Financial Vices

Five Cent Nickel recently asked bloggers to post about their biggest financial vices. I wasn't sure what this might be off the top of my head. A year ago, I would have said it was books or purchases from Lush. But since putting myself on a budget, I've been very good about not spending much on either of those things.

Looking at my budget, I'd say that my biggest financial vice falls into the general category of "food." I don't eat out much, but when I do hit up a restaurant with a friend, we typically go all out, with wine and appetizers and dessert. I'm also a sucker for fancy groceries. I try not to go into Whole Foods too often, but when I do, I find myself drawn to all sorts of things. Sure, I'm buying things that are healthy and that will get consumed, but they are a drain on my budget. I'm thinking that I should actually split my grocery budget category - most of the money for typical groceries, with maybe an extra $30 set aside for "splurge" purchases. Maybe that would keep me in line!

Abundant Life Spending Spree - $51,200
I've been watching Planet Green a lot lately, and have become fascinated with alternative energy sources. I love that Ed Begley Jr. has a stationary bike that he rides in order to generate enough electricity to power his toaster before breakfast. Ok, maybe that's a little weird, but at the same time, I bet I'd be more inclined to workout if I was not only doing something good for my health but also generating electricity and doing something good for my wallet.

Anyway, for today's spending spree purchase, we must first pretend that I own a house. I know nothing about this house except that it is a house and not an apartment. And then, I would use the $51,200 to buy a solar panel system - the best I can get for that amount of money. Going off the grid, even just partially, seems very appealing.

Whoops

I have a confession to make. Yesterday, when I paid my credit card bill, I realized that my balance on my YNAB spreadsheet didn’t quite make sense. After some quick math, it was clear that I had forgotten to enter a few transactions. I hadn’t been reconciling YNAB with my credit card statement, so the mistake was easy to make. It wasn’t a lot of money – a little under $30. But it was also more than one transaction.

I went back through two credit card statements and found the missing transactions. Two small online transactions and one transaction where I distinctly remember not getting a receipt. So that threw off the budget a bit. Not a big deal, but definitely a reminder to make sure I’m logging EVERYTHING. Part of the problem was 99 cent iTunes songs. I need to either be sure to flag the receipt when it arrives in my inbox, log the purchase immediately, or just buy myself an iTunes giftcard and not have to worry about it.

I’m considering trying to tighten my financial belt for July and see how much money I can save. July isn’t the best month to be doing that, as I have family visiting and will need to spend a bit of extra money while they’re here. But I can always tighten my spending except for things related to their trip. But I think I’m going to try to see how many no-spend days I can have this coming month and how much I can pad up my budget for August.

Spending Spree - $800
With a spare $800 to toss around, I would buy plane tickets to Seattle to visit a friend who I only get to see about once every few years. It would be a cross country flight, which I hate, but with $800, I could likely get a direct flight, and it would be great to see her and her husband.

Could you go cashless?

As I am sure you’ve read across the blogosphere, a lot of people who are working their way out of debt or have worked their way out of debt have chosen to not use credit cards at all. Some still use debit cards, others have gone to a cash-only plan (though I assume there are still checks written for bills – I can’t imagine mailing an envelope of cash to the cable company).

Is it possible, however, to do exactly the opposite and use a no-cash plan? A plastic only plan (meaning no checks)? I’m sure there are people out there doing it without realizing it. And it seems that every movie and book about the future seems to think that we will be a cashless society at some point.

When I first sat down to write this post, I thought that a no-cash, plastic only plan would be difficult, but the more I think about it, the more I think it’s doable.

Personally, I could do it, but it wouldn’t be worth it. First off, while I can pay my rent electronically, there’s an additional charge. I also believe there is a fee associated with doing bill pay direct from the bank to my particular apartment complex. Until that fee is waived, I will be writing a rent check.

I don’t use much cash, though I don’t like to be without it. I try to always have $20 in my wallet, just in case. In case of what, I’m not sure. What do I spend my cash on? I’ll use it if I’m making a very small purchase where it seems ridiculous to pull out the credit card, but mostly it goes to the Farmer’s Market or for splitting bills when I go out for drinks with coworkers.

