Using the Budgets Tool
After you've gone through your list of budget items and properly configured them with realistic values (you hope), how exactly do you use the Budgets tool?
The first and most common usage is combining your budget settings with the Alerts feature (see Lesson 6, "Alerts") to receive emails (and SMS/text messages if you've configured it; again, see Lesson 6 for details) that alert you when you've gone over a specified budget. Figure 8.18 shows that I configured the Alerts feature to send me an email if I exceed any budget amounts. (So when I hit that $101 mark this month on book purchases, I can look forward to an email letting me know. If my wife is smart, she'll ask me to put her email address in the secondary email address field and get the same alert!)
Figure 8.18 Use the Alerts feature to get emails and text messages when a budget amount is exceeded.
The next way I can use the budget feature is to see how much money I have left over after I assign values to all those items I want to track. To do this, I click the Budgets tab (on the Overview page) and look to the right side of the Budgets page at the running calculation shown in Figure 8.19.
Figure 8.19 Get an estimate of how much money is left over.
Look closely at Figure 8.19 and understand exactly what these values mean. The first, Income, is easy—this is how much money Mint.com determines you are bringing in each month based on deposits. You can verify this by clicking the Edit Details button for the Paycheck category, also shown in Figure 8.19, and modify it if you know of other sources of income that aren't being properly flagged by Mint.com as income.
The next item, Spending, is a total of all the budget values you have set to this point. So if I have only three budget items of Gas, Food, and Rent and assign values of $200, $300, and $400, respectively, my Spending value will show $900.00.
The third item, Goals, likely shows a value of $0 unless you tinker with the Goals tab (or jump ahead to Lesson 9). Lesson 9 covers Goals, but think of them as similar to a private piggy bank that you set aside (or that spare mattress in the guest bedroom), and any money placed in it is off limits and will be deducted from the Income value.
The final item, Left Over, might make you leap for joy at first when you see how much free money you have in your accounts! Sorry to disappoint, but this value does not necessarily reflect how much money you actually have in your checking account; it means only that the value Mint.com has identified as your monthly income has not been completely divided up among various budget items. I might have a monthly expense of $500 that goes to Big John's Handyman Service for lawn and gutter cleaning services; however, if I haven't budgeted for that by increasing my Lawn & Garden budget category by $500, this Left Over value will fool me every time. If you make sure to set your budgets as accurately as possible, then and only then can you trust the Left Over value to properly reflect what's approximately left over in your cash accounts.
Another way to use the Budgets tool is to sort your budgets according to your spending. In Figure 8.20, you can see that if you select the Sorting By drop-down menu to Amount: High to Low, your budget list is reordered to show you where the largest spending occurs. This may pick up budgets that normally show up in the Everything Else list. You can likewise sort your budget list with Low to High spending.
Figure 8.20 Sort your budget by spending level.
Finally, you can also view your budget list using data totaled for the current year. Figure 8.21 shows how clicking the This Year sorting option will add up budget categories for all the months of the current year and also show you total spending (versus total budgeting) for each category.
Figure 8.21 View an entire year's worth of budget data.