money and wanting to be able to feed the family they had to count every dollar. There was a lot of Ramen - not so much because it was tasty but because it was cheap and we didn’t have much money to spend. Every trip to the supermarket was accompanied by a calculator.

What stuck in my head most was how they balanced their checking account and made sure they had enough money to pay the bills. My parents would sit down at the table with a massive pile of receipts, their checkbook log, a calculator and a ton of coffee. They would proceed to total everything up, trying to find incorrect expenses by hand and determine how well they did at keeping their heads above water for that month.  It took them a very long time and it often needed to be done at least twice to check their math or figure out why they each came out with different numbers. That was the joy of the early 90‘s.

Fast forward to 2013 and while the importance of feeding your family hasn’t changed, the process in which you can track your spending has. Gone are the infinite piles of crumpled receipts and check books - we now have technology to help do the dirty work for us. That’s where Mint.com comes in.

Mint is the easiest and most hands off tool out there to help you keep control of your finances. It will automate most of the annoying work like budgeting and finding out of place expenses so you can focus on living and not on

INTRODUCTION

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constantly maintaining your stash. Best of all it’s completely free. There isn’t even an option or tier where they could charge you money.

Mint’s combination of easy automated money management is a game changer.  Now the barrier to having healthy finances is within reach and accessible to even the most math illiterate. The only requirement is occasional internet access with your computer or smart phone.

Budgeting is the single most important step towards financial security, retiring early and doing the things you always wanted to do - like travel to Australia. In this book we will not only show you how to use Mint like a pro so your stash grows quick but we will give you easy to follow guidelines and actionable tips so that you can start fixing your finances now!

Expect a lot of screenshots and detailed explanations so you can learn how to make use of Mint quickly and completely. We want it to be easy for you to not only grow your savings but spend as little time as possible managing your money. The goal of budgeting and using Mint is so that the details of your finances can fade into the background and you can focus on living your life, not counting pennies.

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1. Mint Anatomy

2. Creating and Setting Up Your Account

3. Setting Up Alerts, Reminders and Your Profile

4. A Quick Tour of the Mint Overview Screen

5. Mint Organization 101: Categorizing Your Transactions

6. Finding and Investigating Questionable Transactions

7. Creating a Budget and How to Stick To It

8. Using Trends to Make Decisions

9. Setting Obtainable Goals

10. Tracking the Success of your Investments

11. Mint On The Go

12. Mint For The Entrepreneur

13. Mint For The Early Retiree

14. Mint For The World Traveler

15. Conclusion

16.Disclosure

TABLE OF CONTENTS

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CHAPTER 1MINT ANATOMY

Mint aims to be the command center of personal finance.  The executive dashboard of your financial health.  Mint tracks your spending, analyzes trends, tracks and suggests budgets, helps you set and meet your goals, keeps tabs on the growth of your investments, alerts you to abnormal behavior and makes suggestions on ways to get the most out of your financial accounts.  For most people Mint is robust enough to be the only financial tool they use.

Before we explain all of the pieces of Mint in more detail I want to address the single biggest concern that you probably have with Mint.  Security.  This is always a very important topic in technology and especially so when it comes to your hard earned money.

Mint uses SSL encryption on par with what’s required of financial institutions.  That means that all communication between you and Mint, namely your password and transaction details are encrypted so well that at this point in time it is virtually impossible for someone to intercept and decrypt this data.  Beyond the encryption of your password and transactions, Mint is by design, read-only.  That means Mint can download your financial transactions and report on them but you can’t transfer your money or make any changes to your accounts.  If you can’t transfer money or make changes, neither can a deviant trying to access your information.  Therefore in the worst possible scenario that an attacker gains access to your Mint account there is no meaningful damage that can be done by an attacker beyond mess with your budgets and goals.

Now on to the good stuff - the features of Mint, what they do and how they will help you in your quest for financial mastery.

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ALERTS AND REMINDERSOne of the most important tools that Mint provides to help you set your finances on auto pilot is in their Alerts and Reminders system.  Think about how freeing it is on your mind to know that you never have to remember when a bill is due again because Mint will remind you.  Never worry if your spending is getting out of control on beer because Mint will alert you.  Setting up these tools will help you spend less time worrying and more time doing the things you actually want to do. You can learn more about this in Chapter 3.  

TRANSACTION TRACKINGThe cornerstone of healthy finances is knowing how much money is coming in each month and how much money is going out.  Beyond in and out, it’s also really helpful to know exactly where your money is being spent because only once you know where it's going can you bring spending under control.  Mint truly shines in this area as it automatically grabs all of the transactions for all of your accounts AND automatically categorizes them.  It might sound obvious to categorize pizza as food but Mint are the first ones to do it really well.  You can learn more about this in Chapter 5 and Chapter 6.

BUDGETING AND GUIDELINESThe bread and butter of Mint is its budgeting tools.  Most of the features of Mint are built around budgeting or complement this feature in one way or another.  Beyond it being the core of Mint, it should really be the core of your

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approach to financial independence.  Without a strong budget it will make saving very difficult and the less you save, the longer and later in life you will be working (more on this in Chapter 14).  On top of budgeting, Mint can also provide some guidelines based on what other people spend who are the same age as you and live in the same area.  This can be especially helpful in determining if your budgets are reasonable or if you are grossly overspend in an area and just don’t realize it.  You can learn more about this in Chapter 7.

TREND ANALYZINGOnce you have your transactions properly categorized you need to look at summaries of that information so you can make spending decisions.  For example, do you know how much you spend a month on Alcohol and Bars?  Do you know if that number is going up or going down?  Would you be able to afford a new laptop if you cut that number in half for three months?  These are some of the kinds of questions that could be answered by Trend Analyzing.  The ability for quick instant reports makes Mint an extremely powerful budgeting tool because it helps you pinpoint pain areas so that you can focus on reducing your spending where it counts.  You can learn more about this in Chapter 8.

SETTING FINANCIAL GOALSYou aspire to things like early retirement or owning a home - and you should.  Unfortunately life doesn’t just give you what you want.  Usually you need to work and save for it.  Maybe you want to renovate your kitchen, go on a huge family vacation or just build a rainy day fund for emergencies, either way you will need set these as goals so that you can slowly work towards making them a reality.  Mint’s Goal setting tool allows you to do this in such a way

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that it integrates into their budgeting tool seamlessly so that even saving can be easy and automated. You can learn more about this in Chapter 9.

INVESTMENT MONITORINGIt’s great that you’ve saved money and even greater that you’ve decided to put these savings into investments as you’ll get a much bigger return there than squirreling it away in your savings account at zero point nothing percent interest.  Mint can help you not only track your investments in a simple way but help you track your gains against common market benchmarks so that you can quickly and easily tell how well your investments are doing. You can learn more about this in Chapter 10.

SAVING SUGGESTIONSMint takes everything they’ve learned about you and instead of showing ads, provide you with recommendations on how to further optimize your finances through the proper use of accounts.  Based on your spending they may recommend using a special credit card to save more on Gas or Restaurants.  They may even recommend checking accounts that will enable you to reduce the overall amount of bank fees you pay per year.  We do find the tool useful but have had varying levels of success following their suggestions.

We talk about this feature in various levels of detail throughout the book, however we decided not to dedicate a chapter on it as the tool is very self explanatory and very much geared toward your own financial situation.  We also see it as a pleasant and useful bonus to Mint but not part of its core functionality.

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CHAPTER 2CREATING & SETTING UP

YOUR ACCOUNT

First order of business, you'll need to create an account for yourself.  If you have an account already, great, if not, just go to: Mint.com and sign up.

Signing up for Mint is a relatively quick process being that all they require to signup is your email address, a password and your zip code.  If you’re wondering why they need your zip code, it’s for some cool recommendation features they have.  

Basically, after you get started, they will analyze your spending habits coupled with where you live and recommend different types of accounts that will save and possibly make you money.  A perfect example of this is where they find you credit cards that give rewards highly in tune with your spending habits.  

The recommendations may say things like “Based on your restaurant spending habits we recommend you switch to Discover and save up to $200 a year.” While not all the recommendations make a significant difference, I’ve found it worthwhile to occasionally check in on their recommendations as some truly are worth it.  You can find these recommendations under the top menu tab “Ways to Save” after you’ve signed up.

Once you’ve created your account, verified your email address and logged in we can get to the meat of this chapter - adding in all of your financial accounts.

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ADD IN YOUR ACCOUNTSTotal time: 20 minutes

Now we’re going to add in all of your checking accounts, saving accounts, credit cards, mortgages, investment accounts, 401k’s, IRA’s, etc…  Everything.  No stone left unturned, we want an absolute complete view of your financial situation.  Maybe your finances suck and are painful to look at but obviously ignoring it didn’t solve the problem so we’re trying something new here and be proactive.

In order to start adding your accounts you will need to click the little compose icon on the left menu next to the Accounts header.  If you find that a bit confusing you can just refer to Figure 2.1.  You can also access your

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accounts from any page in mint via the Accounts link at the very top of the page to the right of your email address.  That said, you really won’t be coming back to this screen very much, only when you get a new financial account.

Once you’ve got the account editor open it’s time to get to work adding all of your financial accounts.  If you focus and just get it done, this whole process should take at most 20 minutes.  Remember, the ultimate goal of this book is for you to spend as little time as possible on your finances so if you focus and just get it done you’ll never have to worry about this again.From the accounts editing screen, go ahead and click “+ Add Account”.  From there you’re going to type in the name of the financial institutions that you have accounts with and add them in one by one.  Leave nothing out - especially not retail store credit cards like the Macy’s Card.  I would definitely recommend that you also fill in any account limits or APR details if they don’t get auto populated.  This information will help you get maximum value out of the Ways to Save section.

You will notice that there are two other Account seconds beyond Financial which are illustrated in Figure 2.2.  The two additional sections, Real Estate and Other will be useful in creating a more realistic picture of your

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financial situation even though most of the information in these sections will be estimates.  For example, if you own a home you can add the address in the Real Estate section and Mint will add the property’s estimated value to your account.  This is important because the difference between the value of your home and its mortgage is a significant part of your overall financial health.

Occasionally you may have to come back to the accounts screen if your bank updates its security process like when they make you answer new security questions.  Generally speaking, you wont need to come back to this screen unless you open a new account (like my favorite, Betterment).

Lets move on to configuring one of the most useful features of Mint - Alerts and Reminders.

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CHAPTER 3SETTING UP ALERTS,REMINDERS & YOUR

PROFILE

One of the most powerful features of Mint is it’s ability to fade into the background so you don’t have to worry about money.  A big reason this is possible is due to their robust Alert and Reminder system.  Mint can alert you about everything from breached budgets to suspicious spending and even when your next bills are due.  If you plan to get the most out of Mint and spend as little time as possible on your finances than setting this up should be a priority.  Luckily it’s very easy and should only take you 10 minutes.

SETTING UP ALERTS, REMINDERS AND YOUR PROFILETotal time: 10 minutes

First lets start with your profile which can be found under “About Me” as illustrated in Figure 3.1.  The main purpose of this section is two fold.  The

biggest reason is that much of this data will be used to help improve your

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Ways to Save recommendations.  However, the much more interesting use for this information and the reason I fill the fields in is their demographic comparisons.  

