Long story short: I got a new, better-paying job and I had tactile feedback as to where our money was going. The result was a massive reduction in debt over the course of the following year.

Since then I’ve deleted my Mint.com account entirely.

Simply put, Mint fell on its face in a huge way. Living off of one income while we raise our amazing son, the idea of budgeting and knowing where our finances are is critical these days. Possibly due to its explosive user base growth or some banks’ competing technology, I found myself spending increasingly-frustrating amounts of time reconciling my supposedly-automated Mint account updates or waiting for temporary connection issues to fix themselves. The final straw came when I started documenting transactions that I had categorized reverting to other categories over the course of a few days. Reporting these to Mint support, with screen shots, resulted in… nothing. No feedback or even replies.

And yes, it’s entirely acceptable to complain about a free service – one that I had entrusted my financial information to and which used my financial profile to market services to me.

I’ve since turned to You Need a Budget (YNAB) – software that I’ve paid full price for desktop and iPhone clients. While some might see YNAB as having a steep learning curve or being too labor-intensive (every transaction is entered manually) it’s making a tremendous amount of sense to me. Mint was great – when it worked – in helping me to watch the overall trends of our debt going down, but where it failed me completely was in its budgeting tools. As soon as Mint started changing the categorization of my transactions my budgets became meaningless. We simply don’t have enough money to not assign each dollar a job (yeah, I can speak the YNAB speak) while still trying to pay down debt. YNAB has been great – the iPhone client is awesome in that it allows me to just enter transactions anywhere, then sync up and balance our checkbook when at home. There’s less fear on my part knowing that no one will be updating those accounts other than me – Mint’s automatic updates destroyed my trust in their service.

For now I feel like I’ve started over – I only have three months of budgeting under my belt, and it feels like I’m trying to budget during the most financially unpredictable time of the year. But I strongly believe YNAB is one of maybe two or three personal finance tools out there that’s worth the time and effort you put into it, and will help us mature financially in the years to come.

Web service fave of mine Mint.com just released a pretty nifty update this morning in the form of Goals – although there is a curious lack of that news on the update blog at mint.com. As I’ve mentioned before, I’m a huge fan of Mint – I would go so far as to say that I’ve never really gotten more control over my finances until I surrendered them to a service like Mint, which tracks our finances automagically and cleanly. I definitely know I’ve gained more ground on expenses and trimming the fat over the last year as a direct result. Well, Mint.com just quietly gave me one more, very important dashboard item to help get more enjoyable control of where our money’s going: Goals.

With Mint.com Goals, the free service steps beyond budgeting and automatically ties in long-term goals – such as debt reduction, saving for a home or college, even taking a trip or buying a car. For example, Mint will take all of your current credit card balances and rates, your minimum payments, and ask you what more you can throw at a monthly payment plan to get that debt paid down. Move the slider to the right (aka: “I can throw some benjis at this debt, yo”) and you’ll instantly see the amount of interest paid and the date that you’ll be debt-free adjust. It’s like some sort of game – with the odds tilted in your favor.

Granted, Mint.com makes it’s money through referrals – expect to see offers for lower-interest credit cards politely suggested to you when you set up a credit debt reduction goal, for example. But something just clicked in my head when I saw that date show up for the goal I set to reduce debt, a renewed motivation to get ‘er done and keep plugging away.

And have I mentioned that the service is free?

EDIT: for an update on how I feel about Mint.com these days, please see this post.

I’ll freely admit that I suck with money: I spend it if I’ve got it, I can’t keep track of it very well, and budgeting is… well… one of those things I’ve never learned. For the last 10 years or so I’ve been an avid Quicken user, using it much like a high-powered check register: I’d enter every single transaction, and as those cleared the bank I would reconcile them in Quicken. With the advent and proliferation of debit cards and my preference to use cash less and less, the amount of transactions I was entering and reconciling was in the thousands per year. That’s a lot of work, and for very little gain it turns out.

Enter the full maturity of Mint.com. After seeing several write-ups and reviews on several websites I respect such as Lifehacker.com, I decided to sign up and give Mint a whirl. I was somewhat blown away at how easily and quickly – and more importantly, accurately – Mint enabled me to set up my online accounts. The mechanism for doing this is fairly simple: you enter the URL of your account (such as www.bankofamerica.com) and your web access login information. Using industry-standard protocols and encrypted connections, Mint then just hoovers in your transactions and any other identifiable particulars about your accounts – like the interest rate of one of my credit cards (this becomes important later). Once this information is in your Mint.com account, the real magic begins.

Budgeting is automatic, which is huge for me. Mint will fairly accurately categorize your transactions into fairly basic groups like groceries, utilities, fast food, auto service, etc. It will then start setting up some budgets for you as it learns your spending habits. Want to save more money? Slide the “Restaurants” bar to the left and then just make a conscious decision not to eat out tonight. Sounds simple, right? But just not something that hit my brain until something as easy to use as Mint came along. Mint will also allow you to connect your mortgage account, compare it with CyberHomes.com‘s quick appraisal of your property value, and tell you how underwater you are – neat, huh?

Mint.com alerts

You can also get alerts on almost everything – and this is where I agree with Gina Trapani’s assessment of why she feels more secure from identity or account theft when using Mint’s alerting features. I could try and set up alerts on all of my accounts individually to alert me to things like major credit card purchases or cash account items clearing, but having all of those transactions land in one spot allows me to quickly check on the overall status of my financial ruin life. And as Mint.com reiterates, this is all read-only stuff – you can’t move money around using a compromised Mint.com account. I think for me, the final go-ahead was the announcement that Intuit – the maker of my beloved Quicken software for all these years – has acquired Mint.com. Goodbye Quicken, my old friend. Hello Mint iPhone app.

Ways to Save

The way that Mint makes money is by referring you to other financial organizations in a very clever way – they take a look at your current interest rates on credit cards, fees you pay on checking accounts or brokerages, and will automatically pull up offers that might save you money over the long run. For example, switching to a lower-rate credit card could save you interest payments, or switching to a different bank could save you transaction or ATM fees. They’ve also recently added auto insurance comparisons for more options. If you apply for those cards through Mint.com, they get a referral – keeping the service free for your use.

Finally, the downsides: not all of my accounts were recognized. For example, I can access my checking, savings, and credit card accounts from my Credit Union‘s login – yet Mint only found my checking and savings. There’s no manual way to import that third Visa account so it’s effectively not tracked. Same for my wife’s car loan and our HELOC from another bank. But as more and more kinks get worked out I would expect these items to become available/tracked.

As a completely free service – the web version and the iPhone version which is incredibly polished and robust as well – Mint.com is somewhat of a game-changer for me. I’ve uninstalled Quicken, archived my increasingly-out-of-date data files, and put my trust in at least a little chunk of the cloud.

Some other Mint.com-related links:

• Why I Stopped Being Paranoid and Started Using Mint
• Mint.com blog
• PCMag review of Mint.com