After working as a CFP helping individuals reach their financial goals for over 14 years now, I have come to learn that the more reminders you can have to track your progress toward your goals makes all the difference. Hence this new goal feature in the Mint iOS app, is what I like to call “Lit!”
The reason I find this new goal feature in Mint iOS to be a game changer is that so often people state arbitrary goals like I want to pay off my debt, or save money, but fail to take the next steps of determining how much they need to allocate every month to reach that goal and then track their progress month after month to make the course corrections as needed.
That is why I am so excited to see Mint take their budgeting app one step further by adding the Goal feature to help users create realistic financial goals and add the goals into their budget.
Let’s dive into how you can make this new feature work for you and make 2020 the year you reach your financial goals and have fun while doing so.
Set up your budget in the Mint app and connect your accounts so you can track your actual spending against the budget you created for yourself. Keep the 50/20/30 rule of budget in mind as you do so. This rule of thumb for allocating your net income every month (50 percent for fixed expenses, 20 percent for savings and 30 percent for fun/variable expenses) allows you to use this benchmark as a starting point to see how your budget breaks down. While this is just a starting guide, it does help you sort through your fixed, saving, and variable spending to determine what will work for you. Even if you cannot save the full 20 percent of your net income, you can at least use it as a goal and start by saving even 1 percent toward the goals you will set up for yourself.
Create your first goal. For example, let’s say your goal is to Take a trip. So you would select that one from the list of goals.
If you have a goal that is not listed, like “Start a business,” then you can select “Something else” from the line up and create your goal from there.
Next, you want to make your goal personal by naming it something you feel excited about. In this example, we got very specific and called it “Miami Vacation.” I have found that after years of working with people on their financial goals, the more personal they made them and named them in their tracking systems, the more connected they were to the goal and excited to do the work to actually reach it. So name your goal something that lights you up inside!
Next you will enter how much you need to reach your goal and the ideal date you want to reach your goal. For example, you can write $2,000 for your Miami vacation by August 2021.
Once you do that, you will then select the account you want to save the money into. This is something you can review with your CFP but typically if you are saving for short term goals of five years or less, you would use a high yield savings account. So make sure you have the right account to select for the goal you are saving for linked to your Mint account.
Once you list your goal and the amount you need to reach your goal, you will then be taken to a page where you can play with the funding levels to determine when you can reach this goal. I personally love this approach of starting with the funding level, because it feels more realistic based on how much you can save every month (Step 1) from your budget.
For example, if you decide you can save $105 per month toward this goal, then you will be able to take your vacation by August 2021. But maybe you want to go sooner, so then you can see if you adjust it to save $125 per month, you will be able to take a vacation in April 2021. With this tool, you can decide how aggressive you want to save for this trip (goal) and what you are willing or not willing to do to make it happen.
I think this puts you back in the driver’s seat of your money and can motivate you to either make more money or cut back spending in other areas so you can save the amount needed to reach your goal in the timeframe that is most ideal for you.
The next step is to select the amount you can save for your goal.
Now that your goal is selected, you will be able to track your progress toward that goal on the homepage. I LOVE this feature because it reminds you on the daily (or whenever you log into your Mint account) where you stand in relation to your goal. I think tracking your progress toward the goal is the difference between actually reaching the goal or letting another year go by without anything changing in your financial life. You can also use this as a way to motivate you to save more toward your goal by cutting back on other spending or finding new ways to make more money.
Keep going! The app will also show charts on how much you have saved or increases/decreases in your savings so use this as a way to keep doing what you need to reach your goals. If you notice your savings amount decreased, ask yourself why. Did you stop your savings plan? Or decrease the amount due to cash flow issues? By reviewing often and using the tools in the app, you can really change your behaviors with money to work for you not against you.
By leveraging technology like the new goal feature in Mint iOS, you save your energy that would otherwise be wasted trying to figure it out every month. And then you can use that new energy toward making more money or enjoying your life and appreciating all you are able to do with your money. And that is what I call living a financially wise life.
What are your financial goals this year? Share your goals with us in the comments!