Throughout much of Mint you will be able to find comparisons to your situation with others who are like you in both age and geographic location.  For example, I find it very interesting to know the average of what people like me spend in various categories like Alcohol & Bars.  This information can be of great use when you are creating your budgets as well as reviewing past expenses.  I’m not going to go into too much detail on this here as it’s discussed in Chapters 7 and Chapter 8.

Now on to the good stuff - setting up our reminders. Click on Alerts & Reminders in the account editor window that you should still have open.  You’ll notice at the top it will show your email address as the primary address and then there is a slot below it called secondary address.  If you have a significant other or family member that would be interested in your account’s alerts then go ahead and add them here.  The path to wealth starts with complete financial transparency between you and those you share your financial future with.  Not only will they help you achieve your goals but adding their email here will automatically keep them in the loop and prevent many future fights.

Below the email fields you can set some basic settings like how often you want to have summaries emailed or texted to you.  I think a healthy selection is weekly.  It’s neither too frequent or too infrequent.  When you get the summary all you need to do is glance at it for about 10 seconds and if nothing looks out of the ordinary then you’ve successfully completed a week of having your finances on autopilot.  If you do see a possible issue then it will let you get in front of it and resolve it quickly before it becomes a bigger

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problem.  More details on investigating questionable transactions can be found in Chapter 6.

Below your basic email settings  you’ll see a configuration list on what type of alerts you want to receive, how you want to receive them and what their thresholds should be.  Below I’m going to detail the different alerts along with if I think you should set up the alert and what sort of threshold value you should set it to.

Low Balance:  I have this alert enabled at a threshold of $100.  Simply put it’s an early warning sign that you are running low in a specific account and may be nearing the overdraft zone. After paying enough overdraft fees in college I realized they were easily avoided by receiving an occasional alert email.

Bill Reminders:  I live off of these alerts.  I’m very diligent in paying my bills and I *almost* never forget. That said, sometimes I do forget about my bills that can’t be automated.  Life happens and even the most financially obsessed of us are liable to forget a bill.  Enabling this is a must!  I have my alert set for 7 days notice.

Credit Available:  This alert will let you know when you’re available credit drops below a certain number.  Since you’re focusing on reducing debt, not increasing it, this alert is rather meaningless.  Personally, I think it’s a terrible metric to focus on.

Total Credit Available:  I usually don’t have this turned on as my debt is low and day to day I generally don’t care about my credit score.  However, when I was about to buy my condo I did have the alert enabled so I could remain on top of things.

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Unusual Spending:  Another hugely helpful alert that I have enabled.  If you never spend in increments above say $500 then it is very helpful to set this alert as it will let you know when weird things are happening in your account.  Even if you want to set a very high threshold here, I think it’s important you have it enabled.

Over Budget:  When you go over a budget, you will get alerted.  If this alert gets annoying it means you’re terrible at either setting a realistic budget or sticking to one.  Definitely enable this and read Chapter 7 for more details on how to create a budget like an adult.

Interest Rate:  News flash, the interest rates on your credit cards are terribly high and the interest rates on your checking/savings accounts are terribly low.  You don’t care about these numbers because your debt is quickly disappearing and you invest your money with Betterment instead of keeping it in a savings account.  Right?  If you have any doubts about the investing end of things check out The Betterment Experiment where I show you how I’m doing investing with my own money.

Trade Commissions:  If you use a brokerage account a buy an equity or bond, you will you be hit with a fee 100% of the time. Therefore this alert just tells you the obvious so feel free to keep it disabled.

Bank Fees:  You better not be paying any bank fees, like ever.  However, some banks can be really sneaky like Matt describes in his article where he switches to a new bank.  I would always keep this enabled so you can keep your bank honest.  Set the alert to $1.

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Large Purchases:  Spouse buying a new phone under your nose?  Someone stole your credit card number and bought 8 iPads with it?  You would never know if you had this alert disabled.  Mine is enabled and set to $500.

Auto Insurance Spending:  Don’t enable it, it’s basically just going to tell you to switch to Geico ;)

Health Insurance Spending:  I personally didn’t find it helpful as I get my health care through my job but if you’re in a different situation you may find this useful.

Home & Mortgage Notifications:  I like to know when my home increases in value so I have this alert enabled.  It’s more of an FYI type email and for most people I’d say keep it disabled.

Credit Score:  Mint uses your credit score information to recommend credit cards to you in the Ways to Save section.  I’m not perpetually searching for new credit cards so I have this alert disabled.  You probably don’t need this either.

401k Rollover:  Rolling over a 401k isn’t as simple and straight forward as “always do it” so I would disable this alert.  If you want to know more on what you should do with your retirement accounts, listen to our 7th Podcast episode, To Roth or Not To Roth.

Goal Notifications:  One of the greatest joys of improving your finances and building wealth is being able to use some of that wealth for things you really want/need.  The best way to do make these purchases is to set goals for them.  We discuss setting goals with Mint in Chapter 9.  Enable this alert!

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CHAPTER 4A QUICK TOUR OF THE

MINT OVERVIEW SCREEN

So, you’ve successfully created your Mint account and added in all of your accounts.  Great job!  When you first log in you’ll be looking at the Overview screen which should look very similar to our screenshot of it in Figure 5.1.  In this Chapter we’re going to describe all the various sections of this page, what they mean and why most of the times that you use Mint you will just be briefly glancing at this screen.

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ACCOUNTSThis section is the core of Mint - a nice consolidated list of all your financial accounts and their balances.  Most of the times that I log into Mint it’s to check on my account balances.  Since I subscribe to a bunch of Mint alerts I only log in to see these numbers when I’m making some big purchases where I need to make sure I have enough cash to cover the expense.  Perfect examples are my wedding, remodeling my kitchen and when I got a new iMac after my laptop died.  However, unless things are really down to the wire you won’t need to check these numbers much if you subscribe to Mint’s weekly summary email.

My favorite part of the whole Overview screen is at the bottom of the Accounts list and it’s called Net Worth.  Your Net Worth is the sum of all your assets (savings accounts, property, etc…) minus all of your debts (credit cards, mortgages, etc…).  A positive Net Worth indicates a healthy financial life and the larger the number obviously the better it is.  This number is very much something to get excited about and strive to maximize as this number is one of two major numbers that will be able to tell you when you can retire.

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TRENDSRight below the Accounts screen are some basic trends.  The trends are pretty straight forward and provide a nice clear overview of the current state of your short term finances and the direction you are heading in.

A very helpful short term trend is your Cash vs. Credit Card Debt.  While my Net Worth is a positive number, there have been times that the Net of my Cash vs. Debt is negative.  What that means is the cash I have on hand is not enough to cover all of the short term debt I have (credit cards, not mortgages).  A quick glance at this graph can tell you if you might be in trouble.  If you can’t cover your credit card payments then you’ll be hit with interest and that sucks - especially at well over 15% per month!

The last graph on the side bar is your Net Income graph.  This will tell you how you’ve done month to month for the past 6 months.  Have you been saving a lot of money?  Spending more than you make?  Your answers can be found in this graph.  A great rule of thumb for a healthy financial future is to have at least 4 out of the 6 months as positive income with your overall Net as a positive number.  However it is understood that sometimes you need to

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make big purchases (like remodeling your home) so as long as you save in the prior months you don’t need to be so concerned with going negative here.

ALERTS AND ADVICEThe alerts section is filled with the alerts described in Chapter 3.  Here you can see the history of all the alerts you subscribed to and even some value add type messages like “You’re using 31% of your total credit, which could lower your credit score.”  You should be getting most of these by email so this section is more just for your reference than anything else.

Advice is an extension of the alerts section with a bit more focus on the “Ways to Save” type recommendations.  Here you might see things like “You go shopping a lot. Start earning 5% cash back.”  Interesting stuff but definitely not critical.

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UPCOMING BILLSThis feature is huge, I love it.  It makes planning expenses a breeze so that you can make sure all your bills get paid on time and in full (hopefully).  

Basically, it’s a timeline of the next 4 weeks that both shows you when your when next bills are due and how much you owe.  The really helpful part is when I say how much, I don’t mean your total credit card bill.  As you know, you only need to pay last months expenses and that’s exactly what you see in this section.  Think of all the time you will save just by not having to log into every credit card account, phew!  It’s even cool enough to give you little bar graphs which give you a quick idea on how painful that bill upcoming is going to be.  

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BUDGETMy personal favorite section and the heart of Mint.  We will go into depth on creating a budget you can actually stick to in Chapter 7 but just know for now that this section will give you a nice quick overview of where you stand with your budgets.  The budget overview is so slick it even shows you a line where roughly today is in relation to the month.  This way, you know if you’re ahead or behind your target for the month.  While this doesn’t work for every category (like mortgage or rent payments), it could be very helpful for a budget that you chip away at every day like the one that tries to control your Coffee addiction.

GOALSThe Goals section is a bit more like a To Do list than a section with dollar signs and numbers.  While Mint does track your goals in terms of dollars across a specific set of accounts, they also try and extend the concept of a

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goal beyond something that is simply financial.  The Goal tool which we will describe in Chapter 9 not only has a monetary target but it also has a set of “next steps” to help make sure you don’t forget to do the chores associated with your goal.  For example, if your goal is to remodel your kitchen Mint will automatically add a few basic next steps like “Estimate the costs” and “Find a contractor”.  These next steps are what you will see in this Overview section.

PORTFOLIO MOVERS & SHAKERSHere you’ll get a quick glance at the major changes in your investment portfolio over the trailing 7 days.  While this section can be pretty interesting I recommend you largely ignore it.  Why?  Because you’re not a day trader - and you never will be.  

Besides the fact that 79% of all portfolio managers fail to beat the market (average), active investing goes against our philosophy over at Listen Money Matters of set it and forget it.  You will win in the long term so just buy and hold and ignore the daily or weekly fluctuations in price.  Looking at this section will only make you crazy.

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WAYS TO SAVEHere is where Mint tries to take all of that data you give it on where you live, your age, what you spend money on and attempt to give you meaningful recommendations.  Truth be told, not all of the recommendations are that great but they’re still worth a look.  I maybe look at it by accident once every few months and even then I’ve yet to actually take a suggestion here.  Although, it might not be too hard to believe that my accounts are already heavily optimized :)

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CHAPTER 5MINT ORGANIZATION 101

CATEGORIZING YOUR TRANSACTIONS

One of the main purposes of Mint is to help you budget while spend as little time as possible doing it.  One of the ways they help save you time budgeting is by automatically categorizing transactions.  For example, Mint knows that Starbucks is Coffee so they’ll automatically categorize it as Coffee Shop.  Many times Mint is correct in automatically assigning categories but some times it’s not, or it just doesn’t know the right answer.  For those times we have the ability to set rules so if Mint doesn’t know that the withdrawal from your account on the first of every month is your Mortgage/Rent then you can set it as such and Mint won’t forget.

In this chapter we’re going to discuss some guidelines to help you decide how to categorize your transactions using sub categories and tags.  We’re also going to discuss how to automatically set payments as a specific transaction like listing your mortgage payment as Mortgage in Mint.

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CATEGORIZING YOUR TRANSACTION In order to get started on categorizing your transactions, go ahead and click Transactions in the top menu.  From here you can see all of your recent transactions across all of your accounts in chronological order.  For now, lets

focus on Uncategorized transactions.  Go ahead and click the first uncategorized transaction on your list and then click the Show all Uncategorized button on the right side of your transactions (see Figure 5.1).  Now you should be looking at a list of only your uncategorized transactions.  Perfect, time to get to work!

