For years I used (and still use) Mint. The colorful charts pulled me in and the in-depth analysis of where my money was going could keep me adding categories and making budgets for hours. Mint was way more userfriendly than YNAB (You Need A Budget) and it’s also free, unlike YNAB. I credit Mint with getting me interested in where my money was going and I enjoyed it, but it never helped me save money.
Mint offers so much customization, too much actually, that it’s easy to subcategorize and dilute your budget into something meaningless. Mint offers five different options for food categories alone. Just look at that example above – on first blush, looking good! Maybe cut back on Fast Food! But wait – there are three categories just for food: 600 dollars for Groceries, 10 dollars for Fast Food, and 10 dollars on Restaurants. This person has a $480 budget for food but that wasn’t clear from the start, was it.
Mint makes you boil down your budgets to tens of categories. You allocated $10 for Restaurants but what is the difference between Fast Food establishments versus Restaurants? If you buy some chips and soda at a gas station, on top of some gas, you can’t separate that out in Mint. Are you “over” your gas budget now? And on and on my mind falls down the rabbit hole of Mint budgeting – eventually to forget entirely what I was calling “fast food” and what I considered “restaurant” monies in the first place.
Additionally, I have to sort my various Venmo payments for roommate utilities, eating out, etc., into different options and Mint still thinks I have an overdue $30 electricity payment. Mint also was very confused by QAPITAL (https://get.qapital.com/WVyEK5TsQL) and Mint is lacking the ability to connect accounts to demonstrate it’s still apart of my income calculus. In the end, I often found myself “under budget” for what I had tried to categorize and over budget in non-designated categories.
Here’s my theory on budgeting – I can’t abide by any budget that tries to tell me exactly what, when, and where to spend. I don’t want to live a life where every dollar and cent is allocated, and the consequences of going over one budget area will mean your whole budget is in the red. YNAB’s entire concept is to give every cent and dollar a purpose – and I couldn’t do that. I need flexibility. Mint’s flaw exists in the idea I will spend $20 every month on coffee. In my mind, I see that budget as either 1) great, I have a free $20 to spend on coffee every.single.month. or 2) holy F, that’s a really small budget for coffee and I am too restricted.
That’s why I created my own budget spreadsheet. When I looked at Mint, what I really wanted to know was 1) how much money do I have to spend each month and 2) how much *extra* money am I spending each month? My biggest budgeting goal is simple: have more money.
This is the spreadsheet that I use. It’s very simple, it four columns that represent all my spending. Can it solve all your money problems? No. Will it work every single month? Not perfectly. But if your goal is more money in your bank, here’s my method that so simple it works. I’ve been tracking for five months now and I’m pleased to report I’ve saved every single month and kept some of my bad spending habits in check.
Here is my Step by Step Guide on how to use it:
Step 1 – how much money, per month, do I make? Thankfully that’s pretty easy, just added up my bimonthly paychecks. You have to know what’s coming in to judge how much is going on. (For a simple example, let’s see $3,000)
Step 2 – what are my Necessary Expenses? Necessary, for me, is defined as: rent, electric, internet, car insurance, student loans, gas, and parking. These are things that I cannot avoid (without making serious life changes) and will happen every month. I then take my income and subtract my Necessary expenses. (I determined I need $1500 for these “necessary” expenses. $3000 – 1500 = $1500)
Step 3 – how much do I want to save? Since my objective is just more money in my account, the question is how much am I able/willing to remove from my income and place into my savings account every month. It has to be a reasonable amount that works within my budget, and I can now get the sense of what that might look like once I know my necessary expenses. I would like to note this is not a “savings goal” – because goal gives the idea it’s ok to fall short. This is a savings requirement. I am forcing myself to think about how much money I want to have in 3 months, 6 months, a year. I think that’s scary for some people to realize that the best they can do is save $100 per month, meaning $1,200 for the entire year. They are not on track for multimillionaire status and that doesn’t feel good to realize you might end up with less money than you started the year with. That’s ok – we can fix that. But you have to know if that’s your situation first before anything can change.
