As the old adage goes, it is best to focus on what you can control. The weather, for instance, is not worth fussing over. In the world of investing, two of the most important things we can control are our budget and how much we contribute to our retirement accounts. Fortunately, both of these items are very closely related. The more you save in your budget, the more you can afford to contribute to your retirement accounts.
We’ve all heard the old song and dance about how skipping your $4 dollar daily latte can have profound impact on your budget. Well, guess what? It’s true. That’s $120/month that could have been better spent. With 7% interest over a 30 year period that adds up to $147,000 dollars!
I don’t want to pester you over your daily decisions; rather I want to point you in the direction of a budgeting tool that will help you identify the “latte” expenditures in your budget.
One such tool is called Mint.com. The cool thing about Mint is that it allows you to consolidate your bank accounts, credit cards, home loans, and investment accounts under one user interface. Rather than spending 30mins checking each individual account Mint.com brings them together and gives you the 300ft view. It even gives you tips and suggestions for ways to improve your budget and allows you to set goals for things such as retirement and large future expenses. I should also mention that it is free.
Mint is also extremely interactive. It alerts you via email, for instance, if you have exceeded your monthly budget for a particular category or if a bill is due. To avoid inundating you with these notifications it has the added benefit of letting you control the content of the alerts.
You may be wondering about the security of Mint. Having all of your financial account in one location is daunting. Two points sold me on it:
- Bank level security that alerts users to any suspicious transactions.
- It is a read only service. Money cannot be moved between or out of your accounts. That said is important to understand that all of your passwords will be in their system. To further protect your information I recommend you utilize the security features of your individual accounts.
The typical budgeting process of balancing your checkbook and creating excel spreadsheets can be a hassle. With the advent of web based tools such as Mint.com the process has been streamlined. Even better, it will help highlight the “latte” type expenses that, when avoided, can have a substantial impact on your retirement goals.
Mint.com comes in web format as well as an application for the iPhone, iPad, and android devices.
P.S. Don't LET YOUR FRIENDS MISS OUT. Share this article:
Lowell developed a passion for finance in high school, after some hard lessons learned. Now as a Wealth Advisor, he appreciates the opportunity to help his clients articulate, achieve, and expand on their financial and associated life goals. He particularly enjoys working with mid-career technology professionals.
Articles Straight to Your Inbox
Subscribe to Merriman's Envision Newsletter to receive in-depth articles and expert commentary, delivered monthly to your inbox:
"*" indicates required fields