Why do you save money?

Kids

It’s the new year and I’m sure there are a lot of people out there who made resolutions to lose weight, eat healthy, get in shape, join a gym, or exercise more. How many people do you think vowed to get their finances in shape?

If you’re going to stick to your resolutions or goals, you must have a good reason to do it. It can’t be someone else’s goal and it can’t be because everyone else is doing it. Just feeling like it’s a good idea isn’t enough. There has to be meaning behind it. I’m going to share with you the reasons that my wife and I choose to make saving money part of our everyday financial lives.

  • Retirement. For most of us retirement is a long ways away, and the longer you put off saving for it, the longer away it’s going to be. Start early, make it a habit, and watch it grow over the long-term.
  • Our daughters. We don’t want them saddled with a ton of college loan debt when they graduate. As parents, many of us spend a lot of time telling our kids they can be anything. In reality, if they graduate with student loan debt, they can be anything as long as it makes enough to pay the college loan payment. Who needs that?!?!? My wife and I were fortunate to graduate without any student loan debt and it put us in a great place for the future and we want to pass that same opportunity on to our kids.
  • Vacation! We’ve been married over eight and half years. The first time that we actually took a real vacation other than just a weekend or so away was 2 years ago when we went to Disney World. After that, we decided that taking a family vacation was something we should be doing. The only option was to save up for the next one. No one should be paying off their vacation when the next one rolls around.
  • Emergencies. Big problems aren’t so big when you’ve got a nice big pile of money in the bank.
  • Car repairs and maintenance. We know we’re going to need your tires replaced and the oil changed. Instead of it throwing off our budget or messing up any other savings goals, we put a bit away each month to cover car items when they pop up.
  • Purchases. Sometimes we save for a specific purchase, sometimes we don’t. If we don’t have a specific thing we’re saving for and a great deal comes along, we’ve got the cash there to get it. Plus, using cash makes us think twice as to whether we really need it since we’ve spent so much time building the savings up.
  • FREEDOM, FLEXIBILITY, and CHOICES! While money can buy you a lot of things, there are some things you can’t get on Amazon. Job got you down? See someone in need? When you’ve got money, you’ve got control. It buys you options and choices that you wouldn’t otherwise have.

Those are just some of the reasons that we’ve made saving an important part of our financial life. If you’ve made any New Year’s resolutions this year, consider why you made them so you can stick to them!

Tracking Your Finances, the Easy Way

Mint.com Logo

If you’re anything like me, you’ve probably got a variety of checking, savings, retirement, and investment accounts, all at different institutions. On top of that you may have credit cards, a mortgage, or a car loan. It can be overwhelming to get a complete financial picture. That’s where Mint.com comes in.

I love using this service, even if it’s only to give me a rough idea of our net worth from time to time. After you create your account, you will add in all of your different financial accounts. They’ve already got integrations with tons of different financial places. I was surprised to find my local credit union available. For each place that you want to add, you provide the necessary credentials to allow them to read the information. I know at this point, a lot of people would probably freak out. For some reason, I haven’t been that concerned about it. They are well established and have been around for quite some time. If you’re concerned, do some research and judge for yourself.

So, you’ve added your bank accounts, retirement accounts, credit cards, and your mortgage. You can even add your car and that collectible Elvis painting in the attic. It factors it all into your net worth. Here are some of the things that I really like about Mint.com and I’ve found useful.

  • On the lefthand side when you log in, you get the running total of your accounts in one place. It updates when you log in and you get warnings if they couldn’t connect for some reason. If you scroll down to the bottom, you’ll see your net worth. Hopefully it doesn’t scare  you to death.
  • Each week Mint sends out a nice summary showing all of your accounts and how much they’ve increased or decreased. It also gives you your net worth and tells you how much it has increased or decreased. I’ve set it up to also send the same email to my wife so she is able to stay up to date with all of our finances as well.
  • It’s incredibly easy to set up goals. You simply pick what you want to accomplish, when you want to accomplish it by, and which accounts are linked to the goal. For example, if you wanted to save $4000 for a vacation, you enter that in, choose the account you’ll be using to save the money in and it will tell you how much you need to put away each month to reach your goal. If you want, you can put in how much you plan to save each month and it will tell you when you’ll reach your goal. Each month, you’ll get another email showing you the progress of your goals.
  • The Investments tab does a nice job showing you comparisons as to how your doing against each of the major indexes in a nice graph. You can also check performance, value, and allocation in graphs as well.

Mint.com Investments

  • The Trends tab is kind of like the Investments tab. Instead of being for just your investments, it covers all of your accounts. You can analyze your debt, net worth, income, and spending, all in nice looking graphs.
  • If you open up the Accounts window, you’ll see a button for Emails & Alerts. You can create alerts for large deposits, large withdrawals, low balances, bank fees, interest rate changes, going over budget, and a ton of other things. These alerts don’t usually go out right away since they only update information about your accounts on an occasional basis.

There are a few features that are available that I don’t use. One of them is the Transactions tab. On this tab, you can see all of your transactions and categorize them. This helps with some of the other graphs that  tell you where you’re spending money. Honestly, I don’t have the time to go through and categorize them all. Another tab I don’t use much is the Budgets tab. Here you can say how much you want to allocate to different categories and it will tell you how close you’re getting to hitting that amount. Green is good, yellow is a warning, and red is overspending. Of course, this requires that all of your transactions are categorized correctly.

Finally, you’ve got the Ways to Save tab. I have to imagine this is how Mint.com makes their money. From here, they try to connect you up with different financial products like credit cards (stay away), checking, savings, investments, and more. Do some additional research before jumping into something because they suggest it.

I’m sure by now you may be skeptical, or you may not have gotten this far because you were so eager to check it out for yourself. If it’s not for you or after using it you’re concerned about security, you can always delete your entire account. Did I mention that they’ve got a mobile app for your smart phone too?