[00:00:00] Speaker A: A website that has been beloved by financial nerds like myself for over a decade, recently announced that they are closing its doors. In this episode, we talk about why that's a big deal for your finances. Let's get started.
[00:00:11] Speaker B: Let's get some money from new money new problems. It's the new Money New Problems podcast, a show for successful professionals searching for the tools they need to navigate financial opportunities and obstacles they've never seen.
Negotiating compensation, purchasing your first investment property. Helping your family with money. The highs and lows of, uh, entrepreneurship. New money brings new problems that require new solutions. Join us as we work through them together.
I'm Brenton Harrison, and this is the new money New Problems podcast.
[00:00:49] Speaker A: Hello. My name is Brenton Harrison of New Money new problems and your host for the new Money New Problems podcast. As last week was a replay episode of something that was originally launched on our escape student loan debt platform, this is technically the first time you're hearing me anew in the year 2024. So happy new year to you. And I wanted to, as we got started and for the remainder of January, talk about goals and positioning, the time of year where you are doing your fitness resolutions. Uh, and many people are doing money resolutions. So we wanted to make sure we're doing our part this month to have your mind, your body, and your wallet well positioned to have some success in 2024. Along those lines, we're going to have this be one of our what's in the news segments, because there happens to also be a story in the news that is relevant to the positioning of those finances for success. And that news story is the impending closingofment. Uh.com. If you're following along with us on screen, you can see the homepage for Mint. This is a site that's been around since 2009, and it was one of the original data aggregating and financial tracking websites that was out there, uh, in the social media and financial space. By data aggregator, I mean that you can plug all types of accounts into Mint.com, your checking account, your saving account, your student loans, your cards, and you can't make any changes from Mint.com. It just aggregates the data, but allows you to see a snapshot of your finances all in one place. I can see my net worth. I can see the balance of my assets, the balance of my liabilities. And while that has some value in making sure that you're trending in the right direction, the bigger value for Mint has been the ability to monitor and categorize transactions. It is most popular as a budgeting software. There have since been a number of competitors that, uh, have come into the space. But the ability to say, I'm going to tag this as shopping, I'm going to tag this as a household expense, and then at the end of the month, be able to see what I spent in each category was really like the democratization of finances. It was bringing what, uh, was a typical type of service that was set aside for businesses, be there, large or small, and taking that type of accounting and categorization to the personal finance space. And as such, it was a really big deal. Well, they recently announced that they, being owned by the larger company intuit, have decided to close their doors. They're closing on March 23 of, uh, 2024. And they are actually encouraging their current users to switch over to credit. Karma, which has some of the features of, uh, Mint.com is owned by the same company, but does not have as robust of a budgeting platform. And you're starting to see all types of articles pop up in the financial media space. If you're looking online, you're seeing one that says, mint app closing, what it means, how to pick a new budget service. Um, there's another that we're going to review after the break, says seven Mint alternatives. When the budgeting app goes away this year, they're all over. And since your phone listens to you, you're definitely going to start seeing ads for some of these services on your Instagram or your Facebook. But what I wanted to do before the break is tell you why, in my opinion, services like Mint are helpful in the first place, and why if you use mint now, you do need to make sure that you find an alternative. And if you don't use any type of software or website to track your finances as you talk about financial resolutions, I'm a big fan in believing that systems beat discipline and motivation. So you may say that you want to be good at budgeting now, you may be motivated to sit down every single week and see what you spent. But having a system that will do it for you is, to me, more beneficial. And we want to talk about why. To me, one of the larger benefits that you have when you're talking about the benefits of, uh, a tracking software or a tracking website like Mint.com or one of its competitors is what I referenced before. When it comes to small business style accounting, having a profit and loss statement, being able to know what you spent in each category, and being able to categorize it when it comes to the availability to deduct certain things, when it comes to your tax planning. So let's go through, uh, a recap of some of the ways that you are impacted by taxes and how the decision to take either the standard deduction or the itemized deduction can make a tracking website even more valuable. If you're looking on screen, we're looking at two different scenarios. On the left, we have a person who is a single individual who earns $100,000 in total income and takes the standard deduction. On the right, we have another individual who earns the same $100,000 but chooses to itemize. And let's walk through what that means as a recap. At $100,000 of total income, you'd be tempted to believe that that's what is used to calculate the taxes that you pay each year. But we have covered that. There are several mechanisms that you can use to lower the income on which you pay taxes. One of those mechanisms, which is available to any taxpayer, regardless of how they file, is what's called above the line tax deductions. These are things like the amount of money that you put into your pretax retirement