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Your first uncategorized transaction should still be selected and now we’re going to expand it to see it in more detail.  To do this, click Edit Details directly below your highlighted transaction (see Figure 5.2).  

From here you can see the full transaction name, what credit card it came from along with a few options like Split, Remind Me, Tags, Notes and This is a Duplicate.  First, lets focus on the main category of your transaction so go ahead and click the expansion arrows for your transactions categories.There are a ton of categories to choose from, sub-categories within those

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categories and even the ability to further expand the default list with your own custom sub-categories.  We’re going to get into how best to categorize a transaction in the next section so for now we’re just going to go over the mechanics of it.  Go ahead and select a top level category that you feel best describes this transaction.  If you’re feeling ambitious, select a more detailed sub-category instead.  You’ll notice I selected Food & Dining -> Restaurants in Figure 5.3

Woah, looks like a new section of the transaction details appeared called Rules.  In this rules section it will say something like “Always rename Seamless and categorize it as Restaurants”.  This is how you can train Mint to automatically categorize your unique transactions so next time it happens automatically.  The ultimate goal is to slowly train Mint so that you rarely have to do this in the future.  Once you click the check box, the text in the rules section will add an additional line “Future Seamless purchases will be renamed to Seamless and categorized as Restaurants”.  This line tells us that not only will Mint categorize future transactions like this but it will use whatever name we changed the transaction to (incase we changed the transaction title to make it more readable).  After you’ve checked the box, click I’m Done.  You should notice that Mint categorized the transaction, removed it from your list of uncategorized transactions and removed any others that fit the same criteria.

Your first order of business should be to go through all your uncategorized transactions and categorize them setting rules when necessary.  However, before you get started, please read the rest of this chapter.  In the below sections we’ll discuss best practices here, using tags and splitting transactions.

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THE CATEGORIZATION STRATEGYWhile it may seem obvious to categorize Seamless under the category Restaurants, what might not seem so obvious is how detailed you need to get with your categorization, how to handle checks or credit card payments and more importantly, what the ultimate goal of all this effort is.

As it turns out, the biggest question, “How detailed do you need to go?", doesn’t come with with such a clear answer.  The short version of the answer is do what works best for you balancing your efforts with the results you can achieve in cutting your spending.  The long answer however requires that we first understand the ultimate goal of this exercise.

Simply put, the reason we categorize transactions is so that we can effectively budget and the reason we try to effectively budget is so that we can save money.  In order to effectively budget, the way in which we categorize our transactions needs to be realistic and sufficiently detailed in our problem areas.  For example, if you spend $15 a month on beef jerky, skittles and almonds there is no reason so create subcategories for beef jerky, skittles and almonds as your spending on them in total is very small.  You would do just fine categorizing them all as Snacks and Drinks under the Food & Dining category.  However, you may have a food spending problem like I do so it would help to not only sub-categorize every expense but create new sub-categories that make more sense to you.  

For example, I know I spend a lot on food every month but when I look at my transaction trends (more in Chapter 8) I can start to pick out patterns.  For one, I get a lot of food delivery for dinner and in the past I did it so much that

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it became a major monthly expense for me.  Knowing you have a problem is half the battle, the other half is focusing on it, setting goals and tracking your progress.  In order to fully understand my Seamless.com addiction, I created a new sub-category under Food & Dining called Seamless.  I then proceeded to add all of my Seamless.com transactions into that category.  From there I created a specific Seamless.com budget and every month focused on slowly cutting that number in half.  

If I didn’t create a Seamless.com budget I could have still tracked my spending under Restaurants category but it would have obscured my takeout spending and made it more difficult for me to track.  My ultimate goal is to spend less time managing my money so using Mint to automate my transaction categorization and then automatically alert me when spending on Seamless became out of control was an obvious choice.

Don’t worry if you don’t fully understand how it all works beyond categorizing your transactions as we will get to that in later chapters.  For now, focus on accurately categorizing your transactions being detailed where necessary and always trying to set rules for Mint to do the work for you.

WHEN TO USE SUB-CATEGORIES AND TAGSOne way to provide more detail in your transaction categorization is to use sub-categories like I described above with my Seamless.com addiction.  Another way is to use tags.  It’s also possible to use both and in some situations doing this can provide you with even deeper insight into your spending and more importantly, easy ways to cut your wasteful spending.

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First I just want to touch on sub-categories.  I would say in 85% of the cases, it makes sense to use a sub-category.  Maybe even 95% of the cases.  Sub-categories are extremely helpful in locating trends and problem areas of your spending.  Like in my example above, its not that I need to eat less to save money, I just need to spend less on delivery food which is usually about 3-4x more expensive than just making something for myself at home.  However, over categorizing can be detrimental to your efficiency causing you to spend more time managing Mint and making trends more difficult to spot.  

An over sub-categorizing example may be in the Personal Care category, a generally ambiguous category that tends to have low monthly spending.  You can categorize spending as Hair, Laundry and Spa & Massage by default and then you can also add in some of your own. When I first started using Mint I created three of my own sub-categories under Personal Care called Dry Cleaning, Pet Care, Pharmacy/Toiletries.  Now while you may recognize the difference between Laundry and Dry Cleaning expenses, you may also realize that they are very small spends overall providing little value on a budgeting level.  However, when I start to look at spending trends I’m now unable to easily track overall clothing related expenses since I’ve forced very similar expenses into different sub-categories.  If this whole thing sounds complicated, that’s because it is and I made it so by not being thoughtful about my categorization habits.  Be sure to sub-categorize, just don’t over do it.

For a great use of tags, lets take a look at one of Mint’s default tags, Lunch.  When I have lunch at work I either bring it from home, order it from Seamless.com or go out to eat at some place with my co-workers and as a result this spending winds up falling into three separate sub-categories: Groceries, Seamless and Restaurants.  While this helps me on a budgeting level reduce spending in specific categories I wind up missing an overall easy

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saving insight.  My spending in each of these categories may be reasonable every month so I might just leave things as is.  However, if I tag every lunch expense as Lunch, then I can later review my lunch tag and see the astronomical amount of money I spend on lunch.

Another great example for useful tagging is if I wanted to compare the overall cost of two vacations.  While I may categorize and sub-categorize all of my individual expenses from a vacation like airfare and hotels, I may be interested to see which was the cheapest overall trip because price usually does not correlate to at the amount of fun that I have and I want to maximize my fun.  Simple tags like Puerto Vallarta or London could easily solve this problem.

THE WEEKLY PRACTICEWhile this may seem like a lot of work, in reality it takes me about 10 - 15 minutes to categorize all my transactions for the week.  Over the course of a month that almost always adds up to less than an hour.  The key to having my finances largely on auto pilot is breaking the task into small manageable chunks and leveraging Mint to save me time in the future through automatic rules.  As a result, most of my personal finance work is done on mass transit during my daily commute or when I’m waiting on line for something.  This helps me turn something like waiting in line which is usually a waste of time into something productive.

It is critical for your success that you stay on top of your spending and I’ve found that the easiest way to do this is a weekly practice.  Pick a time or location every week where you can set aside those 10 - 15 minutes to categorize your transactions and just rock it out.  You likely spend more time on Facebook a week and you get absolutely nothing in return for that time so

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the least you can do is spend a tiny amount of time investing in the future you.

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CHAPTER 6FINDING & INVESTIGATING

QUESTIONABLE TRANSACTIONS

When it comes to money, bad things can happen.  Companies may charge you more for things that you agreed upon or they could charge you twice.  Maybe you canceled a subscription for a gym and they still charged you this month anyway. Maybe your credit card number got stolen and the criminals are slowly spending your money buying themselves nice new iPads.  Even more likely is that your bank charged you a fee that you don’t agree with and want removed.  These things happen with such frequency that I’m certain a similar situation has happened to you.  However, what I’m even more certain about is that if you don’t use a product like Mint you probably paid for some of these things you didn’t agree to but never realized.  All of that is about to change.

In this chapter we’re going to go over some techniques we can use to quickly and easily locate these transactions so we can take action.  It’s one thing if you’re spending your money on a gym membership you never use but it’s another thing if someone else is spending that money for you.

EVERYTHING CATEGORY VS UNCATEGORIZED VS MINT MISTAKESAs Mint diligently processes your transactions and attempts to categorize them, one of three things can happen unexpectedly.  

First, Mint might not have a clue how to categorize a transaction so it just leaves it as Uncategorized.  This is the easiest to deal with as we we discussed handling this in the previous chapter and is now part of your Weekly Practice.

In the second situation Mint may properly categorize a transaction and your eyes may notice this when you’re quickly doing your Weekly Practice on your

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morning commute.  However, if the category for this transaction doesn’t fall into one of your budgeted categories it will move into the Everything bucket of your budget as illustrated in Figure 6.1.  

The problem with this is that by default the budget set for Everything is $0 so any spending here actually won’t alert you if you’ve enabled the alerts for when you go over a budget.  The easiest fix for this is to just set a budget for Everything to $10, this way you can be alerted when something unexpected happens for further investigation.

Finally, possibly the trickiest way for a transaction to slip by you is if Mint improperly categorizes it as something you already have a budget for.  Then, if you don’t exceed your budget which is the ultimate goal, you will never receive an alert.  The only way around this is to do a quick review of all budgeted expenses at the end of every month.  Overall this should only take 10 - 15 minutes as you’ve already spent time categorizing your transactions.  Here you’re just going to quickly glance over your expense list in each budget and look to spot something that either doesn’t belong or you don’t understand.  This is how I’ve found things like gyms charging me after my membership has been canceled.  

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Sure, it’s starting to look like we’re spending a lot of time on transactions but remember, when we add it all up the total time spent is less than 1.5 hours a month.  That’s pretty good for a healthy financial life.

INVESTIGATING A QUESTIONABLE TRANSACTIONIf you find an unexpected transaction you’re going to have to dig into a bit more detail to see if the expense really came from you and is legit.  Often times it is just a transaction that you forgot about however it’s worth investigating for the times when it is actually in error.

Once you’ve found a questionable transaction you should expand its transaction details by clicking the Edit Details tab directly below the transaction.  In there you’ll notice a nice bolded blue link over the transaction name.  Go ahead and click on the blue link, it will automatically launch a Google search for that transaction.  This way you can learn a bit more about the merchant and if others have experienced the same problem that you have.  After checking Google and racking your brain if the transaction is still an issue, you can always call your credit card company and try to get the unexpected charge removed.

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CHAPTER 7CREATING A BUDGET AND

HOW TO STICK TO IT

This chapter is easily the core of the book as it’s based on the central feature to which Mint was created.  In here we’re going to go over the act of creating a budget, how to decide on what your budget should be for various categories and how to actually stick to your budget.  On top of that we will provide some general guide lines you can use when creating your budget so you know if the budgets you create actually make sense.

HOW TO CREATE A BUDGETMint makes creating a budget a very painless process.  In order to get started click on the Budgets link in the top menu bar.

