Today’s guest post comes from personal finance author and speaker Matt Bell, who runs the Money Purpose Joy web site.
Whenever I teach financial workshops I ask people, “If a budget were a person, who would it be?” Answers typically include “Scrooge” and “the Grinch.” One person even said, “the devil.” Clearly, budgets have an image problem. However, in recent years several free online budget sites have emerged, taking much of the pain out of the money-tracking process.
I recently put five online tools to the test. They all emphasize their security, knowing that’s people’s biggest concern since they have to enter their user names and passwords for their banks, credit cards, and other financial institutions. The main factors I looked at were ease of set up (I tested their ability to connect with the large bank, small bank, credit union, and credit cards that my wife and I use) and features. Here’s a brief summary, with the services listed in alphabetical order.
Geezeo launched in May 2007 and co-founder Peter Glyman says it has more than 100,000 users. Geezeo emphasizes its social networking features, encouraging users to support each other in the pursuit of financial goals and share money-saving ideas. While I like that premise, I had trouble connecting the service with even my large bank, and when I tried to set up one of my credit cards, I got a message saying, “Heavy traffic is causing delays. Please try again.” After two days, I gave up.
Mint began in September 2007 and has attracted more than one million users, according to Product VP Aaron Forth. I found it relatively easy to set up my accounts, and Mint offers features that go beyond tracking income and expenses. For example, Mint’s interface with Cyberhomes monitors your home’s value and includes it in your net worth calculation. Mint also lets you know how much of your available credit you’ve used on each of your credit cards.
On the downside, there’s no easy way to track the use of cash. If you take money out of an ATM, every time you spend some you have to go back to the ATM transaction and “split” it, assigning the amount to its proper category. Another feature I wish Mint offered is a year-to-date summary of spending compared to budget by category. Currently, you can see how much you’ve spent, but not how that compares to your budget.
Mint makes money by recommending financial services to its users. While the recommendations are not intrusive and are not all from paid sponsors, some may not be in users’ best interests. For example, the site recommends getting your credit report from FreeCreditReport.com, which provides “free” credit reports only if you remember to cancel a credit monitoring service that will otherwise cost a Mint-discounted $12.95 per month.
Quicken Online launched in January 2008 and has over one million users, according to Product Manager Barron Ernst. It provided quick connections to all of my financial institutions except my credit union. After filing an online support ticket, the service helped me resolve the problem by the end of the day. Of the services I tried, Quicken Online offers the best cash management solution. Money taken out of an ATM shows up in an account called “My Wallet,” where it can be categorized as you spend the money. However, Quicken Online currently does not allow transactions to be split nor does it allow users to create sub-categories.
Wesabe started in January 2006 and CEO Marc Hedlund said the site is “well into hundreds of thousands” of users. Like Geezeo, Wesabe emphasizes its social networking features. The site connected easily to my credit cards, but transactions from my local bank required a manual procedure in which I had to log onto the bank’s web site. The site also uses “tags” instead of categories and sub-categories, which I found somewhat confusing.
Yodlee MoneyCenter gets the award for doing the least to draw attention to itself. Yodlee markets its services primarily to banks and other financial institutions, even providing the data aggregation engine behind Mint. However, its MoneyCenter, which the company uses as something of an R&D lab, is available to anyone.
The site provided easy linkages to all of my accounts and offers the widest array of features of any of the tools I tested. Aside from basics, like tracking income and expenditures and providing a helpful year-to-date spend vs. budget analysis, it also tracks credit card reward points, home value via Zillow, percentage of available credit used per credit card, and more. The only missing feature is a fluid way to track the use of cash. It uses the same process mentioned earlier, where you have to keep going back to an ATM transaction and splitting it every time you spend cash.
While none of the services are perfect, all are continuing to refine their offerings. As they do, the lowly budget is being remade into an easy-to-use—even enjoyable—money management tool.