Words: Vanessa Salvia
Photo: ipopba, erdikocak
Managing personal finances is never the easiest or most fun thing that a person does in their week. It’s definitely easier to budget when you get paid a known amount every two weeks. But for many self-employed masonry contractors, there is no such thing as a steady paycheck. There’s the complicating factor of getting paid when jobs come in, which may not be on a regular schedule, or when the jobs are completed, which may take longer than expected. If you own your own business and pay employees, you may not even know how much will be left for you once expenses are taken care of.
Successfully getting on a budget and sticking to it requires a combination of a few things: making budgeting a habit, finding a tool that works for you, and being consistent in using it. Managing a budget when your income is not steady takes a little more planning, which makes using apps or software all the more helpful.
It’s also helpful to know what your goals are. There are apps or software resources for everything. Do you need help paying bills on time? What about increasing the amount you’re saving each month? Do you need help figuring out how much you spend and on what categories? Whatever you need help with, there’s a tool for that. Below are some tools we recommend for putting together a budget and sticking to it.
Your bank’s budget tool
Many people don’t know this, but most banks or credit unions have built-in budgeting tools. This could be the easiest place to start, because you’re already logging into your bank and your transactions are already there, in one place. Check to see if your bank has a budget tool. Chances are, all you will have to do is customize your categories of spending and then categorize each transaction.
These budgets can show you long-term spending trends or charts which compare spending over categories, so you can see where your money is being spent. You can usually create custom alerts that will notify you when your spending is near or surpasses a set amount in each category, for instance, or when a bank account balance is lower than a set amount.
Mint.com is one of the most popular budgeting and bill-paying apps because it combines many useful tools in one place. Mint connects to almost any financial institution, and once you get it set up, it pulls your financial information from your accounts into the app. In addition to bank accounts, you can also connect credit cards and retirement accounts so everything appears on your dashboard.
Once you get the categories of spending created, Mint is smart enough to automatically categorize most transactions correctly. If there’s a large or suspicious transaction, Mint is also smart enough to recognize that and alert you. Mint has a robust bill pay and payment tracking system that reminds you when bills or credit card payments are due, so you can pay on time and avoid late fees. Better yet, you can pay all your bills from within Mint so you never have to log on to multiple sites to pay.
Mint is a robust service that is also free to use. They make their money by recommending financial services to you, or by charging a fee to access your credit report. If you’re annoyed by ads or “recommendations” for credit cards or other services, this is one aspect of Mint that you might not like.
You Need a Budget
While Mint does a little of everything, YNAB (as it’s popularly known) does budgeting only. Unlike Mint or other budgeting apps, which show you a pie chart of your spending at the end of the month, YNAB is set up so that you have to actively think about how you are spending your dollars. The user interface of YNAB was recently overhauled so it’s even easier to import and track expenses than it used to be; you no longer need to manually enter your transactions to make sure you’ve captured all of them.
YNAB uses color codes to quickly visualize information—yellow is underfunded, red is overspent. The Inspector tool allows you to see summary information about your budget, such as if you’ve budgeted enough for an upcoming expense or an unexpected expense or not. YNAB charges $11.99 per month or $84 per year, with the first 34 days free so you can test it out.
The Acorns app is a great way to save money in a way that is so easy you won’t even notice you’re doing it. The app lets you create spend-and-save savings accounts with connected debit cards or two different investment portfolio accounts: Acorns Invest, which allows you to invest spare change, or Acorns Later, an IRA retirement plan.
Acorns Invest rounds up every dollar you spend with debit cards on connected bank accounts and invests that in your Acorns account. For instance, if you spend $7.25 at the store, it rounds up to $8 and invests .75 cents into your account. You can also set roundups to be twice or three times as much, so if you wanted to you could invest $1.50 or $3.00 every time you spent that same $7.25. You also have the power to make an investment of a specific amount whenever you want to, or automatic investments on a schedule you choose, like $10 monthly or weekly.
The app takes the roundups out of your account so unobtrusively that you’ll never even know the money’s not there. By the end of the year, you could end up with a nice nest egg, depending on how much you spend and how you set up the roundups. Acorns costs $1 a month for the roundup account, or $3 a month for the roundup, retirement account, and checking account. A $5 family plan is also available.
Other investment apps, like Digit, track your spending and take out money when its algorithm senses that you have the money to spare. It will automatically transfer money from your checking account to your Digit account and only move money when you can afford it. For me, this doesn’t work well because the amount of money in my accounts can vary greatly from week to week. I want to be able to have more control over when the money is taken out and how much, so Acorn works better in that sense. If you want something automated that takes money based on your spending patterns, give something like Digit a try. It costs $5 a month, so be sure you’re saving more than that to make it worthwhile.