If this is your first time ever budgeting, allow me to explain what we’re about to do and why you should even care.  If you’re familiar with budgeting feel free to skip to the next paragraph.  Budgeting is, in its core, a way for you to make sure that you have enough money to cover all of your expenses. Expanded a bit further, budgeting is the core way at which you can be sure that every month you spend less than you earn.  In order to control our spending we first need to know where we are spending our money, something we do by categorizing our transactions.  Once everything is categorized we set budgets as a way to forecast our spending and keep it under control.  A perfect example of effective budgeting may be to cut your spending on eating out in half so that you can save some money every month and sign up for a gym or simply to make sure that you have enough cash available at the beginning of next month to pay your Rent/Mortgage bill.  I believe that the true path to wealth begins with solid budgeting. Let’s get started!

First order of business is to budget your income.  The easiest way to do this is to look at last month and sum up all of income.  Fortunately, Mint already does this for you in the Overview screen under the Trends and Net Income

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section at the bottom left part of the page (which we discuss in Chapter 4).  Take the income portion of your Net Income for last month and this is what we will use for now.  This is something that you will fine tune over time.  Remember, it’s always best to underestimate this number so you can stumble into “accidental savings”.

To create this income budget and all your expense budgets (which we will soon discuss), you’re going to start by clicking the Create a Budget link on the top of the budget page.  

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After you get the Create a Budget popup click on the category selection arrow much like we did when we were categorizing transactions (see the image above).  From there, highlight over Income and select Paycheck.  Go ahead and put the amount you got from looking at last months income Overview or Trends report.  If you don’t have a steady paycheck to count on then try and estimate how much you will make during the month.  Entrepreneurs are more likely to experience uncertainty here and we will discuss a lot more Entrepreneur specific situations in Chapter 12, Mint for the Entrepreneur.

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We will talk more specifically about how to create budgets for your expenses in the below sections but I did want to take a moment and point out a few cool features of the Create a Budget screen which are specific to when you’re creating expense budgets.  For example, sometimes you plan to only make an expense once and not every month like a gift for someones birthday.  If that’s the case you can go ahead and select the Once option under the When will this happen? section where normally it defaults to Every Month.  Another awesome feature is that little graph on the right side of the Create a Budget popup.  In there you can see your historical spending along with the United States average spending in that category.  This is a great way for you to see how terrible your spending habits are and motivate you to reign them in.  A great goal would be to meet or beat the US average.

GENERAL BUDGETING GUIDELINESBefore you get started budgeting it might be helpful to look at some general spending guidelines as it’s not always clear what is a reasonable amount to spend on something based on your income or personal situation.  For example, a great question might be, how much does it usually cost to feed one 12 year old and two adult mouths.  Below are some general rules of thumb along with recommendations by the USDA based on their research.

Rent / Mortgage Payments - You should not spend more than 1/3rd of your Real Monthly Income*.  So, for example, if your Real Monthly Income is $3,000 a month, your Rent/Mortgage payment should not exceed $1,000.  Like I said, it's OK for now if it does as we will address it later. *Real Monthly Income is the amount you get after the government takes their cut.

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Electricity + Heating Bills - This will vary depending on if you live in a house or an apartment.  That said, the number shouldn't exceed 1/3rd of your Rent / Mortgage payment.  Even if your bill falls in this very wide net, on the blog we will show you how to cut that bill without actually having to use less electricity or lower your heat.

Internet + Cell Phone Bills - You should not pay more than $60 a month for Internet (unless you absolutely need higher speeds for a home business) and your Cell Phone bill should not exceed $80 and that's me being generous.  Realistically you should be spending way less on your Cell Phone, even if you have an iPhone and that's something we will show you how to do on the blog.

Monthly Grocery Expenses - This number is really easy because the government tracks these numbers every month.  Simply put, one adult male can eat for less than $300 a month, an adult female can eat for less than $255 a month and each child (11 or younger) can eat for less than $265 a month.  If you want to be thrifty you can shave nearly $100 off of each of those numbers.  This is if every meal is either eaten at home or prepared and brought from home (like lunch at work).  For exact figures just check the USDA website.

Monthly Commuting Costs - This will vary so I can't exactly pin point it for you, however, it is very highly recommended that you do not drive to work, especially if you're having money problems.  It is the most expensive commuting option by far and despite what you may be thinking now, there are feasible alternatives like trains and carpooling.  It's also important to note that many people are literally driven into debt by cars.  Not only are there a TON of hidden costs, they are one of the worst investments you can make with your money as they lose value quicker than just about anything at that price point.

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HOW TO SET BUDGETS THAT FIT YOUR LIFEIf you have a spartan budget that takes care of your bare minimum basic needs and is something you enjoy then I commend you for it as you’re a better person than I am.  I, however, enjoy some of the finer things in life and don’t want to be constrained to a life where I have no fun.  I could always have water with dinner but if I had a choice, I’d rather have the wine.  If this resonates with you then I think we’re on the same page in this section because my goal in life is to make the future me happy as well as the present me - and yes, this is possible.

I find it easiest to back into my budgets based on the core needs and desires in my life.  For example, I love to eat out and even more than that I love to travel.  However, I want the power to be able to quit a job if I’m unhappy knowing that I will not be in deep financial trouble.  Even more so, I want to be able to be a stay at home father and enjoy more of my younger years doing things that I want and not stuck in an office working for “the man”.  So, if I had to distill my priorities into a short list it would be:  Retire Early, Travel Often and Eat out but not too much where it is no longer special.  Your list may be different and that is ok, just try and keep it relatively short and reasonable.

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Once you have your list you need to start backing into your budget.  Since you have roughly three priorities, there will be three categories where you will strive to focus your money so that you can maximize your happiness while building financial security.  So if I were to translate my three goals into budgeting terms I would be trying to maximize my savings to retire early, set aside some money every month using a Mint goal for travel and be flexible on my restaurant spending while not letting it get out of control.

How do you back into your goals?  Start with your core needs like shelter, food and utilities like electricity.  Use my guidelines from the above section and set them for this month.  Sure your expenses may be higher than you’d like to admit but that’s why we budget and track this stuff, so we can get everything under control.  After you set up your core stuff, take a look at what you have left.  Mint will show you a nice little chart on the right of the budgeting page that is your expected income for the month minus your expected expenses (see Figure 7.3).  The number at the bottom is what we have left to work with and how we’ll back into our priority budgets.

Is the remaining amount for your priorities after listing all your expenses what you were hoping for?  Probably not and it’s something that we will have to work on.  Let this be your north star in personal finance and during your use of Mint.  Only you can decide where your money goes, I just hope that it’s toward things that make you truly happy and not superficial things like new rims for your civic, because guess what - there will always be a new cool thing.  Plus, nobody ever thought you were cool because of the stuff you own.  Sorry.

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HOW TO STICK TO YOUR BUDGETWhat good is setting a budget if you don’t stick to it?  If you don’t plan on trying to stick to it then don’t waste your time.  Below are my easy steps for sticking to a budget.

1. Decide who you’re budgeting for.  Is it for your dog or your Mom?  I hope not.  You’ve gotta do it for you.  If it’s not for you it’s unlikely that you’ll actually stick with it.  Yes it will be some work but nothing good in life came to you without some work.  Also know that there is no financial situation too dire where fixing it is futile.  You’ve gotta start sometime so let that sometime be now.

2. Setup alerts.  Remember, the goal is to achieve your wildest financial dreams without dedicating your life to obsessively checking Mint.  Relax, keep your budgets in mind but let Mint do the heavy lifting.  When you breach a budget Mint will tell you and often times you can just cut your spending in that category for the rest of the month.  If you breach your movie budget for the month, sorry but you’re cut off, no more IMAX for you.

3. Mint has a weekly report, use it!  When Mint sends out your weekly report, look at it so you can get an idea where your money went because if you’re quickly approaching your budget cap then you need to slow down.  Enjoy your experiences, don’t pack them all into the first week so you have three weeks of no fun.

4. Find your spending leaks.  We’ll talk more in depth about this in Chapter 8 but just know that Mint has a powerful Trending tool that can help you

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put a stop to wasteful spending.  Did you know you spend $30 a month on ATM fees?  This is something easy to fix and once fixed will give you more money to put into other areas of your budget that need it.

5. Tell your friends and family.  There have been numerous studies that show one of the best ways to stick to a goal is social contracts.  When the people you care about start asking you about your progress it will help keep you in line.

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CHAPTER 8USING TRENDS TO MAKE

DECISIONS

A big part of budgeting is to help you control your expenses and make sure you have enough money to cover all your obligations like feeding your family.  Beyond that it’s an excellent planning tool for the future because retirement doesn’t just magically happen, you have to make it happen.  You can set arbitrary budgets and goals and try to meet them but why do the guess work when Mint already has the answers for you.

I’ve given a lot of lip service to my plans of retiring at 35 and a linchpin of my strategy is using Mint trends. When you’re busy living life sometimes you can’t see the forrest for the trees. If you knew you were going to spend $200 on coffee in the past three months, would you still buy so much of it?  What about if you knew running the air conditioner while you were at work would cost $100 every month you had it on?  Trends helps you spot these flubs and fix things going forward.  Lets dig into making the most out of these reports.

HOW TO USE TRENDSYou’ll find Trends on the top bar of Mint conveniently under the name Trends.

Once you’re looking at the trends page you’ll notice that the page is broken into four major components.  The main graph, the filters for the graph, the supporting data for the graph and the various canned graphs Mint provides listed in the left hand menu (Figure 8.1).

First, lets go over the various graphs that Mint provides:

Spending - How much did you spend in this time period? These graphs will break all of that down for you.

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Income - How much did you earn in this time period? A very important number, especially when it comes to the next major graph category.

Net Income - This graph is probably the most accurate picture of your short term financial health.  To get your Net Income you simply take everything you made for that time period and subtract all of your spending. 80% of the time

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this number should be positive and if it’s not then you’re really trending hard in the wrong direction. There is always opportunity to change but you should take this as a big huge warning sign or pat on the back as to how you’re doing.

Assets - Everything of value that you have.  Cash in your checking and savings account will show up here as well as things like cars if you add them into Mint.  If you own a home, it’s likely your biggest asset and as a result we will want to slowly make that a smaller and smaller percentage of your total assets.  Diversification, right?

Debts - Do you have credit card debt, student loans, a mortgage?  This is all tracked in the debts section.  In modern times this number will likely never be zero and that’s ok, it’s just important that this number stays at a manageable number so that it doesn’t artificially inflate the cost of your life through high interest payments.

Net Worth - My personal favorite, this graph is where I go to reassure myself on my financial progress as well as see how close I am to my goals (Figure 8.2).  Your Net Worth simply put is all of your Assets minus all of your Debts.

Basically, if you were required to settle all of your debts right now, how much would you be worth?  If you’re worth a negative number, don’t worry, that can be changed and knowing is half the battle.  It’s this number which you generally use to peg how close you are to retirement.

Ok, now that we’ve had a quick overview on the different graphs, we’ll also briefly go over the other major components.  Do make it a point to browse around the graphs and explore how they can describe your information.

Depending on what graph you have selected you’ll obviously see a different picture.  Interestingly, depending on the nature of the graph you select, Mint

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might show you bar graphs, pie charts or trend lines.  In some graphs you’ll even be able to choose the graph type you want (bar vs pie) and add comparisons side by side to your data like how other users in specific cities, states or even countries spend. You can even compare how you did year over year down to the smallest details.  Most of these graphs will be self explanatory but some of the deeper uses may not be so we’ll describe a few use cases in the other sections of this chapter.

