Mint site not same as a sound budget

SEATTLE -- Confession: I've never balanced a checkbook or devised a realistic budget. I'm too impatient to follow through with manual record-keeping when all the transactions are digital.

So while I always had a general sense of my bank balance, I didn't actually know if I was spending more than I made in a month. And that made me nervous.

A few months ago, I started using Mint.com, a free Web site that tracks what I spend and where, so I don't have to scribble a note or remember to file the receipt. It categorizes my transactions and spits out candy-colored pie charts that help me to see when I'm buying too many shoes.

Unlike the drag of checkbook balancing, I found Mint fun to use, and much prettier than the online version of its big-name competitor, Quicken. But I learned that seeing where my money goes is only one step toward improving my personal-finance prowess.

Signing up for Mint, which launched in "beta" test mode last September, only required my e-mail address, zip code and password. I told Mint where I bank and what kinds of credit cards I have. The site didn't ask for account numbers, just the same login information I use when I check my balance or pay bills online.

Mint says it has bank-quality data security and uses the same type of encryption banks do and its site has been audited by groups that ensure security including VeriSign Inc. and McAfee Inc.'s HackerSafe.

In minutes, Mint connected to my four accounts and presented me with a long list of recent transactions and current balances. It updates every night, so except for outstanding checks, my checkbook balances itself daily.

The site does its best to categorize my purchases by comparing information from the bank or credit card company with a database of business names.

That works about 85 percent of the time, Mint says. This weekend I bought garden plants at the nursery, but Mint's best guess was "groceries." It was easy to swap categories; it was harder to decide which of Mint's preset categories to choose. I settled on "home improvement," because there's no way to make my own "gardening" category.

When I first started, I spent a lot of time combing through the list of transactions and fixing categories. Sometimes a store name showed up as a mess of abbreviations and numbers, when Mint fails to translate credit card mumbo-jumbo into English.

When I change categories or store names, there's always an option to handle similar transactions the same way in the future. But I still find myself having to fix at least one every time I log in.

The first time I clicked the "trends" tab I worried it might reveal some unpleasant, data-driven truth about my shopping habits.

In fact, my spending wasn't too lopsided. Big chunks of the pie went to rent, utilities and other home expenses, and to shopping and groceries. I wasn't spoiling the dog as much as I feared.

I could zoom in on pieces of the pie chart to see subcategories, and zip between the pie chart and the underlying transactions.

It was fun, and I hadn't even started playing with the bells and whistles, like comparing my spending on gas or rent with that of my peers across the country. Mint is also testing a section that tracks investments, but it wasn't live when I signed up.

At some point, though, I realized I wasn't much closer to financial discipline than when I started. I could see in vivid color where my money was going, but I couldn't really tell if I was spending too much. Clearly, I needed a budget.

Above last month's pie chart, in small type, was a total. A big total. Maybe bigger than the sum of my two paychecks, but I couldn't find an easy way to check. Mint's overview page gives a sense of my current ratio of cash to debt today, but that wasn't exactly what I needed.

When I logged on to Intuit Inc.'s Quicken Online, a similar site that costs $2.99 per month to access, it was impossible to miss the big, bold "Am I living within my means?" graphic comparing money in with money out in the last 30 days. (Short answer: Not quite.)

I didn't spend a lot of time on the Quicken site, because Mint is free and I prefer its design. Mint also lets me set budget amounts for different categories for the month, then track my spending against the targets, a feature that isn't available for Quicken Online.

Turns out, budgeting is still hard work. The site suggested some ballpark figures based on my recent spending habits, but that doesn't mean I should actually spend that much each month.

Mint made it easy to get to a point where I have all the color-coded, slice-and-diceable data I need to design my budget, but I'm still going to have to think hard about how much I want to save, and where I must exercise the discipline to spend less.