How to Use a Personal Budget App to Save for Travel!

Creating a budget for yourself is a key step to being able to afford your dream vacation. Money is a huge barrier to entry for a lot of destinations. You think, “Maybe next year is the year I will take that vacation. I’ll go somewhere close right now and save”. Next year happens and perhaps you are paying off student debt or looking to buy a house and the vacation gets pushed off again. By budgeting out your expenses through a personal budget app, you can learn exactly where you are spending your money and where you can save for travel.

The search for a personal budget app:

Having a Finance and Accounting background, I searched for a budgeting tool that would meet my needs. On my bank statement there is a pie chart of how I have spent my money. I found this was never accurately depicting where my money went.

For one, I have multiple credit cards where I am paying for my expenses. I also split a lot of my expenses with my boyfriend so even though the money is the same in the end, how much I spend where wasn’t accurate.

And what if I prepaid an expense or wanted to accrue the expense over multiple months? For the non-accounting folks, I may have just lost you. What I mean is, what if I pay three months rent all at once but I want to reflect that amount over three months budget instead of just when the expense occurred?

I worked out an Accounting firm during college and the first thing I thought of was Quickbooks. The last thing I wanted to do was add the expense of Quickbooks to my monthly budget, it isn’t practical. Okay, maybe excel? That seemed really time consuming and manual.

Mint: the perfect personal budget app!

I did some online research and Quickbooks has a free personal budgeting app called Mint! I at once downloaded the app and it is able to capture all of my concerns for a budgeting app. The six best features I love about Mint are as follows:

1. You link all of your accounts: you can enter all of your checking, savings, credit card, and investment information. This means you get a dashboard of all of your income and expenses all in one place.
2. Activity shows up automatically: every line item on your bank statement shows up on the Mint app automatically. That means when you swipe your card at a gas station, as soon as that purchase is reflected on your bank account, it is also automatically updated in Mint. The app is linked to your bank account.
3. Categories: Mint automatically assigns categories to your income and expenses. If you do not agree with a category, you can change it! For instance, if you go to Costco and buy a couch, you can make sure you have it under the ‘Furniture’ category not ‘Groceries’.
4. You can split expenses between categories: this is the absolute best feature. Say you also bought $100 worth of groceries in that same Costco trip. You actually have the ability to go in that transaction and split the expense into different categories. You just have to tell it how much and what categories. Just like Quickbooks!
5. You can hide activity from your budget: This is a great feature for splitting expenses. If I paid for that Costco trip, but my boyfriend owes me half, I split the purchase with half into a hidden account and half in the categories I want the purchase in. Now my budget accurately reflects what I am spending my money on.
6. You can add expenses: say I had paid with cash or my boyfriend bought the Costco trip and I owe him half; I can add in transactions! You can create transactions from scratch and insert your own date, vendor, category, and amount. This makes the app extremely flexible.

These features make the app both user friendly and adaptable to your needs. It can take some fidgeting with, but in the end you will have accurate income and expenses. Normally, I check every two weeks at minimum to make sure I have covered all my bases on the app. Next, I add in any cash transactions or money I owe my boyfriend. I split expenses that my boyfriend is reimbursing me for. Finally, I double check the categories are displayed how I want. I don’t at the moment have any expenses that I have prepaid for or need to accrue, but because of the ability to add, split, and hide transactions, this would be easy to do. For instance, when I start paying for graduate school, I can use this feature to budget out paying for tuition each month.

So I have talked all about the income and expenses, but how does this help you budget and save for travel? Easy!

The budgeting feature is easy to use. You have a master list of categories that you can choose from and set a budget. If you have a history of transactions, you can set the budget to your average spend. You can set your budget  each month for rent or mortgage, utility, gas, food and alcohol, entertainment, etc. I suggest starting with your expenses that you must pay each month i.e. rent, food, etc. For utilities or gas try to pick an average number for each month and once the actual number comes through you can change the budgeted number.

Once you have set your budget for necessary expenses, you can subtract how much you must spend given how much income you take home each month. For instance, if you are making $3000 a month and your necessary expenses are $1500, you would have $1500 left over. You would then decide how much you need to save for your trip. This is where you will need to research and plan. If you know you want to take a $1000 trip in 2 months that means you need to save $500/month. Given my previous example, I would have $1000 left over for unnecessary expenses, or discretionary income if you will. This could be your items such as restaurants, bars, sports games, hobbies, etc. You do not need to spend this money but you would like to to have a life!

Once you set your end budget, you can keep an eye on it throughout the month. You can even sign up for email notifications when you are going over budget on a category or if you have unusually high spending. If you notice you are going over on one budget, you can take out of another budget or stop spending on discretionary items that month. For instance, if I am hitting my budget, I might not go to the bars that weekend in order to not go over my budget. Before I got Mint, I would never have realized where I could take back or spend more in certain areas. I probably would have spent money out and not realized that I was hindering my ability to save. I would just see my end result of cash and not know where that number came from.

A couple other cool features of Mint are some reporting features:

Cash Balances

Mint tells you your cash balance on all your cards, total credit debt, and worth of your investments.

Bills

You can add your upcoming bills so you know when you have to pay them.

Trends

You can see a pie chart of your monthly spending and click into the details. Then there are other ‘trends’. There is a graph of my spending and net income each month. I find this to be fascinating! I can see exactly how much I am spending each month which can be an eye-opener. It easy to see how much I am saving each month through my net income. My net income depicts how much more (or less) I made over what I spent.

Cash Flow

Finally, there is a cash flow. In your current month, you can see how much cash has came in and how much cash has came out of your accounts. This is essentially another way of showing you what you have earned vs. spent but it shows cash balances. You can click in further and see what merchants you have spent the most with and the amount of money you have spent in each category. For instance, my rent expense is always at the top of the list because it is the highest expense I have each month. The expense categories go in numerical order.

Final Thoughts

All in all, this personal budgeting app can  help you in your general life and I highly suggest everyone get this app if you do not already track your budget. Maybe its the nerdy Finance side of me, but I love this app. It is user friendly for those unfamiliar with how finances work. For those that are familiar with finances, there are extra capabilities that Mint has because they know exactly what you need! This app was made by Quickbooks i.e. people who know you and know your needs and I think that says something! Knowing your customer really creates the best end user experiences.

Specifically, this app can make travel possible!

As this is a travel blog, I will loop you back into why this is important for travel. Finances, budgeting, and travel all are branches off the same tree for those of us who do not have an unlimited cash stream. Money and travel are integrated. You cannot have a travel experience without thinking about the money which really sucks. I wish I could just take off on a vacation and not think about the more unpleasant side of travel. Unfortunately this is something you do have to pay attention to whether you travel for the occasional vacation or if travel is your full time job.

Mint keeps you accountable to make sure you reach your savings goal to make your dream vacation a reality. It can be even fun to check all of your trends and stats! I’m always so happy when I hit my savings goals! So set a budget. Decide your savings each month. Stick to your budget. Save. And then GO!!