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In each graph you’ll have the opportunity to filter the data being shown and much like how the graph type changes depending on the context of the report, the filters change as well.  For time based trending reports you’ll be able to filter on things like Last 3 months or This Year.  In places like the pie

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charts for By Category graphs you’ll be able to filter out specific specific categories, merchants, accounts AND filter on a timeline.  These filters are very powerful and we’ll use them in most of our investigative work in the following sections.

Finally, last but not least we have the raw data at the bottom of every graph.  Many of you may not be so interested in the raw numbers for the sake of numbers but if you want to nerd it out like I do this information can be very helpful.  See, for all it’s great features, Mint does have some limitations.  Namely, the fact that you personally can’t extend their graphs to mashups that they didn’t think of.  Personally, I have a detailed spreadsheet to track my retirement progress and clue me in on high level strategy decisions.  I wouldn’t worry too much about this stuff unless you’re in pretty solid financial shape.  Once you are I’d recommend heading over to the Listen Money Matters blog where I pretty much detail everything.  I want you to succeed and everything that I have and do either already exists on the blog or is queued up to be added soon.

Now, on to the specific actionable stuff we can do with all this data.

FIND WHERE TO CUTIn terms of the biggest bang for your buck, I think finding ways to cut out excess spending with little to no impact on your lifestyle is the main selling point of Trends.  It’s one thing to live your life oblivious to your wastefulness but it’s another thing to not occasionally reflect and try to change course.

It’s time that we dig deep into spending and optimize.  Go ahead and click on the Spending By Category graph, set the timeline to Last 6 months and select

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the bar chart view.  The bar chart view is less pretty than the pie chart but I believe it really hits home on exposing your weaknesses.

So, what you see is where all of your spending goes, ordered by size.  This is where we will start our spending hunt.  First order of business is to attack the Uncategorized category - you can use the same approaches we talk about in Chapter 5.

Once you’ve taken care of your transactions for the past 6 months, it’s time we dive into the the specific categories of your spending to find easy places for cost reduction.  For some general spending guidelines you can refer to Chapter 7.  The idea is to try and roughly conform your spending to these suggestions as they will help you keep your spending under control.

Beyond overspending, we want to try and find specific areas where we can reduce or optimize our spending so that we can save more without any major effects to our lifestyle.  While the specific categories you dig through will most likely be different from mine, I usually start with the biggest spending categories and work my way down.  Small cuts from top categories can amount to a lot of money over time.  My focus is usually in Food & Dining and Shopping because those are my biggest weaknesses.  Based on Mint’s stats, they are likely yours too so you’re in good company.

There isn’t an exact science to finding and cutting out the waste.  My approach is based upon fuzzy logic and differs person to person but generally I try to to ask myself a few questions while I look through the data:

What cost reduction involves the least effort on my part?  Usually this involves me going out to dinner one time less a month or skipping on buying those new shoes that I really don’t need.

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What spending can easily be replaced with something cheaper?  Just because things are expensive doesn’t mean they are quality.  Maybe the first coffee of the day can be taken at home on your couch with a french press instead of in the office after a trip to Starbucks.  You’ll probably enjoy it more and save a nice chunk of cash over the course of a month.  Or, maybe you could buy your toilet paper and cat litter through Amazon Subscribe & Save and skip going to the store and paying more than necessary.  What about switching from the $60/month gym to the $10/month one.  You don’t go anyways so quit wasting all that money for no reason.  You get the idea.

What spending is downright wasteful?  These days it’s an achievement if you’re not gaining weight.  We have less time to ourselves and the food we eat isn’t always the healthiest choices.  Maybe paying for the cab isn’t worth being on time.  Be 10 minutes late and walk, your body and wallet will thank you.

TRACK YOUR PROGRESSThe point isn’t to be militaristic about cutting your spending but smart, careful and gradual.  If you and your significant other enjoy going out to dinner a few times a month, don’t cut it down to zero and have a terrible time.  Bring it from 3 times to 2 times and save $100 by having a date night at home.  Simple and gradual changes can make huge long term impacts.

It’s just as important to track your saving and trend cutting progress as it is to actually do it.  For one, you need to celebrate the small victories but most importantly you need to see if what you’re doing is working.  Maybe you switch from weekly shopping at CVS to Amazon Subscribe & Save and after checking trends you realize you’re actually spending more because you’re overbuying.  Small increases in things like this aren’t always noticeable in day to day spending but are clear as day when you pull them up in trends.

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CHAPTER 9SETTING OBTAINABLE

GOALS

It’s one thing to save money but to what end?  Maybe you want a new computer or a new home.  Maybe you’re just saving for retirement or the much more ambitious early retirement.  Either way you’ll likely have a specific number or range in mind.  For example, if you were saving for a new Macbook Air 13 inch you would need to save about $1,200 once you include tax.  As a result, you would set your Goal at $1,200.

The difficult part is that your money is likely spread across multiple accounts and you have much of this money reserved for a whole slew of different things at any given time like your Rent / Mortgage payment or Cell Phone bill.  Navigating the madness is where Mint’s Goals come into play.  In this chapter we’re going to discuss how to create goals in Mint, best practices and how to actually set realistic goals that you can achieve.

CREATING A GOALI think we should start off by mentioning that not all goals are created equal.  Some are big long term goals, some are short term, some are easy to calculate and some are very complicated.  Take for example, buying that Macbook Air goal vs paying down your debt.  The first goal involves saving up to a fixed amount where as the second goal is a moving target.  The longer you take to pay off your debt, the more it will cost you.

The good news is Mint understands this and has baked considerations like this into their Goal tool.  Since my two biggest concerns for you are to be sure you’ve shed your debt and that you can retire at a reasonable age, we’ll be going over these two types of goals.  That said, everything you learn in relation to these two goals can be applied to other goals like saving for college or getting that Macbook Air you always wanted ;)

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First, paying off your credit card debt.  If you click on Goals at the top of Mint you’ll notice a bunch of pre made goals to choose from (Figure 9.1).  Click Pay off Credit Card Debt.

You’ll notice a little popup box will appear where Mint automatically selects all of your credit card debt and totals it up for you.  Since we want to pay off ALL of our credit card debt, we will leave the first screen alone and go ahead and click Next on the bottom right.

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On the second screen you’ll see a box for each of your credit cards and a space for you to put the APR and minimum payment for each credit card.  For roughly half of my credit cards, Mint was able to fill this information in automatically.  You may be in a similar position so take the time to log into each of your credit cards and check the APR/minimum payment rules.  Overall depending how many credit cards you have, I don’t think this should take you more than 15 minutes total.  It’s critical you enter in this information so you can get a accurate picture of your debt reduction plan.  Once you’re done typing in the information for each card, go ahead and click Next again.

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Now you’ll notice that Mint gives you what your absolute minimum payment will be as a sort of info bubble on a sliding scale.  While your minimum is a fixed value, there is another info bubble that has your Goal Payment along with some basic information like how much interest you’ll wind up paying and how long it will take you to reduce your credit card debt to zero (Figure 9.2).  Don’t worry about setting the perfect number now, we will go over stuff like that in the other sections of this chapter.  For now just select something and take note of the tips at the bottom of the popup bubble.  These are just suggestions based on your debt situation to help you reduce the impact of any additional spending you may do between now and when your credit card debt is paid off.  Go ahead and click Save Goal.  Boom, you just created your first goal!

Awesome, now lets look at creating a retirement goal.  Go back to the main Goals screen and click on the Save for Retirement goal.  The first thing you should notice is that the initial screen of this goal is completely different than the last one we looked at.  All of Mint’s canned goals will go the extra mile to help make your calculations accurate.  Mint is cool like that.  Enter in your age as well as a reasonable retirement age although that is not so important because Mint will help you adjust that based on what your real financial situation is.  

Now, a critical step here is setting your annual income desired during retirement.  You need to understand that this will be lightly taxed so it will need to be about 25% higher than your actual spending for safety’s sake.  It’s also important to take into account that your spending is likely to be lower in retirement than now.  For example, if you own a home and plan to retire after your home is paid off that will significantly reduce your yearly expenses as well as what you will need in retirement.  Since we know you’re going to live

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to at least 90 and inflation is usually a steady 3%, we will keep Mint’s assumptions hidden.

If you read Listen Money Matters and follow our advice there you should be able to comfortably set your Investment style slider at Growth (7%), however if you’re pessimistic then you can set it at Balanced (5%).  Setting the slider any lower than that tells me you don’t have any investments which is crazy.  If you’re looking for an easy solution here, check out our Betterment Experiment.  Once you’re set, go ahead and click Next.If you have any retirement / investment accounts go ahead and select them on this screen.  If you don’t I’d suggest you select I’ll use an existing account and select your checking account.  You can always open an account later.  Click Next.

On the final stage you’ll have all your details summarized and Mint will tell you what you’ll need to save each month to get you to where you want to be.  Unfortunately the real number here may not be exactly what you were hoping for but don’t worry because if you’re putting this book into action I’m very optimistic that you can still make up for any lost time.  If the monthly contribution is way too high to be realistic then go ahead and set it lower to something you can handle on a consistent basis.  You’ll notice that Mint will then provide you with some options (Figure 9.3) - either increase your monthly contributions or push back the date of your retirement.  When you’re done, go ahead and click Save Goal.

You now have two core goals down, lets now get into the details.

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BEST PRACTICESHow do you know if you’ve set “too much goal” or if you’re not trying hard enough?  Of course everyone’s situation is different but lets look at a few guidelines before we get into more of the philosophical side in the final section of this chapter.

You should save at least 20% of your take home pay.  That means if you make $3,000 a month you should be saving at least $600 a month.  If that seems unreasonable, you’re likely living well above your means.

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All of your monthly savings shouldn’t go towards goals.  If you were perfect I’d say go for it but I already know you’re not.  You will also have moments of weakness and things that come up unexpectedly.  Plus, you want to be able to order the wine at dinner, right?  Give yourself some buffer so you don’t have to be militant over your spending.

Never have more than two goals at once.  There is some zen to be found in not stretching yourself too thin.  Sure you can do sprints burning the proverbial candle on both ends but it’s not sustainable.  Also, you’re terribly unproductive when you’re burnt out so we need to avoid that - slow and steady wins the race.  If you have three goals, then you’ll need to sacrifice one of them.

You should always have a retirement goal and a debt goal if you have debt.  Wait, what?!?  That means if I’m in debt my goals are already maxed and I can’t do something like save for a vacation?  Yes, I’m sorry but you’ve been living well above your means and you need to bring things under control.  Postponing the pain will only make it worse.  Not taking care of the urgent like debt is only screwing the future you out of the happiness and financial freedom you deserve.

Any goals that require buying something large need to go on a 30 day waiting list.  Sure, you want a Macbook Air but do you really need one or are you just being impulsive?  Sit on it for at least 30 days before you create a goal and go for it.  Often the impulse will pass and your finances will be better for it.

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SETTING OBTAINABLE GOALSSetting goals is easy, especially with Mint.  Given 30 minutes you could probably have 10 goals created if you really wanted to.  That’s great but what’s the use of a goal if you’re not actually going to stick to it?