Without cash, I could still go out for drinks and split the bill, it would just be more complicated. I would likely end up with the cash from everyone else and then have to deposit it. The Farmer’s Market is a different story. While a few of the vendors do take credit cards, that’s mostly those selling higher priced things. The vendors I buy from, the ones selling fresh fruits and vegetables, don’t take anything but cash. Do I need to shop at the Farmer’s Market? No. But it’s something I like.

Eventually, I think we will go to a cashless society. I have no idea when that will be, but it seems likely. Of course, that just adds to the risk of people being able to overspend and rack up extreme credit card debt.

Do you think you could go cashless? Would you want to?

Abundant Life Spending Spree - $400

I bet you thought I was going to go for a Kindle after yesterday's post. Nope, today's random purchase, if I had $400 to spend would be a new iPod and an Aerogarden. Yes, I realize the Aerogarden isn't all it's made out to be, but hey, this is $400 that I'm supposed to be throwing around!

Reducing Impulse Purchases

One thing I've noticed since getting into the world of personal finance and carefully tracking my expense categories is that I'm much less likely to make impulse purchases. It used to be that I would see something that I wanted and know that I could afford it so I would just buy it without another thought. Now, for the most part, I stop and think about what I'm about to buy before I buy it. Is this really something I need? Or if it's not something I need, is it something I really want to buy right now? Can I find it for less money later? Will I still be happy with this purchase tomorrow? Next week?

One trick that I have learned is that I will pick up an item in the store and walk around with it for a while as I'm looking around the store before I actually make the purchase. Sometimes I decide to put the item back on the shelf. Other times I decide to buy it.

I do occasionally find myself reverting to my old ways, and every time, there's a moment of guilt at the impulse purchase. But even then, I find that most of the time, my impulse purchases now are things that I really do enjoy. For example, on a whim, I picked up a bag of gourmet coffee at Harry and David the other day. This is something that's a big treat for me, as I love good flavored coffee. Was it something I needed? No. But I realized that in less than a month, I have family and friends coming to stay with me for a few days. How nice it will be to have this coffee to share with them.

Additionally, the impulse purchase I'm talking about here is about $12, as compared to impulse purchases of yore, which could be anywhere from $25 to $50 at a time. Plus, if I think about it, I normally buy pretty good coffee for daily use that, on sale, costs about $6. So really, the impulse buy only cost me $6 more than normal.

Am I justifying the impulse purchase? No. I still would prefer to consider all my purchases before buying. But I do like that my impulse purchases have turned into something so small. Maybe in a few more months, they'll be down to pennies.

Amusingly, I'm going to end this post with day two of the abundant life spending spree.

Day 2 - $50
With $50 to spend on anything today, I would buy a skirt that I've been eyeing in a catalog. It's casual, probably too casual for work, and admittedly, I don't wear a lot of skirts except for at work. But it's so pretty!

Rewards Programs

I've been sort of half-heartedly using MyPoints.com to try to rack up some points for gift certificates. I've never shopped through the sites, but I read the e-mails, and they do have offers for some pretty great free sites (unfortunately, mostly sites I already belong to like SparkPeople and Kaboodle). I realized that I was getting close to a reward level and decided to look at what sorts of rewards I could get.

Admittedly, the list is limited, but there's a decent enough variety that I found a few different gift certificates I would like. But now, my question is this: Do I spend the points for something practical, like a CVS gift certificate, or do I spend them for fun on something like an iTunes gift certificate?

I tried to think about what I do with other rewards programs. The two I use the most are on my Amazon.com Chase Visa and my Discover Card. With the Discover Card, rather than cashback, I tend to bump up to a gift certificate, as you get more - $20 cashback gets you a $25 gift certificate for some merchants, for example. I've used those for both a shoe store (which I spent on shoes for work) and for Lands End (which I spent on new sheets). Sort of practical, I suppose.

I treat the Amazon rewards differently. These are used for either fun items or for gifts for family and friends for birthdays and holidays. I have bought grocery items from Amazon, but never used the Amazon rewards gift certificates for the purchase.

I'm not sure what I'll do with my rewards at MyPoints. Maybe I'll wait and see how my budget looks before I make a decision.

How do you treat these types of rewards? Are they fun extras or are they just more funds to be used in your normal budget?

Can you spend irresponsibly if you're rich?