account, like an IRa A. It's also things like the contributions you make to a health savings account, a flex spending account, a dependent flex spending account for an entrepreneur. Half of the employment taxes that you pay are also above the line deductions, which can lower your taxable income. In the example, actually on the right and the left, uh, that you're looking at on screen, which I'll describe if you're listening, we have above the line deductions in both scenarios, uh, of $10,000. So we started at 100. We used $10,000 of above the line deductions to reduce our taxable income down to $90,000. Now, this first layer, after you've taken away those above the line deductions, you have come to your adjusted gross income. Adjusted gross income is a very important term, because in many scenarios, it will dictate whether you can contribute to certain financial accounts, whether you can deduct that contribution, whether you have to pay extra taxes on things like investment earnings. So adjusted gross income is also a big deal. But once you've reached your adjusted gross income, there is still yet another mechanism that can lower that taxable income even further. The mechanism that you use, however, depends on whether or not you choose to take the standard deduction or whether you choose to itemize your own deductions instead. So, on the left, in our example, the person who started out at $100,000 of total income, then used $10,000 of above the line tax deductions, has an adjusted gross income of $90,000, and they choose to use the standard deduction to lower their taxable income even further, down to $76,150. Now, on the right, we have a person who also earns $100,000, also used $10,000 of above the line deductions, and lowered that adjusted gross income to $90,000. But we're going to assume that instead of using the standard deduction, they have things that they did in their own financial life that exceeded the amount that they had available with that $13,850. So, in our example, we're going to assume they have $20,000 of deductions on their own. So rather than using the standard amount they itemize, they list out on their tax return all of the things that can lower their taxable income. And instead of 76,150, they're able to use those 20,000 of deductions to bring their taxable income down to $70,000. Even now, how does this come into play with a service like mint.com? Well, for many of us, uh, as we go throughout the year making all different types of transactions, there are certain things that we could use to itemize our taxes that are hard to keep up with. For example, if you have a certain amount of medical expenses in a given year, you can use those medical expenses as an itemized item on your tax return, as a tax deduction. Charitable contributions are another area that you can use to lower that taxable income as an itemized deduction. But all of those things throughout the course of twelve months can be hard to keep up with on your own. If you make some $50 contribution to a nonprofit around the corner because they're doing some type of fundraising drive, it can be hard to keep up with that, just like it can be hard to keep up with whether or not you spent, uh, a copay or paid 200, $300 because your kid had to go to the emergency room. All of that can be tough to manage when you have tracking software like a mint or a monarch money or a pocket guard, things that we'll talk about after the break. It makes it infinitely easier to see all of your transactions in one place, categorize them, and make sure that you've checked them off to know that they will potentially be able to be used as an itemized deduction. And it makes it easier to make sure that you're getting the most juice out of the squeeze as possible. The second reason that I think websites that track your finances are so helpful has to do with the budgeting component itself. Uh, I referenced this at the beginning of the episode. How convenient it is to be able to have some accountability that overrides your discipline and your motivation. Because I can tell you that as you get busier, it really doesn't matter how disciplined or motivated you may be. The fact of the matter is, we have limited time in the day to do things like go through every single transaction in the previous week to figure out exactly how much we spent on eating out versus what we spent by going to the grocery store. It's, uh, just difficult to do the busier you become. One of the features that I love about these types of websites is that in addition to being able to see the transactions, you can set budgets and budget alerts. So, for example, if you said that you wanted to make sure you didn't spend more than $100 a week eating out, you can say, okay, $100 a week. That's $400 to $500 a month. I'm going to set a monthly budget. And since this website is tracking my spending across all of my accounts instead of just a checking account or just a credit card, the second that the total spending towards that amount exceeds my allocated budget, I'm going to get a text or an email. If there are two people on the account, we'll both get a text or an email. And it's just that little bit of oversight that you need to change your behavior. Now, do I think that if you overspent your food budget for the month on the 15th, that you're just not going to eat for the remaining two weeks? Absolutely not. But you'd be surprised how helpful it can be if you decided that you're going to spend x amount of dollars on shopping. How getting that notification telling you that you've already exceeded that category can be the difference between you making three extra purchases that month versus one extra purchase, which is still above the budget, but is manageable as it pertains to getting back on the good foot and staying on the good foot throughout, uh, the course of 2024. So, as I said at the beginning, if you are using mint, it's important that you find a replacement for mint. If you're not using mint or a similar service, it's important that you find some type of service that you can start tracking your finances in the second half. We'll tell you about some available alternatives so you can find the right fit for you moving forward.