Think of this as an (almost) ironclad agreement between you and your money. You can, and will, put X dollars into savings because that’s what you can afford and it’s all been accounted for and you will do it every month. Personally, I know I have my brother’s wedding coming up and need $2,000 at least for that, on top of just needing more money. So I worked to figure out what I needed to save to ensure by October I’ve met that. Again, not a goal, this is a set plan.
I have also determined that since I am paid on the 5th and the 20th of each month, my savings comes out of my paycheck on the 5th entirely. On the 5th, at some point when the money is in my account, I take it from my checking and put into my savings and it’s done. The 20th payday is used for all those expenses that hit me on the 1st of each month. This also means I don’t have $750 in my account at any given time for my other expenses; it’s more like a hundred between the 1st and the 5th, then about 300 from my one paycheck, then another $250 after the 20th from my second paycheck. Take whatever you were left with at the end of step 2, and subtract again. ($1500 – $750 (savings) = $750)
Step 4 – We are now left with $750. You might have noticed I failed to account for something very necessary – food. I did not forget. Food gets its own category. All food, one category. Not groceries here and restaurants there – all food, one budget. But many, many people think food belongs in the categories above savings because they need food. If you believe you need $600 for a food budget – you can do that. But we have to get it into our heads that food is EXPENSIVE and food is often ENTERTAINMENT and food comes from ALL TYPES of places that make it easy to skirt your budgets. Food can be manipulated for huge budgets or small ones. Food above savings ensures you will prioritize that way. Savings first, then food allowed me to realize I didn’t need to buy lunch when I already spent 100 dollars just days before, that I could have made coffee at home, and that I didn’t need little snacks and treats at $1 and $2 that eats away at my budget.
The truth about food is that if you needed to, you can live off white potatoes and have a monthly budget of $40. Now, my partner would probably murder me if I suggested such extremes. In our house, food is about health, it’s a fun activity, it’s an adventure, and it’s about friends and family. So you better believe, when my partner sets her eye on a recipe that calls for flank steak and avocados, we are buying flank steak and avocados. But it’s not a budget be damned situation. I allocate $400 for my food budget. It’s a huge amount of my money, but I’ve already paid off my necessary expenses, and I’ve saved what I set out to do, that I can afford to spend $400 on food every month. I also know we tend to make leftovers and we meal prep often, so big expenses like these even out in the long run. That’s what I value and that’s where I put my money.
(Side note: If your food budget, necessary expenses budget, and savings requirement leave you with zero dollars or less than zero, we’ve hit a problem. That problem is your NECESSARY expenses are too high. Some people may feel their savings is too high, but unless you have attempted over $1000 per month, I am here to tell you that there’s a fundamental problem with your money. I recommend that you can change your saving goals – but you must find dollar per dollar equal savings within your necessary budget. Want to drop your savings requirement by $100 – sure, you just gotta find $100 in necessary savings as well. Can you change insurance providers, do you really need that car, are you being wasteful with your energy – worst case: you have to move. )
What we are left with now is $3000 in income minus $1500 in Necessary expenses minus $400 in food, which leaves us with $350.
Step 5 – Unnecessary budgeting. Congratulations, I have $350 to spend each month on whatever I want. I don’t allocate it piecemeal, I don’t put any requirements on it all. I do track it in my spreadsheet so I can see what I spend it on and I have it automatically set up so that it shows me the total left every time I enter in what I spend. I wanted some new socks and shoes – $80 bucks, put it in the spreadsheet. I went out for coffee – $4.20 into the spreadsheet. I had a bill for an unexpected Doctor’s appointment – that sucks, but $30 comes out of my budget. A spreadsheet makes it easy to punch in $25 for gas under Necessary and add in the $2.50 for chips under food.
Important – the Qapital/Digit/ other automatic savings you might use? Ignore those from all your budgets. Yes I know it pulls out money over time which could mean you don’t have the extra $350 – it’s only $150. If I really felt pressed for money, I could take my savings requirement budget and subtract an average (aka if I think my average savings with Qapital is $300, then I pull $450 out of my paycheck and not the full $750). Generally, these auto savers act in such a way you don’t notice anyway. The money is still yours, just on a different account, so I don’t see any need to track it or stop it from doing what it does best.
That’s my budget system. I can’t package it and sell it with pretty colors, but I can tell you I’ve saved 3,000 dollars in just a few months.