EmailBecause online finance software products vary quite a bit in what they do and how they do it, it is important to know not only what features are most important to you, but also how you feel about security issues. Most software is either free or offers a free trial period, so in addition to consulting reviews, you can try it out for yourself.
Is it safe to store personal financial data online?
Security is a major issue to consider in choosing online finance software. Issues to think about include where your account data is stored, how well it is protected and what sort of personal information you have to provide when you sign up. Most experts say that data stored on a company's server is actually more secure than data stored on a home computer, especially since many owners tend to be lax about installing and updating security software on their home computers.
Companies that provide online financial management offer data security and encryption that is equivalent to that of banks and other financial institutions, and most are certified by web security firms like VeriSign and HackerSafe. Moreover, companies like Mint.com say that since the user provides only an email address, zip code and password when signing up for the service, data remains anonymous -- no name or Social Security number is attached to the accounts that are stored on their server. Finally, many companies contract out their automatic account aggregation service to a third party -- most to a financial company called Yodlee, which also provides this service to major financial institutions (and has its own finance software website). When a company uses an account aggregation vendor, its employees do not have access even to account numbers or data. Most experts consider Yodlee a trusted entity because of its relationship with respected financial institutions. In any case, read a company's privacy and security policies before giving out any personal information.
Some people balk at the very idea of providing a third party like Mint.com with the login names and passwords for all their accounts. People with such concerns may be happier with online finance software that does not automatically download and update account transactions. While Mint requires you to provide login information for the accounts you'd like to track, competitor Wesabe gives users the option to export account data from their bank website, then upload it to their Wesabe account. The service also has an automatic option like Mint. In either case, the only information stored on the Wesabe server is the description and amount of each transaction, with no personal information attached.
Beyond security and access issues, online finance software products differ greatly in terms of the features they offer or emphasize. Some have robust user communities, some excel at budgeting, while others help with more advanced financial planning, including investments and retirement accounts. There's also a niche group that helps to track group expenses, helpful for roommates or for managing shared travel expenses. Since most of these services are free, consumers can always try out more than one software product, although set-up can be time and labor intensive.
Consider the following before signing up with any service:
- Read the company's security and privacy policies, which should be available on its website.
- Check that your banks and other financial institutions are compatible with the software; this will mostly be an issue if you use a small local bank.
- Be sure the software you choose has easily accessible help features and customer support.
- Decide if you need complex spending reports and charts that aggregate data from various types of accounts including investments and loans, or just basic reports that track recent spending and savings.
- Are you looking to create and track a budget or get out of debt? Some products have better budgeting tools than others. Buxfer is easy to use and is free.
- Do you want to be able to access your accounts on the go and receive alerts on your mobile phone or other device? Quicken Online and Mint both do this.