[00:11:46] Speaker C: This is the new Money New Problems podcast, a show for successful professionals searching for the tools they need to navigate financial opportunities and obstacles they've never seen. We'll be right back.
[00:12:04] Speaker B: Are you wondering what new money problems you might be overlooking in your financial life? If so, we've got great news.
We've crafted the new money new problems gap finder to identify potential weaknesses in your finances in areas ranging from budgeting, investments, insurance, and even the threat your extended family's finances could pose to your household. Please head to newmoneynewms.com gapfinder to complete it today. Again, that's newmoneynewproblems.com gapfinder to take the assessment.
[00:12:43] Speaker C: You'Re listening to the new Money New Problems podcast. Subscribe
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[00:12:54] Speaker A: Before the break, we talked about the importance of finding either a replacement or an initial site that you can use to track your finances. If you're following along with us on screen and we'll put a link to this article in the show notes, you're looking at one that says, uh, seven mint alternatives when the budgeting app goes away. We will also link a couple of other articles so you can see the reviews from multiple sites. And it goes through this article and for each of these different recommendations, it tells you the different paid or free versions that are available and some of the items that make it, uh, a good option compared to what you have with Mint. As an example, with Pocketguard, it reads. In summary, like Mint, Pocketguard offers a free version to help you access some basic budgeting features like spending pie charts and bill tracking. If you want more valuable insights to enhance your money management, the fee based options include debt payoff plans, unlimited saving goals, and longer transaction histories. However, the app's confusing maze of pricing tiers is a major drawback for the paid versions. PocketGuard is actively courting mint users with a feature that lets you upload your exported data from Mint and automatically sync with its service. This is something we haven't discussed, but because these sites know that there's a huge amount of people out there who use Mint, they are offering an onboarding platform where in many cases, if they have paid versions, they're giving you a discount or a period where you can switch for free. And they're also giving you the option of transferring your data through a dedicated portal just for Mint users. We won't go through all these sites, but one of the ones that I know offers this transition is Monarch money. This was actually created by one of the people who was instrumental in the start of mint, you can see. In summary, it says Monarch is working hard to attract mint users by offering a 50% discount for your first year of membership plus a 30 day free trial. The app offers helpful shared savings goals for couples and emails, a monthly report to each user compared to the other couple friendly apps like Honeydew. Monarch is doing more specifically for mint users, with helpful guidance to simplify the transition. There are all different features that each of these sites are going to have and kind of hang their banner on. If you've seen commercials for Rocket money, rocket money advertises themselves as the site that can automatically detect your automated subscriptions that are coming out of your account and you can cancel them directly on the app. They're each going to have their own thing, and we'll put multiple articles so that you can see the different alternatives that are available. But you want to make sure you go through the process of asking yourself your goals, what are the behaviors that you're trying to avoid or improve upon, and whether this possible alternative not only fits your budget because many of them cost as mint did not, but also whether it's something where the features match up with what you're looking for. So I hope this was helpful. This is going to be the first in a month long series, or what we have left of the month, uh, of getting you in position again, that your mind, body and wallet are well positioned for success in 2024. Next week, we'll be talking a little bit about your health goals and how they can be of help or a detriment to your finances as well. And to help us along the way, we have a special guest that's going to share a bit of their money story that I think you will be a fan of.
[00:16:01] Speaker B: I'll see you next week from new money new problems. This was the new Money New Problems podcast, a show for successful professionals searching for the tools they need to navigate financial opportunities and obstacles they have never seen.