I have a friend who occasionally comments about how things are expensive and how she is working to pay off her credit cards. This friend also has a tendency to drop $20 on "whatever" around five days a week. In my opinion (and the opinion of some of our other friends), this is a stupid and irresponsible practice. If she would limit her "whatever spending" to once a week (or less!) she could save a significant amount of money. I don't think she even realizes how much she's spending, because it's "only $20."

This got me to thinking. Blowing through money when you're in debt and don't have much savings is clearly irresponsible. But what if my friend were doing quite well for herself? Let's say she's planning properly for retirement, owns her house and her car, has an emergency fund, and has a solid amount of savings. Now what about her tendency to drop at least $100 a week on things like books and knick knacks and coffee and other such things? Is it still irresponsible?

I go back and forth on this, primarily because of how I was raised. I have always believed that no matter whether you have the money or not, you should think about your purchase before you make it. Sure, you can afford those five books at the bookstore. But do you really need them? Do you need them all right now? Can you wait, or buy them online later for less money? Would you be just as happy with two books? If you decide yes, that you want all five right now, fine. But at least you thought about it.

Half of the time I see my grandfather, he's wearing clothes he's had for years, like a shirt from the tee ball team I played on almost 20 years ago or a pair of socks that originally belonged to my other grandfather, who passed away over 23 years ago. Admittedly, the t-shirts have seen better days, but if he's just out doing yard work, who cares what he's wearing, right? He could absolutely afford to buy new shirts and socks. He could buy a truckload of new clothes. But it's not something he needs. I wouldn't say he's excessively frugal - he just thinks about how he spends his money before he does it. He and my grandmother still go on fancy vacations and eat at nice restaurants and go out for ice cream.

I wonder if that's why I think that even if my friend were wealthy, her frivolous spending would still be fairly irresponsible. I tend to feel like her purchases are often wasteful, and I think of all the other things she could do with that money. Even if you're financially well off, even if $100 is just a drop in the bucket, I still think that money shouldn't just be frittered away. It could be saved for larger purchases or gifted to family or donated to charity or randomly handed out to panhandlers on the street.

Of course, I'm not in a position to tell my friend what she should do with her money, and given her spending, I don't think she'll ever get herself to a point where she will actually have an extra $100 to throw around. But it's something to think about.

Jet lagged, but home

I love vacation, but I have this tendency to take vacations that are so busy that I need a vacation when I return! No relaxing spa weeks for me. Though perhaps that's something I should try out one of these days...

I learned on this trip that my attention to personal finance really has changed the way I spend. Normally, on a trip involving the airport, I hit up a store for a magazine or two. This trip, I didn't buy anything but water and food in the airport (yes, I could have brought along all of my food, but it was really more hassle than I was ready to deal with on the way home).

Additionally, I came home with very few souvenirs. Again, in the past, I would have picked up a number of things that caught my eye, but this trip, I was much more choosy. I fell in love with a t-shirt and picked up a great new coffee mug, and also grabbed a gift for a friend, but beyond that, no spending. I entered all of my expenses into YNAB this morning and am quite pleased with how it turned out. I'm going to come in under budget this month!

I'll be catching up for the next few days, I think, but I hope to be back to regular posting soon.

(And on a happy note, I arrived home to find my stimulus check in the mail. Definitely something to brighten the end of vacation!)

YNAB - A Review

I started using YNAB a few months ago and have sporadically updated my progress, but after a comment, decided it was time to do a true review and update.

I am using YNAB for Excel, meaning that it's a spreadsheet. It's not as fancy as YNAB Pro, the standalone program, but it's exactly what I need. First off, I love spreadsheets. I love that I can edit this as I please (of course, for fear of screwing things up, all I edit is a bit of the formatting). I especially love that I can use it at work or at home. I keep the official copy of my budget on my computer at home, but in my GMail Drafts folder is an e-mail with a draft copy of the budget. That way, I can update it on my lunch hour, or check to see what kind of money I have left in my dining out budget before going out for drinks. Plus it's just a second backup of the file - if something should happen to my computer at home and my external hard drive, I've still got a copy in my e-mail.

I'm not sure what I like the best about YNAB. I love the general method of living on last month's income. It's nice to have a bit of padding and know that if something comes up and I overspend by $100 this month, I have the money for it, I just have to spend less next month. I love that I can make up whatever categories I want. I love that I can change my budget month to month with no difficulty.

