If you're a Quicken or Mint.com expert, move on. This tool is for folks who aren't already budget pros -- and only want to spend a few minutes setting up a simple, but effective budget.
To get started, click the "Settings" tab, then:
The next part takes about 20 minutes the first time through. Use the "Transactions" tab or the "Accounts" page to assign one of the three expense categories to each item. Concentrate on the bigger dollar items... smaller stuff under $20 isn't usually critical.
View the results of your budget on the "Spending" tab. Are you over budget on your "bills and necessities"? If so, you may be living too large -- and you may need to downsize what you pay in bills. If you get caught in an economic downturn and get laid off, these financial commitments are at a level that may not be sustainable.
Are you over budget on "fun and niceties" at the expense of "savings and debt paydown"? That means you'll want to dial back some of your optional spending, focusing perhaps on less expensive means of entertainment.
Track your progress, sharpen your analysis
You do not have to do this exercise every month. Rather use this tool to find out where you stand and make a plan to adjust your spending over time. Then, try it again with another month's transactions in three to six months.
Is your spending roughly in balance? Great job -- keep up the good work!
If you want even greater insights into your spending, promote yourself to a finer analysis using budget categories beyond just the "1st-time Budget" group. It's your choice.