Mint.com is good…but you can make it great
Mint.com is a good personal finance tool. It can connect to all of your accounts and collect all of your income and expenses in one place. It even does a pretty good job at guessing types of expenses and income based on the descriptions provided by the banks.
I have a manual version of mint.com that I use to prove to myself that I am truly balancing my transactions, but let me tell you, that takes a lot of my time. I happen to enjoy making spreadsheets but I know that most of you just want something automatic, and why wouldn’t you?
Here’s the thing:
Mint.com is good but it’s not perfect. There are a handful of things that mint.com either doesn’t know or doesn’t do well that can make it a not so great tool, and really mess up your tracking. The biggest misconception is that mint.com is more than just a piece of software.
It just reads the output from the banks, and searches for a match in the general database or your custom database and hopes for the best. Then it organizes everything all nice and neat like.
But mint.com can’t know something it doesn’t know.
Let’s start with the big one:
MISSING OR DUPLICATE TRANSACTIONS
This is a big one because it’s hard to spot unless you’re looking for it. Mint.com’s biggest trick is that it makes you think your accounts are balanced. This is not necessarily true.
I did a little experiment.
I refreshed my accounts and mint.com showed me the balances. The account balances matched my bank account balances on the bank website, so I would assume that the only way that mint.com could get to the same balance, would be if it also downloaded all of the same transactions from my bank, and added them together to get to the same total.
Mint.com simply pulls the display balance from your bank’s current balance.
How do I know this?
Well, mint.com has a nifty transaction export feature. I exported all 400+ transactions to a .csv file and opened it in Excel. I assigned a formula to split out the debits and credits and then manually added them up to try to match the mint.com balance.
The result was unfortunate. The transactions in mint.com didn’t add up to the account balance in mint.com.
This is because the transactions and the balance are not connected at all…
I like to carry cash, but lately I try not to spend it unless I have to.
Because it’s harder to track and something always gets missed.
If I spend $200 in cash in a month, there’s a pretty good chance I’ll forget to grab a receipt for something and I’ll be out of balance.
If I spend $200 on my credit card(then pay it off immediately, of course), I have a detailed list of transactions by vendor, so I don’t even need to look at the receipts to figure out what I bought. And on top of that, if it’s a common transaction, mint.com probably already knows what it is so I don’t have to do anything.
Mint.com looks at your bank account and sees “cash withdrawal” and then shuts down. There is no way mint.com has any idea what that cash was for.
You have to tell it what you spent your cash on, or every month you’re going to be understating your spending by $200-$500 or however much cash you like to spend, wherever you spend it.
My wife and I have separate bank accounts but when either of us spend money on something for both of us, that receipt goes into the shared spending box. We split all those receipts down the middle so that our individual expenses are not overstated.
It usually evens out overall on a monthly basis since we take turns, but we don’t take turns spending on the same things. She may pay for a bunch of restaurants in a month, and I may pay for the groceries in a month. She might put our airline tickets on her credit card and I’ll pay for the internet.
Bottom line is that though it evens out, the categories are all off. Mint.com assumes that if something is in your bank account, you spend it on yourself.
If you’re at a restaurant and you pick up the $150 tab and everyone else gives you $120 in cash, that’s a dangerous thing from a budgeting perspective. Cause here’s what’s going to happen: mint.com is going to think you just spent $150 on restaurants, and now you have $120 in untracked cash floating around that you may decide to spend on TTC tokens or taxis or groceries or a entry fee to the coin show. You just missed all that tracking and in 6 months when you’re trying to figure out your average monthly spend you’re going to be like “holy I spend a lot on restaurants and apparently I never buy tokens”. That’s no way to live, I tells ya.
Right now, if you ask mint.com, it will tell you that I spend $0 monthly on Internet. This is because my wife pays for the internet once a year, and the only way mint.com can track this is for me is if I manually enter the transaction. But I’m not going to just take half of the total annual spend and put it in the month it was purchased. This is for a whole year of internet. Budgeting is a monthly thing, just like you pay your rent every month and you get paid every two weeks. We want to put things in the right place so that you can manage your cash flow and come up with how much you have left over every month for investing.
Same concept applies to rent, or any other expense that has a fluctuating payment date. If you pay your rent on May 1st for May and then on May 31st for June, mint.com is going to show you have paid double rent for May and nothing for June. You have to look out for the prepaid transactions and move them accordingly to paint the true picture and create usable reporting in mint.com.
Now this one is no one’s fault, really, but mostly a flaw in the overall banking system.
Bank transaction descriptions are terrible. Here are my favourites:
“Thank You” – the description for my Tangerine credit card payment
“Eft Admin By” – the description for a reimbursement by Great West Life for dental coverage
“Inter Act” – the description for an email money transfer
And the winner: “Interac Burger Burger” – the description for the Burger’s Priest restaurant
Mint.com is only as good as the information it is given. “Inter Act” doesn’t mean a thing to anyone. The only way I’m going to be able to put that in the right category is to go to my bank’s website, look up the email money transfer and figure out what it is myself.
And be careful because if you teach mint.com that all “Inter Act” transactions should be classified as Membership Fees and the next “Inter Act” you do is for Website Renewal, mint.com is going to put your website costs into membership fees. Because it’s smart that way and tries to help. Like a broken robot, trying to feed the dog, not realizing the dog is a cat.
As you can see, mint.com cannot be left alone unsupervised. In future posts, I will explore these mint.com issues in further detail and provide tips on how to make mint.com into a tool to help rather than confuse. A tool that will help you to invest wisely.