Perhaps this is not kosher on the YNAB plan, but I love that I can make a budget on the 1st of the month and then on the 15th, move things around so the budget reflects my actual spending. Yes, I realize that defeats the idea of the budget, but I have created for myself an "other" category. Some things just automatically go in there, like items I will be reimbursed for. But for the most part, that money gets moved around. Grocery budget falls short? Pull from the other category. Decide to spend more on someone's gift? Other category. I treat it as a flexible spending category - the money I can spend on whatever. And at the end of the month, if there's something left, it goes into the "Wishlist" category. I have this short list of things that I want to buy - books, movies, electronics, other non-necessities - and the more money that I can get into my wishlist budget category, the closer I am to buying one of those items.

I like that it tells me how much I've spent in each category so far for the year, and I like that I can very easily see where I've gone overbudget. Those bright red numbers really do help curb my spending.

I think my favorite thing is the ease in planning ahead. I know that my bi-annual car insurance payment is coming up in a few months. I have been budgeting 1/6th of that amount for the past few months so that when the payment comes due, I will have all that money set aside. Yes, I realize I could do this without YNAB, but I like that the spreadsheet carries the amount over for me. It has really made saving for big purchases much easier.

Some people don't like the idea of YNAB because they think it will be time consuming. Making my monthly budget takes maybe 15 minutes. I like to enter my expenses every few days, and I do so by saving receipts in my wallet. I also do most of my spending by credit card (and I don't track my cash, just record a "cash" expense) so it's easy to pick up any expenses I might miss. This can easily be done on a weekly basis, and really doesn't take that long.

I've never had a problem with credit card debt or not having money to pay my bills, but I really never had a good idea where my money was going. I knew that I had enough money in my bank account to cover the bills, and that meant that some months I spent less than I made and some months I spent more than I made, but it all evened out.

I really like knowing where my money is going. Am I saving more? I think so, especially in the months where the big expenses (like insurance payments) hit. Before YNAB, I would just pay the entire bill and then have to really scrimp with the rest of my spending. Now that month will be just like every other month. I'm slowly trying to build up money in a number of categories as well, so that I can have a bit of a buffer in my grocery budget if I want to splurge, or in my clothing budget if I find a great pair of shoes on sale.

While I highly recommend YNAB for anyone looking for a budget, I understand that it's not for everyone. I do recommend some method of tracking where your money goes each month. You might be surprised.

Getting sucked in

I think I've been on a tight budget a bit too long. I'm finding myself wanting to buy things that I've already decided aren't things I need, at least not at this point. Thankfully, my budget will loosen up a bit after this month (too many weddings and family vacations crammed together), but I still don't plan to be spending just because I feel like it.

The latest draw is Netflix. I've never been a Netflix subscriber. I do like movies though, and I especially like watching movies at home. For the most part, I tend to wait until a movie is available on DVD before seeing it, unless it's something I really want to see or a friend suggests we make an evening of it. I think this year, I've seen Under the Same Moon and The Other Boelyn Girl. That's it. (And I highly recommend Under the Same Moon - excellent movie.) I'll probably go see the upcoming X-Files movie in the theaters, just because that seems to be the sort of movie that would be best on a big screen, plus I was an XF fan for so many years that it seems appropriate.

So I seem like the type of person who Netflix would be great for. I love the idea of being able to create a queue. I love the idea that I don't have to go anywhere to get my movies. I don't love the idea of spending $20 a month for this service. While I like movies, do I actually rent them all that often? No. Maybe twice a month, and as of late, I've been using Redbox and getting them free. InsideRedbox has a list of free rental codes that you can use at Redbox locations. Even if you don't use a code, a rental is only $1 a day. Yes, the selection is limited. But it's $1 a day, or even free! You can't beat that.

I have a fairly sizeable collection of movies and tv on dvd at home, some of which I haven't watched in years. I'm embarassed to admit I even own dvds I've never watched, things that were gifts or picked up on sale. Rather than go the Netflix route, I think I'm going to make it a point to watch every single dvd I own - both tv and movies. Once I do that, then I can consider a Netflix subscription. Or maybe suggest it as a Christmas gift.

It's easy to hear about great products and think "Oh, that's perfect for me!" because you hear the good points and how other people use the product and don't think about how it's going to work for you. I just need to continue to think through my purchases. I think we could all save a lot of money if we just slept on it. 24 hours later, would you still think it was a good idea?

