If you’re looking for the best online tools to help you stick to a budget, you’ve come to the right blog post. Don’t make the mistake of thinking this is accounting software! We’re not talking about tools that will help you reconcile transactions and balance checkbooks — these are budgeting aids at their finest, not accounting tools.
Mint: Comprehensive, Automated, and Easy
Mint is an amazing piece of software. You have to feed it all of your financial account information — it has a nearly-comprehensive understanding of accounts offered throughout the United States and Canada — but it has no ability to use the accounts. (Well, you can authorize it to pay bills for you, but that’s the only interaction it has with the accounts other than harvesting data. That authorization is off by default and requires special interaction from you to activate.) Mint even plays nice with PayPal, Venmo, and BitCoin!
The data Mint harvests from your financial accounts is obtained in real time, so seconds after you swipe a card, Mint knows. But it does so much more than just track your purchases. You can (and should!) tell Mint about your bills, your loans, your investments, your mortgages, your home equity — basically everything you do that involves your income, assets, liabilities, and outgo. The more access you give it, the more accurate and useful a tool it becomes. (It should be noted that any cash you withdraw and spend must be entered manually, for obvious reasons.)
Your spending habits are calculated almost instantly when you attach your accounts, as Mint pulls the past few-to-several months’ data and analyzes it. You’ll be able to see right away if an excessive amount of your money is going to, for example, coffee shops or into the AppStore. But that’s not the glory of Mint. The real glory of Mint is that once all of your information is put in, it keeps a real-time tally on its main screen of your total net worth. When you’re working in real estate investment, it’s easy to get lost in the details and take your eye off the ball — with Mint, it’s right there in front of you every day.
Related: The Foolproof Monthly Budget: How to Save Up Money to Buy Investment Properties
For shorter-term milestones, Mint offers an aptly-named “goals” feature that allows you to set any number of, well, goals. “Save $12,000 for vacation” — or more likely for this crowd, “Save $12,000 to remodel the kitchen and bathroom of the Westfield property” — for example(s). Mint won’t move any money itself — remember, it doesn’t do that — but if you give it an amount you want to save, a date you want to save by, and account to track, it will tell you how much you need to save per day, remind you if you start to fall too far behind, and (depending on the nature of the goal) give you advice related to your specific endeavor.
Tl;dr: If what you need is an understanding of where your money is going, when, why, and how — along with a few great tools to make sure no bills are missed and your fiscal goals are met — Mint is a great option.
You Need a Budget: The Windows to Mint’s Mac
If Mint is the easy-to-use, free budget-assistance app that comes with a variety of pre-built tools that can guide you forward, You Need A Budget (YNAB) is the easy-to-use, not-free budget-assistance app that comes with a huge variety of resources — not just tools, but tutorials and even general “philosophical” guidance — that allows you to customize the app in a much deeper fashion. YNAB costs a relatively minor $5/month (or $50/year), which is almost certainly less than you’ll save by using its powerful tools.
Like Mint, YNAB asks you to connect all of your various accounts, and it harvests transaction data from them. But where Mint “starts” with the spending of the money, YNAB starts with the earning of the money, asking you to give each dollar a “job” the moment it is earned. Also unlike Mint, YNAB allows (requires) you to build your own set of spending categories. So, where Mint will automatically assign all money spent at AutoZone to “transportation,” YNAB will ask you what to call the money spent at that location, so if you’re into classic cars as your hobby, you can totally call that “entertainment” or even “’76 Charger restoration” if that’s how you roll.
Because you assign “jobs” to each dollar before you spend it, YNAB’s major purpose is to inform you when you’re nearing, reaching, and overspending the limits on each of your self-created categories. The fact that you personally create and set the limits on these categories makes you far more intimately aware of your own spending habits than Mint’s one-size-fits-all setup, but it obviously also requires far more time and effort invested to put together as well.
Perhaps the greatest aspect of YNAB, however, isn’t the “budgeting” part of the app at all — it’s the education that comes with running through the process. Not only will using YNAB make you comfortable with thinking about the future, but the various “rules” and other hints and tips will show you how to think about the future in a way that is maximally useful.
For example, one of YNAB’s big themes is “embrace your true expenses.” The essence of this concept is to look at your expenses not in terms of predictable monthly bills, but in terms of “unpredictable” long-term expenses as well. By breaking down things that will eventually happen and will impact your income — car repairs or water heater replacements — into X “chunks” and adding a “chunk” for each of those expenses to each month, you can easily see how those long-term expenses can be saved for and turn them into a non-issue rather than a chaotic stress-ball.
Related: Don’t Forget To Budget For These 3 Overlooked Expenses
Perhaps the best way to decide between using Mint and using You Need a Budget is to not decide — after all, there’s nothing keeping you from using both, and, in fact, the two cover each other’s weaknesses quite effectively. Mint’s historical perspective will give you an instant idea of where your money is going, and YNAB’s income-planning perspective will help you take that information and deliberately sculpt your future income. Mint’s auto-generated categories will help you decide how to set up YNAB’s user-generated ones without having to pore over the tomes that YNAB provides as guidance.
By using the two together, you can reach financial stability — and more importantly, financial comprehension — far more effectively than with either alone. Good luck!
What budgeting tool do you use? Which of these do you prefer and why?
Let’s discuss in the comments section below!
Note By BiggerPockets: These are opinions written by the author and do not necessarily represent the opinions of BiggerPockets.