I’m not here to lecture you on your life priorities and desires because it’s different for all of us and I’m not your father (but Darth Vader may be).  What I am here for is to set you on a solid path where you can actually achieve what you need.  In order to do that you need to be honest with yourself and have discipline.  

Maybe Mint says you can’t retire until you’re 70.  That sucks and I’m really sorry.  You know what sucks even more?  Living till 70 knowing you’ll never get to stop, that you’ll be reporting into a boss for the rest of your life.  It’s never too late, you just need to start somewhere.

So, how do you set actual obtainable goals?  Follow our best practices, live within your means (budgeting will help) and tell the people who are important to you what you’re trying to achieve.  The important people in your life will help keep you on track and you’ll need that in your weak moments.

Good luck and remember, just take the first step… and then the second step and before long you know it you'll actually be making progress!

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CHAPTER 10TRACKING THE SUCCESS OF YOUR INVESTMENTS

The most important part of any successful financial strategy is investment. If you were to put $20k into a savings account and add $5k to it for 38 years you would have slightly more than $210k at current almost 0% interest rate that savings accounts offer.  However, if you were to put that same money into generic market average accounts earning an average of 6% a year, in 38 years you would have $1 million.  Quite a dramatic difference!

Hopefully you don’t need too much convincing to start investing or you’re doing it already.  If you are, awesome because we’re going to show you how Mint can consolidate all of your investments from various brokerages, 401k’s, IRA’s and make them all easily trackable.  If you do need some convincing, head on over to http://www.listenmoneymatters.com/invest/ and you’ll find a ton of epic stuff breaking it all down for you.

CHECKING YOUR OVERALL PERFORMANCEThe Investments interface is pretty straight forward and can be found by clicking Investments in the top menu of Mint.

If you’ve added in your brokerage and retirement accounts you’ll notice that Mint already added in all of your investments and their historical prices allowing them to plot your performance over time.  They’ve also added in all of the transactions from your accounts so you can see how the value of your investments grow over time as well as their relative growth.  

Lets go over the different types of graphs Mint creates around your data and what they mean.

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The Comparison Graph - Here you’ll be able to compare the performance of investments against popular market benchmarks like the Dow Jones Industrial Average, the S&P500 and the NASDAQ.  Here your investment performance will be displayed both in an absolute sense and how much you beat or lost against a specific benchmark (Figure 10.1).

The Allocation Graph - Diversification gets quite a lot of lip service and for good reason because lacking diversity can increase your overall risk.  The point of this graph is to help you see how diversified (or not diversified) you are.  You’ll be shown a pie chart where you can break down your holdings by asset class or symbol (Figure 10.2).

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The Value Graph - In the most raw sense, investing is about increasing the value of your savings and this graph shows you just that. It will show your investment’s value over time so you can find out how much money you’re actually making (Figure 10.3).

The Performance Graph - As my personal favorite, I’ve saved this one for last. The performance graph shows you two things, your contributions over time and your relative performance.  If you regularly contribute to a 401k or your Betterment account then your graph will look like stairs relentlessly

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marching upwards.  If your graph doesn’t look like that then you should really get on that because regular investment contributions is the real way to build wealth! That said, the performance graph really shines in how it describes your investment growth. As you know, you can only have investment gains on money that’s invested and if you’re continually investing then it becomes difficult to truly describe the gains on your money over various periods of time.  This graph rocks because it shows you exactly that, your gains on the exact principle you had invested at a specific period in time (Figure 10.4).

In order to better focus all of these graphs you can switch from the All Investments selection on the left side and select specific retirement or brokerage accounts.  You can even go so far as to track individual investments from within these accounts.

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FINDING YOUR POORLY PERFORMING INVESTMENTSMint makes this shamefully easy, especially if you have multiple investments across multiple accounts (brokerage, 401k, etc..).  Normally you would have to pull out all of your data from each site and pop it into a spreadsheet to compare but Mint removes that needless work with its awesome data consolidation.

In the hunt to find poorly performing investments there is a high level easy approach and a more involved but more detailed approach.  Generally I don’t investigate my investments performance too frequently as I’ll go nuts so I’d say maybe you check the easy method once every 6 months and the more detailed method once every year.

The Easy Way - As soon as you arrive on the Investments page, if you scroll down you’ll notice a nice little list of your investments and their performance (Figure 10.5).  You can sort this by Best/Worst Performers, Highest Value and Biggest Movers. The idea behind this report is that it gives you a nice birds eye view of how you’re doing.  It’s difficult to directly compare investments because you’ve almost certainly made them at different times. For example, if something has a gain of 20% but you’ve had it for 3 years it’s not really fair to compare it to something you bought last week.  That said it’s a great way to find your best investments to potentially double down and your worst ones which you may want to sell.

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The Harder Way - The harder way isn’t so much hard as time consuming.  Basically, it involves expanding all of your account groupings on the left menu and methodically going through them and examining the graphs.  Generally speaking you can leave the graph set to the Comparison Graph to give you an idea on how each investment stacks up against the average where the goal is to have more things out perform the average then under perform.  You can also pull up the Performance Graph to see how you’re doing with your specific investment but remember - how you’re doing depends very much on timing.  Since we don’t believe in trying to properly time the market, I would be wary to use that graph as an absolute way of determining if your investment is worthy of keeping.

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CHAPTER 11MINT ON THE GO

Mint’s website provides an extremely powerful interface to get all of your core financial tasks done. However, using your desktop or laptop is not always convenient for you to do during your Weekly Practice.  As I said in Chapter 5, I do most of my transaction categorizing on my commute and waiting in line for things.  Here’s a good place to make your smart phone work for you.

In addition to having an awesome website, Mint has a killer app for all major mobile platforms (including the Windows Phone).  Not only is it extremely powerful but it also has the same level of security that you’re accustomed to with their website.  Best of all, you can get it for the wonderful price of free.  Lets go over some best practices and explore the app a bit.

SECURITY AND GETTING STARTEDIf a friend or even someone you didn’t know opened your Mint app it’s not the end of the world.  They don’t have access to any of your money and they can do nothing more than help you budget and categorize your transactions.  That said, you don’t necessarily want people poking around your financial situation - that stuff is private.

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The best way to protect your privacy from both purposeful and accidental snooping is to put a pass code lock on the Mint app.  From within the apps preferences (Figure 11.1) it lets you set a pin that’s required to access your account.  This makes it easy for you to access your information and very difficult for others, just how it should be.  I definitely recommend that you enable this.

When you’re in the app you’ll notice an Overview screen as the first thing that pops up.  The idea of the Overview screen is identical to the one you see when you log into Mint from a browser but more compact.

One important section on this Overview is the Alerts section (Figure 11.2).  This is your alert queue for everything happening across all of your accounts as we setup from Chapter 3.  Since the ultimate goal is to automate your finances and stop worrying, the Alert section may be the most used section across all of the Mint mobile app.  This screen is going to tell you want’s happening and if there is anything to be concerned about.  When configured correctly, take these alerts seriously and you can largely ignore your accounts until you get another alert.

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CHECKING BALANCES AND TRANSACTIONSIn Chapter 5 we went over how to categorize your transactions as well as the strategy behind doing this so that you get the most out of your efforts.  We also mention The Weekly Practice where you spend about 10-15 minutes per week (that’s it!) categorizing your transactions and keeping your accounts in order.  Doing just that minimal amount of work is honestly the difference between most people with terrible finances and those who have everything under control.

The great news is that you can do The Weekly Practice in the Mint mobile app.  This is actually where I almost always do it.  Maybe every single second of your time at home or in front of a computer is sacred - a little dramatic but I can understand.  We’re working all the time these days so some down time is sorely needed.  However, if you’re in line waiting for a burrito (like I often am) or lightening the load (you use your phone, don’t lie!) that could be the perfect time for The Weekly Practice.  Just rock it out with your mean multitasking skills and get on with your life.  Luckily, doing this in the smart phone app is very easy!

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From the Overview screen just tap on the section at the very top called Accounts (Figure 11.3).  You’ll notice that this section has the balances for all of your accounts in one place.  This is great if you’ve gotta figure out if you can cover a bill on the go or if you’re splurging and need to see if you can afford it.  From here if you tap All Accounts it will bring you to your transaction list.

This is your master list of transactions much like what we looked at in Chapter 5 and we’re basically going to do the same thing here.  Tap on an improperly categorized transaction and you will see the transaction details along with a category section.  If you tap on the category section you’ll notice all the categories you have (even your custom ones).  Just select the right one and you’re done.  Doing this for the past week is easy and if your Chipotle line is anything like the one in downtown Manhattan you likely have more than enough time to do a whole month’s transactions in one afternoon’s line.

The only catch is that you can’t set and update your automatic categorization rules in the app.  It really sucks and I’ve even emailed Mint to complain about it but for now we must wait patiently.  I’m all about doing things once max once so if I notice something that needs a rule set I save it for the computer when I get back to my desk at work (or home) - but I’m a bit crazy.  A good compromise might be to log into Mint at least once a month and set rules where necessary then.  I’m all about having rules for

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everything such that it reduces your Weekly Practice to 5 minutes max (what I’m at now).

CHECKING AND SETTING BUDGETSAs we discussed in Chapter 7, you will need to briefly check in on your budgets throughout the month.  Most of the time it’s to see if you can afford that extra dinner out at a restaurant or respond to an alert from Mint on over spending.  Almost every time that you’ll need to check in on a budget you’re not going to be in front of your computer and with the Mint smart app, you don’t have to.

From the Overview screen, just tap Budgets and you’ll get a nice alphabetized list of all the monthly budgets you created (Figure 11.4).  Of course if you were slacking and didn’t yet create your budgets or haven’t adjusted them for the month, you can do all of that on this screen.

If you wanted to create a budget you just click the plus sign on the top right of the screen.  A nice list will appear of all possible budget categories along with how much you’ve spent in that category this month.  If you tap on a category an even cooler budget setting screen will appear (Figure 11.5).  Drag the budget tag to the value you want or tap the tab and write the number in.  When you’re done click Save.  If you want to edit an existing budget just click on the little pencil icon to the right of every budget.  You’ll notice it’s the same screen from when you were creating a budget, just tweak the amount to your liking and click Save.

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Now, one of the more likely reasons you’re on the budget screen is because you got an Alert saying you shamelessly blew through your budget in a specific category like Electronics & Software.  From the budget screen if you tap in the middle of the budget you’ll be brought to a short list of all transactions categorized under that budget this month.  The idea is for you to look for why you blew through your budget.  Maybe you bought headphones for a friend and it should be categorized as Gift or maybe you accidentally got charged twice for your burrito.  Whatever the reason is you can quickly figure it out here and then take the appropriate action.

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CHAPTER 12MINT FOR THE

ENTREPRENEUR

Mint is an incredible tool for a Salaried or Hourly employee, however it is absolutely essential for the self employed.  While the potential income upside for someone who is self employed is much higher than a salaried employee, it can also be much more difficult to project your income if you’re self employed - even a month ahead of time.  This makes Mint all that much more essential as a financial planning tool.

Since we’ve already discussed the core features of Mint up until this point, in this chapter we will mostly discuss core financial concepts for Entrepreneurs and how Mint fits into it.  For any deep dives on a particular Mint feature we will just reference the chapter where it’s discussed.