Budget Busters

Mrs. Micah recently posted about her budget busters and so I'm tagging myself for this meme. What are my five budget busters?

This comes at a time where my budget has already been busted and exploded for the month. So it is well timed.

1. Not planning ahead
I think this is the biggest problem with my budget. YNAB has helped me plan ahead in a lot of areas, but in other areas, I completely neglect to think about what I might need to spend before I make that month's budget. For example, I have been setting aside money for my car insurance payment for the past two months. I have planned ahead so that the bill won't make a huge dent in my monthly budget. But on the other hand, this month, I only budgeted $50 for dining out. At the beginning of the month, I knew that I had two dinners planned with friends. I live in D.C. The odds of me being able to go out to two nice-ish dinners and spending under $25 each time, including tip, is very small. Very very small. I should have budgeted more in that area.

2. Unrealistic goals
Sometimes, I look at the month, and I think "Oh, I can get by without spending more than $10 this month on household items." Never mind that I typically spend closer to $15-$20 each month in this category (it's a broad category for me). And inevitably, I end up spending more than I planned to.

3. Buying in Bulk
I don't just mean buying from a store like Sam's Club or Costco (I never go to either anymore). I mean that I have a habit of stocking up on things. Is this a bad thing? Not necessarily. Especially if I'm buying something on sale. One of my personal vices, for example, is that I have a can of Coke Zero every afternoon. It's a sweet, calorie free treat that calms my cravings for a snack and keeps me going. It's a vice I'm not willing to give up. So I go through a 12 pack of Coke Zero in a little less than 2 weeks. Today, I counted that I still had 7 cans left, so I didn't need any, but I decided to check the price anyway when I went to the store. 12 packs were on sale for $2.29 under their normal price. Not a bad deal! So I picked up two. Nevermind that I didn't need them. Yes, it was a good price, and I saved nearly as much as I would spend on a single 12 pack, but in terms of the budget, that was money that shouldn't have been spent. I do this when things aren't on sale as well. I notice that I'm out of frozen broccoli, so when I go to the store, I pick up two bags rather than one. I go through it in spurts, so I might use both bags this month, I might not. Could I have just bought one bag? Yes. (And note that I pass the grocery store on my walk home from the metro, so the idea of an "extra trip" just means a few minutes, no driving needed.)

4. Borrowing from Peter to pay Paul
So I notice that I've blown my restaurant budget for the month. But hey, there's $15 left in my household budget! So I'll just reduce my household budget for the month and then add the $15 to my restaurant budget! Perfect! Until a week later when I realize that I'm out of laundry detergent and really do need to wash clothes sometime this month. Whoops.

5. Groceries
Groceries are a hard category for me. This also falls into my buying in bulk and my failure to plan ahead categories. Food is the hardest area for me to budget. I try to eat healthy and also eat frugally. I will never buy ramen noodles, even though they're cheap. They're not healthy. I spend a good amount of money on fresh fruits and vegetables, and prices on both have increased in recent weeks. I am hoping the return of my local farmer's market will help that. But if my grocery budget is gone for the month and I realize that there are three days left and I don't have the proper makings of a well rounded meal, well, I'm going to hit the store and buy what I need. My health and my diet are more important to me than keeping my budget. I think what I need to do is budget more for groceries every month, what with the rising cost of food. The goal will be to end the month with money leftover in the budget, but that's much better than busting the budget all together.

I'm not going to tag anyone for this meme either, but feel free to post your own budget busters! I'd love to see what others think!

March Net Worth Update (+0.06%)

As I put together my monthly assets and liabilities table on Tuesday, I thought I was April Fooling myself! I was hoping for a month where I didn't lose too much money.

I actually got very excited when I started entering numbers and realized that for the month of March, I was going to end up with a net worth increase!

Ok, so it's not much. My net worth went up 0.06%. The increase was due to my cash accounts, as my investments dropped a bit, but not as much as I had feared. I'm hoping this new trend continues.

One of my 2008 goals had to do with a percentage net worth increase. So far for 2008, my net worth is still down 2.58%. Not great, but it could be worse. It could be much worse.
Here's to April also moving in an upward direction!

Mid-Month Budget Update

It amazes me just how quickly a few little things add up to a blown budget.

