Personal Finance Site Review

Advantages of personal finance sites

Over the past several years, online finance software products have sprung up so fast that it's hard to keep up with new ones, not to mention upgrades to those that already exist. Barron's columnist Mike Hogan writes that "even old-timers realize that soup-to-nuts accounting is out; money-management lite is in." Personal finance sites offer easy online and mobile access to your financial accounts (no download required), and in most cases their services are free. This report covers personal finance sites that offer similar features to the desktop-based products covered in our accounting software report; we also have a separate report on online bill paying that covers the bill-pay side of paperless financial management.

As the term "money-management lite" implies, the functionality of online finance sites is not as robust as that of Quicken or other desktop software when it comes to complex financial planning and analysis. Some reviewers, in fact, insist that personal finance sites are more about organizing and monitoring finances, and less about financial management. Experts say that online software, which performs a lot of tasks automatically, is best suited to people who do not want to spend a lot of time on their finances. Mint.com founder Aaron Patzer, for example, says that the average user spends about five minutes at a time on the site.

Like traditional accounting software, personal finance sites house all of your financial information in one place, but they offer some advantages over desktop software like Quicken. With web-based applications, you can access your account data from any computer with an Internet connection, and get up-to-the-minute account balances and alerts via text, email or in some cases, a mobile app on your smartphone. There is nothing to download or install, so online software takes up no disk space and can run on nearly any computer; there is no need to worry about disk failure and possible data loss. In addition, online software is compatible with just about every operating system (Mac or PC) and browser. Another advantage is that there is no need to buy or download patches or newer versions of the software; fixes and upgrades are done on the provider's server and are immediately operational. Most personal finance sites are free; in fact, all but two of the services discussed in this report are free. (The exceptions, Mvelopes.com (*Est. $130 per year) and PearBudget.com (*Est. $3 per month), are discussed in the Online Budgeting Software section of this report.

One potential downside to personal finance sites is that most require you to provide login information for all of the financial accounts you want to track. The company (Mint.com, for example) then automatically logs on to your account sites and imports the data; when you log on to the personal finance site, you can see all your financial data in one place. This process of gathering data from different sources into one location is called account aggregation. Experts say the information is more secure on the company's server than it is on your desktop, that no identifying information like your name or social security number is attached to the financial data there, and that no one can move any money around on the server in any case. However, some people just aren't comfortable providing their login information or having their data housed on a company's server; they may be more comfortable with desktop accounting software. Another option is sites like Wesabe.com and Buxfer.com, that give users the option of manually downloading account data to their desktops, then uploading it to the personal finance site themselves, so there's at least no need to provide their login information.

In late 2009, Intuit, maker of Quicken software, acquired competitor Mint.com, which changed the overall landscape of personal finance sites. Intuit's Quicken Online has stopped accepting new members and is in the process of migrating accounts over to Mint.com, while Mint has begun to incorporate some of Quicken Online's features.

The most comprehensive and up-to-date reviews of personal finance sites we found are at CNET, CBS.com and MoneyWatch.com. ConsumerReports.org reviews, but does not rate, several desktop and online finance software products. Another thorough and credible recent review on CNNMoney.com compares and rates four sites; Slate.com also offers an excellent comparative review. Another fairly recent, credible review of six online finance software products is available on Forbes columnist Sramana Mitra's blog; Kiplinger.com also reviews six budgeting websites. Because consumers don't have to buy anything, there are no user reviews at sites like Amazon.com, but user comments follow many online reviews, so it is possible to get a first-person perspective on personal finance sites. A discussion thread on Epinions.com provides helpful user feedback on Mvelopes.com customer service and usability issues.