TAKING THE LEAPEntrepreneurship is often idolized due to the awesome amounts of flexibility it allows and huge income potential but people rarely consider how difficult it can be - especially on your finances.

When you’re just starting out it’s likely that you won’t be making any money for some time.  It’s very possible that you could be living without any source of significant income for well over a year not to mention that your business may not work out altogether.  In fact, statistically there is a greater than 50% chance that your business will not succeed.

So, how can you prepare yourself for the leap?  First, don’t take a leap!  Just because you can’t wait to quit your job and become your own boss doesn’t mean you’re ready to go without income, especially if your mouth isn’t the only one you have to feed.  Ideally you shouldn’t be taking the leap until you’re making enough money to cover your absolute minimum expenses.  How do you calculate your absolute minimum expenses?  

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Create a budget using Chapter 7 as a guide and relentlessly cut your expenses.  If you’re not going to be making any money, you surely can’t afford luxuries like eating out!  Once you cut your budgets down to the lowest possible numbers you can, sum up your expenses for the first month you successfully stay within that budget.  As soon as you make income in your business equal or greater to that number, then you can take the leap.

You might be thinking, “I already have a job, I don’t have time to work two!”  To which I would respond, “Then maybe now is not your time or this idea you’re working on is not the one.”  Why?  Because it is almost always more work in the beginning to start a business than just do a 9-5 job so if you can’t hustle now, who’s to say that you will in the future when you’re the boss.  Plus, your small business should be based around something you enjoy doing as that will be the only way you’ll endure the hard times and trust me, there will be plenty of those.  So, if you don’t enjoy it enough to do it in your spare time, I would pass on the idea.

Well, what if you don’t have the luxury of working two jobs until your business is profitable.  Maybe you got laid off or know of a date not far into the future when your position will disappear.  In that case you need to consider the length of your runway.  Your runway is the amount of time you have for the business to be a success before you must walk away.  The absolute maximum size of your runway is when the total money you have reaches zero (and hopefully no lower).  To calculate this number you can refer to Chapter 8, Using Trends to Make Decisions.  Simply put, you’re going to take the total cash you have on hand and divide it by your average monthly expenses.  That number you get is the number of months you can survive without income.  The longer your runway is the better chance you have of being successful.

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THE THREE MONTH RULESo, you have a successful business where you’re earning at least enough to survive, great!  The next step is reaching financial stability.  You want to spend as much time as possible building your business and as little time as possible managing and worrying about money.

Usually for a salaried employee I recommend you keep 1-2 months worth of expenses in a checking or savings account to allow for true financial automation and minimal stress.  However, because as an entrepreneur your situation is never certain, it is recommended that you roughly double that safety net to keeping a minimum of 3 months with of expenses on hand.  This will allow you to successfully automate your bills so that you can keep your primary focus on building your business instead of balancing your accounts.

In Chapter 9 when we talk about Setting Obtainable Goals, one thing we mention is a 30 day waiting list for all big purchases.  That means a minimum of 30 days before you officially decide to either begin saving for a large expense or purchase it if you already have enough money saved.  If you’re an Entrepreneur, you will need to extend that as well to three months.  Until you are wildly successful and make much more money a month than you can spend, you need to be conscious about the difficulty in projecting your income month to month.  Possibly one of the worst things that could happen is some serious financial difficulties for you or your business because of something trivial like upgrading an old TV or computer.

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AN ENTREPRENEUR’S BUDGETA salaried employee has the luxury of a fixed monthly budget.  They know how much they will earn each month so they can expect to base their expenses every month by that number with their only long term goal being to reduce expenses.  An Entrepreneur on the other hand is not always able to forecast what their income will look like for the month and so as an Entrepreneur more than anything else you need to be mindful about your spending.The core of any budget is income.  Without an income number you won’t know what the upper limited of your spending is and since this number fluctuates for Entrepreneurs we need to come up with a way to set a baseline number.  The standard guideline is to base your income off of last year.  If you’re budgeting for November, use your income numbers for last November and if your business has not been around for a year, use the lowest income number you’ve had for the past 6 months.  Why so pessimistic?  

The importance of year over year budgeting is that it controls your income for seasonality.  Say for example you’re like Matt and have a largely summer based business (SwimUniversity.com).  It wouldn’t make sense to base your budget in November off of earnings in July because your earnings are likely to be much larger in July than November.  Further on that point, consumer spending is also largely seasonal.  You wouldn’t expect the same level of sales in September a middle month with no holidays as compared to December one of the biggest shopping months of the year.  

They key take away is that you need to always approach spending conservatively.  When you consistently plan in a conservative manner you are

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almost guaranteed to end the month with a surplus that you can invest back into your business or add it to your stash.  Speaking of your stash...

THE STASHThe best part about being an Entrepreneur is your ability to focus on your stash.  Your stash is your net worth less the money you have reserved for the next three months of spending.  Your Entrepreneurial stash is very different from a retirement account.

When planning for retirement you need to save up enough money which will, for the most part, last you for the rest of your life.  There are calculations involved and planning many many years in advance.  For someone who wants to spend $25,000 a year then need to save up ideally $625,000 according to the 4% rule.  However, you’re an Entrepreneur, you don’t need to plan for retirement because you’re already halfway there!

As an Entrepreneur you are your own boss so if you don’t want to show up for work on Monday or next week or for the whole year, that’s your own business.  Ideally you don’t want to step away from your business unless it’s making money which means you need to focus on two things.  Building your stash and automation.

What is the need for retirement when showing up for work is optional?  Imagine for a minute you owned a bagel store.  Initially you need to get to work very early making bagels so you can feed your first customers.  Then, if they want things like bacon and egg on their bagels you’ll need to cook on the fly.  You’ll also have to take their money and get them change.  Finally, you’ll have to clean the store before you leave.  

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Now imagine you’ve build up a sizable stash doing all this work yourself.  With this stash you can hire someone to get there early and make the bagels so you can sleep in.  Maybe you’ll hire someone to run the cash register or mop the floors.  Eventually you could get to the point where every position in the bagel store is filled and you just manage your employees or you even hire a manager and just sit home and collect a check.

The degree to which your effort is required is up to you and the power to make those decisions is dependent on the size of your stash.  In other words, the extend of your retirement relies on your ability to save and reinvest in “automation” through employment or otherwise.  Growing that stash and tracking it is what Mint does best.  Between budgeting, goal setting and analyzing trends, Mint can your greatest asset on your path towards a “lifestyle business”.

LETS REVIEW1. Cut out everything but the most urgent expenses, it takes money to make

money and in the beginning every dollar not spent on necessities needs to go into your stash or back into the business.

2. Your stash should never be less than the cost of 3 months of your necessities.  More could be better but if you’re a hustler (which you almost certainly are), you can find cash if things get rough.  If you have kids then make it 6 months so you don’t get an ulcer.

3. Be intimately aware of your income vs your expenses.  If you’re spending $1 more than you make then you need to have one less coffee.  Until you have consistent reliable income you need to be militant.  Who ever said being your own boss and the master of your own destiny was easy?

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4. At any given time you should have at least one business related saving goal and that goal should be focused on automating or improving the profitability of your business in some way.  Hiring help so you can take in more customers, purchasing a tool that will save you an hour a day, etc…

5. Never trust anyone completely with your business finances. Period end. Seriously. I know MANY people who have gotten seriously screwed due to the greed of other people.  After all the blood sweat and tears to build the business up from nothing an oversight like this could be soul crushing, don’t let that happen to yourself.  That means you may have a partner or accountant that handles much of the monetary side of the business but you need to at least review the numbers yourself every two months.  Is the rent being paid?  Is some money unaccounted for?  These things need to be caught early.

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CHAPTER 13MINT FOR THE EARLY

RETIREE

You’re obviously reading Mastering Mint because you want to improve your finances.  One thing that you probably haven’t considered much is retirement - namely early retirement.  See, even if your finances are in shambles now, it actually doesn’t take much to turn things around and truly reach retirement. What I’ve been obsessed with is not retiring when I’m 65 but retiring when I’m 35. As it turns out, this is not that difficult of a feat to achieve and there are many people who have not only done just that but beat me by doing it younger.  Most importantly, barely any needed a bloat load of cash to make it happen.

THE SURPRISINGLY EASY MATH BEHIND EARLY RETIREMENTSaving for retirement can feel like a daunting task that is simply unachievable.  Maybe that’s because your finances are in such terrible shape that you can’t even fathom achieving a Net Worth of $0.  More likely it feels impossible to save for retirement because you have no idea how to do it or how much you need to save.  In fact, not knowing this information and the resulting demotivation may be a core reason you’re in debt.  As it turns out, it’s really not that difficult to save for retirement and it doesn’t take that long.

There is really only one thing you need to be concerned with: Your savings rate.

Consider this, if you saved 0% of your take home pay you will never be able to retire because you’ll never accumulate enough money to live off of.  Conversely, if you saved 100% of your take home pay you could retire today.  Since the time until you can retire is simply a function of how much you save we can use that information to calculate when you are able to retire.

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In order to make sure our savings last forever, all we need to understand is the 4% rule.  We explain the 4% rule in the 12th episode of the Listen Money Matters Podcast but I’ll give you a very basic run through here.  You can also find this information on many websites as it’s well documented by a group of PhD researchers.

Simply put, if you have investments that comprise of no more than 75% equities, you can live forever on that money with 100% statistical certainty as long as you withdraw a maximum of 4% each year.  That’s quite a sentence to digest there so allow me to provide a simple example:

Total Investments: $100,000Maximum yearly withdrawal: $4,000 (4%)

In the above example through boom and bust cycles there is a 100% chance that your money will last you forever.  In fact, it is highly likely that you will slowly accumulate more money more than replenishing what you withdraw every year.

Now, how does this translate into when you can retire? We can use this knowledge to estimate how long you will have to work for under various savings rates to accumulate enough wealth to support your lifestyle. Of course, when I say savings rate it should be understood that all of that money should be going into investments.

Regardless of your salary, here is a simple chart that details how long you have to work at a specific savings rate in order to be able to retire provided your monthly costs remain roughly fixed in retirement.  The assumptions here are a withdrawal rate of 4% and an average yearly investment gain of

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6%.  There is generous fluff built into these numbers so you’re likely to get less required working years if you calculated this on your own.  It’s also important to note that these numbers are based on a current savings of $0.  If you do have some savings then you’re likely further along than this chart conveys.

Digest this chart because it almost perfectly transitions us to the next section.

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PUSHING THE LIMITS OF SAVINGNow that we know how dramatically your savings rate can affect when you can retire it’s time to reflect on what all of that means.

Lets assume you make $55,000 a year and have a savings rate of 30%.  That means you can retire in 28 years.  If you want to retire in 25 years you could either: 

• Spend $2,750 less a year

• Make $4,230 more a year

Both will get you the same desired effect of bringing your savings rate up to 35%, however which do you think would be easier?  I’m going to say that not only is it easier to spend less money than make more money but the amount that you’ll have to save is way lower than the amount you would need to increase your income by.  Therefore, I think we can agree that the quickest most efficient path to early retirement is cutting your spending.

I’m not suggesting you become a hermit and never spend a dime of your money, because nobody wants to live a life like that (you won’t ever catch me being that frugal).  All I’m saying is that through the use of Mint and what we teach you in Chapter 6 and Chapter 7, you can drive a lot of efficiencies in your monthly expenses that will shave years off of your working career.