That's right, halfway through the month and I've blown my budget. Not by much, and after some juggling, only in one category, but it's still hard to see on the spreadsheet. Since I am working on YNAB and getting to a zero based budget (and having a month's worth of expenses in reserve), it really won't cause any problems. Just frustration.

My goal is to have a month's worth of expenses saved by the end of this month so that next month, I can bank both of my paychecks for use in May. I should get there this month provided my tax return shows up (something happened with the communication between the IRS and my bank, and so I'm getting a check mailed).

I am just kind of surprised how quickly my budget got out of whack this month. I don't feel like I spent out of control, and yet my spending is pretty much done for the month once all the bills are paid and the money is put into savings for upcoming bills. I've quickly realized just how out of control my spending was in the past. Six months ago, a month with expenses like these wouldn't have made me think twice. Now I'm realizing just how easy it is for money to disappear.

In all honesty, I don't feel like I overspent this month, even with the budget issues. I had a couple of things come due that I had forgotten about (and somehow, I ended up with a 2 year virus protection renewal rather than just one), and I made a few bulk food purchases that will last me months. I ate out more than normal, but I was also out of town, so that was a given. What I did learn is that I need to continue to put small amounts of money into all my budget categories so if I do have a month where I spend more on, say, household items, it won't break the budget.

The goal for the rest of the month is to try to keep spending as tight as possible, and continue to cull through my belongings to see what I can sell (and donate). This weekend I placed a few things on eBay, and already one has sold, leaving me with $25 after shipping and paying the fees for all the items I listed. Another item seems to be going through a minor bidding war. My packrat tendencies continue, but I'm going to try to get rid of a few things each weekend to both clean out my closets and pad my budget a bit.

Spending too much... and yet not...

Yesterday, I went on a bit of a spending binge. At least, I definitely felt like I was going out and being "bad" with my finances. I haven't been shopping for non-necessities since early January, and I have definitely been feeling the pinch. I have a list of things that I want/need to buy when the money comes available (a new cover for my iPod, as the old one has a huge rip in it, a good thermos to bring coffee to work, etc). But I've been waiting.

Really, I blame spring for what happened yesterday. I woke up and it was nice out. Really nice. (Ok, so it was humid and then rained, but it was warm at least.) I realized that perhaps the sweater I wanted to wear to work was not so weather appropriate. I also realized that I don't have a lot of warm weather work clothes.

I decided, therefore, to go shopping at lunch. I'm lucky in that I work in an area with a number of stores within walking distance. I knew that I really didn't have much of a clothing budget this month, but I felt I needed to buy something to start fleshing out my spring and summer wardrobe.

I ended up coming back after lunch having been to buy clothing, and then to the sporting goods store and also Bed, Bath, and Beyond. No, those last two aren't places to buy work clothes. And I was feeling like I had really blown the budget. What did I buy?
A very nice knit top in a style that I wear often
A new knee brace for running, something I've been looking at for a while
A new soap dish for my shower, since the old one fell and broke last week

A "major" shopping spree, and I came back with things that I needed. Well, I didn't absolutely need the shirt, but it was not unneeded either. What about the budget? After plugging the expenses into YNAB, I ended up a total of $30 over in a few categories. I've already made an extra $18 selling books on half.com, which means I'm $12 over budget. Not bad at all, especially knowing that I intentionally overbudgeted in certain areas.

Of course, this can't happen all the time, but it made me realize that I can't keep my budget as incredibly strict as I have been. I can splurge a little bit from time to time, as long as I'm careful to not go overboard.

I think that too many times, we create budgets for ourselves and try to hold ourselves to incredibly strict financial rules. While it is important to save for the future and make smart choices, we also need to reward those decisions in the here and now as well.

Mint.com

A number of personal finance bloggers have written their reviews of mint.com, and after a few months of use, I'm ready to contribute my opinion.

First, what is Mint? Mint is a free, online tool designed to help you manage your money. Best of all, it does a lot of the work for you. You input the information for your banks and credit cards, and Mint access and compiles all the information. Mint tracks and categorizes your income and expenses (and you can change those categories if you don't like Mint's recommendations). You can set budget amounts for the various spending categories and Mint will tell you when you are getting close to your budget and when you have blown your budget. Additionally, one of Mint's more unique features is that they search for and recommend "offers" for you. They look for credit cards with lower interest rates, bank accounts with higher interest rates, and other services as well.

