Online tools for managing personal finances have multiplied in recent years. The most popular site, mint.com, has more than 7 million users. The sites are all basically free, but some promote financial services from sponsors. Others offer ample free tools but charge for premium services.
Most sites require the user’s bank account numbers and passwords to connect personal financial data with the site. This has caused many to shy away from this type of effective financial management. As of yet there have not been security breaches and all sites have bank-level encryption and security. If a digital budget site was hacked, the customer’s financial data could not be manipulated because the information on the site is only at a “read-only” basis. However, if a digital site user would divulge personal information via a clever phishing scam, then his/her site could be compromised.
Here are the Kiplinger’s Personal Finance top 6 digital budget sites:
Mint.com is rated by Kiplinger’s Personal Finance as the best site. Clients who have tried other sites have described this site as “much cleaner and easier to use.” The “goals” tool is widely used, allowing customers to set specific targets and track progress. Pie charts are automatically created to track and give a clearer picture of objectives like saving for retirement.
ReadyForZero.com has helped many pay off their debts twice as fast as most people without online help. Users can experiment by submitting various monthly payment amounts. The interface informs the users how much time it will take to pay off a debt and the interest needed to be paid. An appropriate payment plan is then chosen. Notifications of due dates and rate changes are also issued.
LearnVest.com’s main shortcoming is that it doesn’t monitor the user’s progress like most sites do. However, the site’s Knowledge Center is unsurpassed with its variety of useful financial check lists, calculators and money basics. It is considered the best site for financial novices. It offers personal finance “boot camps” by email, as well as a premium service that provides the guidance of a financial planner.
Mvelopes.com claims its typical user reduces spending by about 10%. Chief executive Steve Smith says: “You really start managing your finances instead of just reacting to things that happen on a monthly basis.” The basic idea is that each spending category is divided into “envelopes”, and when the envelope is void, so is the spending for that objective. The free membership gives the user 4 financial accounts and 25 envelopes. For a monthly fee of just $10 the user gets unlimited accounts and envelopes, as well as personal guidance from the company’s financial coach.
Yodlee.com’s Money Center has a simple, customizable dashboard for all budgeting tasks. The site offers 56 financial apps to choose from that can be dropped into the user’s personalized dashboard. Yodlee also offers a tax center affiliated with H&R Block which gives tips on deductions and other tax related matters.
BudgetPulse.com offers the same basic features as other budget sites but requires a lot more work. It is the best site for those anxious about hacking and security breaches. There is no online link to the user’s bank or financial institution. Financial data is imported from personal Quicken files or the account is manually compiled. Therefore, accounts are not automatically updated like sites that use a direct bank link. The user enters each transaction. It takes more time but offers peace of mind for people worried about sharing financial information online.
Stacy Rapacon, “Digital Budgets for Everyone”, Kiplinger’s Personal Finance, October 2012
Photo: 401(K)2013 (flickr CC)