Knowing how easy it is to retire early, what are you waiting for?

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In terms of strategies and approaches towards early retirement, there are a ton.  So much more than I could ever mention here besides the fact that this book is more about utilizing Mint effectively than how to retire early.  That said, I’m not about to leave you hanging.  As it turns out, we have a ton of articles and guides on this very topic over at Listen Money Matters.   We’re also hard at work trying to bring you something new and of epic quality every week day.  If you want to learn more and join the cause you should head on over to our site.  Between our writing, videos and podcast I think you’ll find that we’ve got you covered.

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CHAPTER 14MINT FOR THE WORLD

TRAVELER

I love traveling, it is one of the most important and enjoyable things in my life.  I’m all about experiencing other cultures, having crazy adventures and the occasional pampering in between my crazy work sessions.  The thing is, travel can be very expensive and there are a lot of issues that can crop up while you’re jet setting.  

I’m not going to get into how to save money while traveling so much as specific money concerns and how Mint can help you be at ease and enjoy your time away from home.  These are all lessons I’ve learned through my years of travel.

DON’T LET THE BILLS GET YOU DOWNI’d say that 95% of my bills are automated.  While I do spend a lot of time working on building wealth, I want to spend as little as possible on mundane things like logging in to send a payment (as well as remembering to do so).  That said, not everything can be automated and I also don’t automate my main credit card payments.  Reason is sometimes that bill is very big and depending on the month I may have to juggle some money around to may the full payment.  As a result, roughly half my vacations have a bill due at some time while I’m away from home and I’ve had quite a few in the beginning where I forgot to make a payment!  How do I deal?

First and most importantly you need to have Mint bill reminders setup.  It’s an absolute must because you’re all that much more likely to forget to pay your bills when you’re trekking through a rain forrest as opposed to watching Breaking Bad in between bites of chocolate chip cookie dough.  That said, if you do happen to forget, it isn’t the end of the world as long as you don’t

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accept it.  See, a major part of your credit history is the frequency of your on time payments and there is a HUGE difference between 100% on time payments and 99.99% on time payments (seriously, never ever miss a payment).  

If you do forget, the day you get home call your credit card company and give them a “whoops” sob story.  Beyond admitting that you forgot, it’s important that you ask them to remove any record of late payment as well as any late fees.  They will almost always help you out, especially since so few people ask it really isn’t a big deal.

Now, it’s one thing if you just pay your bills and all your money is in your checking account but it is more likely that your money is spread across various accounts based on convenience as well as where you can get the best return.  If that’s the case, Mint is a blessing - especially their mobile apps.  Check Chapter 11 for more details on using the app and making your life easier.

WATCH THE FEESThe devil is in the details, especially when it comes to bank fees.  Banks really work very hard to make sure that they can take your hard earned money at every turn and they are getting craftier and craftier at hiding these fees.  One huge hidden fee is the Foreign Transaction Fee and it applies to both checking accounts and credit cards.  

Maybe you’re at an ATM in Mexico or London, the only thing your experiences may have in common is a 1-3% transaction fee and this is on top of things like ATM fees the machines most certainly have.  If you’re in a

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restaurant your entire dinner could be 3% more expensive due to these sneaky fees.

While Mint will track these expenses and you can even configure it to alert you (Chapter 3) when you get hit with these fees, the best approach is to avoid them from the get go. The best way to avoid them is to sign up for specific “world traveler” type credit cards that don’t charge you any foreign transaction fees.

There are a bunch of credit cards that provide no foreign transaction fees but many of the come with their own annual fees (very sneaky indeed).  Unfortunately my two cards of choice for this purpose come with fees, AMEX and United’s card (I fly United a lot).  If you’re looking to dodge fees, the Chase Sapphire card and Capital One Quicksilver cards are pretty solid.  You can’t get cash back with either of them which sucks but the amount I save on fees per vacation is higher than what I’d get in cash back!

DON’T FEED THE FRAUDSTERSWhile this usually isn’t such a big problem in the US, overseas there plenty of fraudsters waiting for a free ride at your expense.  I’m not a pessimistic guy by any means and I’m not flashing my credit cards to sketchy people but it seems fraud is definitely on the rise.  In the past years nearly 1/3rd of my trips have resulted in a call from my credit card company and having to switch card numbers.  At worst, if you’re not careful this can cost you a lot of money and at best it can be a major hassle to change the mountain of reoccurring charges (like Netflix) over to a new card number.

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These days your credit card fraud protection is likely amazing and will prevent most if not all fraudulent charges.  That still doesn’t mean it isn’t possible for charges to slip by their automated checks.  While you’re on vacation enjoy yourself but when you get back, be sure to go through your transactions with a fine tooth comb.  I’m writing this after I came back from a trip to Panama only to notice I had a $170 charge at a rest stop in a small town in Romania (other side of the world).  I usually watch the people holding my credit card like a hawk but it seems they got the number and sold it to someone who quickly tried to get some free cash off my back.  It’s easy to not notice a charge like that among a bunch of crazy vacation charges but there is no reason to make your trip more expensive than it needs to be.  When you get home quickly check the transactions that happened between when you started your trip and arrived home, it should take no more than 5 minutes and could save you a bunch of cash!

Hopefully you or your credit card company catches the fraudulent charges.  You’ve saved yourself some wasted cash but now you have a bit of work ahead of you.  When fraud is caught on your account, the first thing the credit card companies do is change your card number.  That means that Netflix, AT&T and all other reoccurring payments need to be migrated to your new account number.  This could be done after all the companies complain to you but I prefer to get it all done in one sitting as opposed to being constantly interrupted by companies over the course of a month.  The easiest way to deal with this is to check your bills through Mint.  We discuss the Upcoming Bills section in Chapter 4 as a high level view of all your monthly bills.  Use this to see what bills you’ll have to change if you’re a victim of fraud.

Possibly the easiest way to avoid the hassle of relinking all your bills with a new credit card number is to isolate your travel expenses from your day to

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day expenses with a separate credit card.  To avoid beating a dead horse I’d recommend using one the cards mentioned in section above strictly for travel expenses.  While you still have to double check your expenses, at least you can avoid having to reconfigure all your monthly payments if things go sour.

Just remember, fraud happens.  It’s ok and not the end of the world.  Someone across the world can’t become you with your credit card and one quick call to your credit card company can have the card completely disabled.  Travel with confidence that your credit card company has your back.

TAKE THE HOT AIR BALOON RIDEOk, you’ve saved up and you’re going on a trip.  The last thing you want to do is to cheap out after paying to fly yourself out there and stay in a bunch of hotels.  I’m not saying blow all your cash but you definitely shouldn’t skip the experiences that will make your trip truly memorable.

Say there was a hot air balloon ride over the most incredible landscape you’ve ever seen but it costs $150 per head and you want to go with your wife.  A combined cost of $300 is quite a lot of money and you could easily decide that it's not worth your money.  However, if you both are adventure seekers and really think you'd have a good time doing something you've never done before you should give it a try!

Instead of focusing on the one time cost of $300 while you're far away from home, think about what you can sacrifice to make up for the expense.  I

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would sooner opt to skip a few dinners out when we get home then miss out on an amazing experience.  

Taking that a step further, my wife and I always go into frugal hermit mode when we get back from vacation.  Even though we save up for a trip ahead of time, it's still very expensive and there are often surprise costs along the way (you know, hot air balloons and whatnot).  A good vacation relaxes you and gets you revved up to go back into your life.  

Channel that energy and cook at home for a bit, try not to go out and just relax.  If you can pull off laying low for a month you’ll more than pay off any excitement you had on vacation and set yourself up with a strong financial foundation as you head towards your next vacation!

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CHAPTER 15CONCLUSION

You know you have to budget, you don’t have to be told.  The good news is it’s never been easier.  Forget guesstimating yourself into debt and forget archaic budgeting methods like the folder system.  In the past you had to get out a calculator and a pound of receipts every month - now we’re in the future and it’s all about automation.  Mint will take care of the details so you can go on with your life.  Take the time to set Mint up, your bank accounts will thank you.

In the five years I’ve been using Mint it has revolutionized my finances.  I was able to use the insights it provided me to stop spending all my money and start putting it away.  Just knowing and understanding my situation empowered me to make better decisions to lead a happier life.

Maybe the reason you don’t like dealing with money is because your financial situation is less than perfect.  Maybe if you took 1-2 hours a month (less than 1% of your time a month) and kept up with your budget you would be in a much better situation.  Maybe if your net worth is growing at a steady clip you might enjoy managing your money.  Who doesn’t want to watch their stash grow?

Anyway, I hope you enjoyed the book and I hope you’re taking action on some of the chapters!  If you want to learn more about controlling your money and putting it to work for you all with a focus on automation then you’ll love our blog Listen Money Matters and podcast of the same name.  If you have any questions about the book please don’t hesitate to contact me at andyfieb@gmail.com.

Good luck Minting!

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ABOUT THE AUTHORAndrew FiebertHey, I’m Andrew, a personal finance nerd. I love talking about money and helping people reach their financial goals. By day I'm a Data Engineer so that may explain a few things ;)

I live in Hoboken, New Jersey, and love traveling. For exclusive access to complaints I send companies and articles I find interesting, follow me on Twitter (@andyfieb).

ABOUT LISTEN MONEY MATTERSWe live in a world where most kids graduate from high school with no formal education in how to manage their money. Being that most of us are destined to earn money, you would think that lacking basic money knowledge is more than just a minor oversight.

Lucky for you we’ve got a personal finance nerd and reformed debt addict on board to help show you the ropes. Andrew hails from the land of money geekdom and Matt is the everyman who is actively working to build up the size of his stash.

We’ve come together to try and create an ultimate personal finance resource so that you don’t need to work hard to keep your cash under control.

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Why are our books and site different?

We’re not going to tell you how to get rich quick because we think it’s impossible. If you’re looking for that sort of stuff then you’re on the wrong site.

Success is won through sheer determination and it’s something that you need to work at every day. Fortunately we believe in working smart, not hard. Most of our time is spent researching and learning, the actual execution of our strategies is rather simple. Together we will cut through the bullshit. We won’t feed you anything we don’t believe in. We also value your time so we’re trying to create some epic stuff for you.

That’s where this site comes in. We’re doing all this research, making a few good decisions and bad decisions… but hopefully more good decisions, and we want to share the journey with you. We think some of what we’ve learned and are learning will be hugely helpful for those who we have a head start on and for those of you working towards the same goal – retiring earlier than it is conventionally believed.  We think we can help each other out!

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CHAPTER 16DISCLOSURE

DISCLOSUREWhile I love Mint and it's literally changed my life, my relationship with Mint ends as a customer. I'm in no way affiliated with Mint, nor do I make any money through the promotion of their service. I'm just a big fan.

It's also important to note that while Mint is an incredible tool, it is in no way a "magic bullet". Signing up for Mint won't in itself cure you of all of your financial woes - you will actually need to take action yourself. Mint just takes all of your financial data, provides insights and helps you take action based on those insights. Simply put, you are still responsible for your own financial health.

That said, please don’t hesitate to email me at listenmoneymatters@gmail.com if you have any additional questions or concerns about Mint. I read every email! Just be sure to put “Mastering Mint” in the email title.

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