One of the ways I keep my budget simple is by not having too many categories.
When we first started out, we had categories for groceries, snacks & restaurant food, toiletries, household cleaners, pet supplies, etc. etc. I realized after several months that all these categories made my accounting a nightmare.
I’d go to Target, for example, and buy bananas, English muffins, cat food and laundry detergent. Then I’d have to split up that receipt three ways and figure out the tax on each item separately. When I was trying (and failing) to use cash, I’d be standing there at the check-out, hemming and hawing over which envelope to take the money from.
That’s why I decided to simply combine all these expenses under one category.
I call it “Groceries” but really it’s all the things I would normally purchase at Target, Walmart, Costco, the drug stores or the grocery stores. And if we happen to buy a bottle of water and a bag of chips while we’re out running errands, I throw those expenses into that category as well.
Now when I go to Target, it’s very rare that I have to divide up my receipt at all. Whether I’m buying baby wipes, nail polish remover or breakfast cereal, it all gets called “Groceries”.
There are, of course, exceptions.
Let’s say I go to Target and buy mostly personal care items and food, but I also get an outfit for my daughter. That isn’t “groceries”, so I need to account for it in the right category.
If you’re tracking your spending manually, you will need to handle this on your own. With Mint.com, however, there is a quick and easy way to do this!
1. Log into your Mint.com account.
2. Click on Transactions (remember, I do this regularly to make sure my expenses are being categorized the way I want them to be)
3. Click on the expense you want to split. For example – on July 10th, I spent $17.78 at Costco. I got a pack of socks for my husband for $10 and then two clam shells of mixed green lettuce. I need to divide this into grocery and clothing.
4. Click on the Split box (top right) and a new window will pop up over the transaction. Since I’ve set a rule with Mint.com (learn how to do that HERE) that all Costco purchases are to be named Groceries, it automically categorized it that way for me. Now I need to split out the $10.80 for the socks. (This includes tax – You can manually calculate the amount of tax, but I usually just estimate.)
5. Leave the Merchant the same, but under category, select “Clothing”. Then under the amount, type in $10.80 (or whatever your amount is). Click the Split button and then click I’m Done.
6. Mint.com automatically splits the bill in your transaction report – so you’re all done. If you routinely check your transactions (I log into my account two or three times a week), you probably won’t even need to save receipts, since your shopping trips will be fresh in your mind.
Take-Aways from Tutorial #3:
- Make your life easier by limiting the number of categories in your budget.
- When you do need to account for multiple categories in a single shopping trip, use the “Split Expenses” function on Mint.com.
Next up in this tutorial series will be using the Budget feature of Mint.com!
Are you also a minimalist when it comes to your budget categories? Have you utilized the Split feature on Mint.com before?