Before you can budget like a badass or dive deep into expense management you need to track and baseline your income, spending, credit score, and net worth. Even if that net worth is negative right now and your spending outpaces your income.
In the last couple of years I have gone from owing the IRS thousands along with $30k+ of credit card debt to a six-figure net worth and a big part of that was simply tracking where my money went so that I could form a better financial picture as well as budget and allocate accordingly. If you don’t know where your money is going, then you can’t efficiently make better decisions for your money.
Thankfully there are apps that will help you build a robust 360-picture of your finances. My favorites are Personal Capital and Mint and below I’ll tell you a little bit about how I differentiate my use of them and what I like from each of them. These applications will help you identify if you’re ready to save or invest as well as help you improve your financial situation whether you’re making $15 an hour or $150k a year.
Personal Capital –
I find this application best as a broad-stroke way to track progress. The net worth tracking may not be as relevant when you are in early stages of focusing your financials, but it does help over time to see the impact of your efforts.
- The easiest way to track your overall net worth. Once you have connected all of your accounts it clearly displays your total outstanding liabilities, your asset values (including real estate, brokerage, and bank accounts)
- You can add manual assets to your net worth calculation including cars, art, jewelry, and more, but you will have to track them over time manually
- Easy display of cash flow over the last 30 days, but this may or may not be relevant to your situation depending on your pay cycles (for example if you’re living off quarterly dividend payments)
- See available cash on hand (with Personal Capital‘s nudge to invest it) and track it over time
- Some accounts are not compatible with Personal Capital at this time and cannot be synced to track progress (such as one of my favorites – Acorns)
- Home values are pulled via a Zillow Zestimate, but depending on where you live a Zestimate may or may not provide an accurate reflection of your potential selling price (for example my hometown of Seattle sees sales far above Zestimate on average)
Everyone should have a Mint.com account. Mint gives you the most robust and actionable data on your financial trends for an every-day use while striving to optimize your finances.
- Mint gives you the ability to not just track, but make tactical decisions based on monthly trend data. Keep a spreadsheet of your budget categories each month and use it to understand not just where your money is going, but how that information changes over time. I have years worth of data here with Mint
- Mint is able to pull data from Acorns and while it sees investment accounts such as your 401k, brokerage, and Betterment accounts, it focuses on cash on hand as well as credit and loan balances.
- Mint provides you with a free credit score powered by TransUnion. This score is used to help you understand what is impacting your score (positive or negative) and how you can improve it as well as track changes over time.
- Mint incorporates free bill reminders and lets you note which of your accounts are setup for auto-pay.
- You can set easy to use goals for paying off credit cards or loans, saving for a car or house, or anything else. Mint will track your progress against those goals. I use this along with a dedicated savings account for future car purchases.
- Trend information isn’t just spending, you can see your income types over time, net income, asset values, debts, and net worth. Make sure you review your transactions at least monthly so that every transaction is recorded against the correct category.
- Mint also pulls home values via Zillow Zestimate. They were the first to do so, but suffer from the potential inaccuracy of the Zestimate like Personal Capital.
- Heavy advertising. Most of the “recommendations” from Mint are not personalized, they are simply paid advertising. Expect to see ads for credit cards and other financial services that you already have.
Personal Capital is an affiliate of the site. I may earn a commission from your sign up for the program. The commission for the sign up is how I can afford to have the blog, but Personal Capital is something that I have long personally used before beginning to blog about personal finance and their commission is not why I have chosen them here.
Acorns is not a formal affiliate of the site, but I have long been a client of their service. The links provided here are my personal referral link and I may earn a commission for your sign up. Their commission is not why I have chosen them here, I have chosen them because of my established use of the service.
Mint does not provide any incentive or commission for the links here.