Over the next several days, I’ll be detailing all of the tools I use in my financial ecosystem, from accounts to services. I’ll explain what I use and why.

For a long time, I struggled with keeping track of our income and expenses, and as a result, we frequently found ourselves counting the days until the next paycheck came in. No matter how good things looked at the beginning of the month, we would somehow manage to end up broke by the end of it. I’d tried a handful of different budget solutions over the several-year span of our marriage. This including an Excel spreadsheet, Microsoft Money, Quicken and a few different budget-oriented websites. Nothing worked exceptionally well for us. Things would be OK for a short time. Then I would forget to update a couple of purchases here and there, and all of a sudden we would be out of sync all over again.

The real drawback to most of the budgeting systems I tried was they required input on my part in order to stay up to date. I would need to hang on to receipts and remember to enter them at the end of the day. Without that input, the systems were ultimately useless. This step may not be an issue for many people. Some have spent most of their lives entering each purchase into a checkbook register and find this manual entry as a simple extension of that practice. Not me, though. I learned that there were a few requirements if a budget system was going to work for me.

Here are some of the features I was looking for:

• No manual-entry – This is the big one. The system needs to track my expenditures for me. Unfortunately, this wasn’t really an option with most budgeting tools until fairly recently.
• Near real-time tracking – I should be able to see new transactions on a daily basis.
• Mobile access – I need to know if I have money available when deciding on a purchase, no matter where I am.
• Track changes over time – Not really a need, but something that would be useful. I’d like to know if I’m making progress.

Out of all the methods I tried over the years, nothing has come close to:

Budget Tool: Mint.com

Mint.com is exactly what I needed. If you’ve struggled with other budgeting tools, I urge you to give Mint.com a shot. While you’ll still need to put some effort into managing your finances, Mint.com will automate a good portion of it for you.

Here’s how it works. You link all of your online accounts to your Mint account. This includes banks, credit cards, loans, etc. If the financial institution has a website that you can log in to, you’ll most likely be able to add it to Mint. Mint then collects information from your accounts on a regular basis, giving you up-to-date information about account balances, transactions and more. You can even have it send you email or SMS alerts for things such as low balance warnings or bill reminders.

Typically, when I suggest Mint to a friend, the first thing they ask is, “Is it safe?” Mint has been around for a few years now, and they’re owned by Intuit, makers of Quicken and TurboTax. Of course, these days, there is no 100% guarantee that any of your information is safe online, but I feel confident that they’re protecting my financial details as much as they can. None of your specific account information (passwords or account numbers) is displayed anywhere on your account page, so even if someone were to gain access to your Mint.com login, they wouldn’t gain any useful knowledge. They would, however, know that you spent way more on eating out than you had budgeted for the month.

While there are many things about Mint that I love and use on a regular basis – things that I will go into more detail about in future posts – it’s the budget tool that is most essential in managing your finances. Upon connecting to your accounts and downloading your account histories, Mint will automatically categorize many of your transactions for you. Unfortunately, you’ll need to do some manual clean-up, as it sometimes guesses categories incorrectly. On the plus side, you can tell Mint to automatically rename and categorize future transactions based on your changes, so you won’t have a ton of recurring work as you continue using it. Once everything is tidied up a little, a fun thing to do is check out the Trends tab. Here you can view different charts and graphs illustrating different aspects of your finances. Take a look at how much you spend on eating out. Go ahead, do it. It’s a lot more than you imagined it could be, right? One of the most important things Mint did for me, was help me realize exactly how much money we were wasting on things we didn’t need.

Once the shock of seeing your spending habits subsides, you can begin creating budgets to track your spending in different categories. You’ll want to start with your income budget, telling Mint how much you earn every month. After that, start creating budgets for recurring monthly expenses, such as rent, utilities, groceries, etc. I found it easiest to create one budget item for bills that are the same amount every month, and to make sure all my standard monthly bills are categorized under the “Bills & Utilities” umbrella. This cut down on the number of budget categories I’m forced to look at on a regular basis. Once the static items are out of the way, you’ll see how much left you have in your budget for irregular items, like eating out, entertainment, gas, and whatever else you need to budget for. As you’re creating these budgets, Mint will suggest amounts based on your history. Those are frequently inaccurate, since Mint doesn’t have much of your history to look at, and most likely need to be ignored for now. Lastly, you’ll want to create a budget for the “Everything Else” category. Initially, I tried to shoehorn all of our transactions into a handful of categories, which is not a great way to handle them. Create the “Everything Else” budget and all the expenditures that don’t fit in your other budgets will fall under there. As a tip, don’t stress too much about getting everything perfect. I’ve been using Mint for almost a year now, and I still tweak my budgets regularly.

After all is said and done, if you still have some scratch left over, I envy you. Also, you can use that extra money to create a Goal. I won’t go into much detail here, but simply put, you can create goals to save money, pay down debt, buy a car or really, anything you can think of. Mint will help you track the goal, show you different scenarios, give you a target date of completion and more. It’s pretty handy, although I’ve only used it for one goal so far.

One extremely helpful benefit of tracking your budgets with Mint is the fact that your spending is tracked, no matter how you spend it. Besides cash, any transaction, whether on a credit card, debit card or check, Mint knows about it. This is especially useful when using credit cards. As long as you’re paying attention to your budget, you don’t run the risk of spending more on your credit card than you should.

There are other useful features of Mint that will have to wait for future posts. If you’re anything like me, and struggled with budgets in the past, give Mint a chance. It may sound hyperbolic for me to say that Mint changed my life, but it’s true. It’s not perfect. There are issues here and there, and the company hasn’t been quick at releasing fixes, but the core features are solid enough. Start using it now, you’ll thank me later.

Check out their introduction video to see Mint in action.

Image: Arvind Balaraman / FreeDigitalPhotos.net