Sounds great, doesn't it? Let's break it down into the good and the bad.

The Good:

• Free.
• Automatic - Mint downloads everything for you.
• Charts and graphs - who doesn't like pictures?
• Alerts when your balances are low or when you have spent a certain amount
• Automatic categorization, but you aren't locked into these categories
• Mint recently added the option to split categories as well. For example, yesterday I went to the grocery store. I bought food but I also bought cat litter. I would like to categorize the food as "groceries" and the cat litter as "pet supplies," even though it was all in one big purchase. (Until this feature was added, the inability to split transactions was one of the big reasons I wasn't sold on Mint.)
• Historical view of your income and spending. While you may not always notice that you're spending a lot on X every month, when you look at what you spend on X over time, you might be more inclined to rethink those expenditures

The Bad:

• On occasion, Mint makes some ridiculous categorizations and renames the item they downloaded so that it makes no sense to me and I think there is a fraudulent charge on my account. But Mint does allow you to click and see the original name for the downloaded item, so you can make any changes necessary.
• You do have to enter your log-in information into Mint's servers. Personally, I am not concerned, but any time you are dealing with financial information over the internet, there is a risk. That said, Mint appears to be doing everything they can to protect your information. You can read more about that here.
• It's not magic. You still have to log in and actually read the information. As of yet, no company has figured out how to port this information directly to your brain. And then, after reading it, you have to do something with it.

The Weird:

• Mint's "Ways to Save" offers. Because I already have a high yield savings account, Mint has yet to recommend anything along those lines to me. But the recommendations that Mint has provided have been... less than spectacular. They are recommending I switch from Comcast to Verizon Fios - which I would consider, if it were offered in my area. They are also recommending I ditch one credit card for another purely because it has a slightly lower interest rate. Because I pay off my credit cards every month, I am less concerned about the interest rate and more concerned with the benefits and rewards provided by the card.

All in all, I think Mint is definitely a worthwhile product to try out. And it is very important to note that Mint is still in beta. They are continually making updates and upgrades to their system. As I mentioned above, one of my negative points about Mint got moved into the positive category after a recent update.

Do I plan to continue to use Mint? Probably on and off, but not on a regular basis. Why? Because I track all of my finances, including my investments, in Microsoft Money, something I have done for years. But I do think that Mint is great for someone looking to start using some sort of personal finance tool, or for someone who is looking to switch. One of the hardest parts about getting control of your finances is tracking your spending and Mint does that for you. You just have to be sure to use that information wisely.

Overdid it this month

So November isn't quite over yet, and already, I've blown through my monthly budget. My method of budgeting is pretty loose. I earn X dollars. Every month, I put Y dollars into long term savings (and make retirement account contributions). Everything left (let's call it Z dollars) goes into a short term savings account to be spent throughout the month, though the plan is always to have money left over so I'm increasing my savings even more.

November? I spent Z dollars. And then I spent more than Z dollars. Not by a lot, only about $50 or so, and technically, part of that was shipping some bar exam review materials to a friend who who bought the books off of me, and when she pays me, the check will be more than $50. But still. The spending was a little out of control this month. Of course, because I always try to have money left over at the end of the month, the extra money just comes from the money I didn't spend last month, so I didn't go into debt or have to delve into any of my long term savings accounts.

Regardless, it was definitely a wake-up call. Normally, I manage to stay well within my budget. While I put money into short term savings so I can spend over my monthly budget on occasion, that is designed for special expenses, like plane tickets, for example.

So what am I doing to fix this problem? First off, I printed out a categorized list of all my expenses for the month. A quick glance told me that a chunk of my spending came from gift purchases, both Christmas and birthday gifts. Ok, so that was unusual spending. But what else was there? I spent more than normal on groceries, and while a bit of that was purposeful stocking up, some of it was frivolous treats. So that's something to watch for December. I also spent a chunk of money on dining out. While I do budget for meals out with friends, I also noticed a number of meals that I picked up on the run. That's not something my budget or my waistline needs. Of course, it wasn't a large amount of money, but all those little things do add up. And last, but not least, I did some Black Friday shopping. Again, not much (I spent under $100), but it all adds up.

So the goal for December is to spend less than I normally spend, to truly watch what I'm buying and try to make smart choices. After all, my new savings plan starts in January. I need to get ready!