Personal Finance Site Review

Advantages of online financial software

Over the past five 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," referring to long-established companies like Intuit, maker of Quicken, that are shifting their resources toward online rather than desktop finance software. Intuit's free software, Quicken Online, is discussed later in this report. Online finance software offers easy online and mobile access to your financial accounts, and in most cases is free. This report covers online software that offers the same or similar features as 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.

Like traditional accounting software, online finance websites house all of your financial information in one place, but it offers some advantages over desktop software like Quicken or Microsoft Money Plus. 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 or email. 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 online finance software is free, and even companies that charge users a monthly fee typically charge very little.

As the term "money-management lite" implies, the functionality of online finance sites is not as robust as Quicken or Microsoft Money software when it comes to complex financial planning and analysis. Some reviewers, in fact, insist that online finance software should be referred to as financial organization or monitoring software, instead of as financial management software. 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 CEO Aaron Patzer, for example, says that the average user spends about five minutes at a time on the site.

Online finance software products undergo constant changes and upgrades, so reviews and roundups can quickly become irrelevant. The best comprehensive and up-to-date review we found is at CNET; it compares and ranks five financial software websites. Another thorough and credible recent review on CNNMoney.com compares and rates four sites. Slate.com also offers an excellent comparative review, although it was written before Intuit eliminated a $3 monthly fee to use Quicken Online.

Another very recent, credible review of six online finance software products is available on Forbes columnist Sramana Mitra's blog; Kiplinger's Personal Finance magazine 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 online finance software products. A discussion thread on Epinions.com provides helpful user feedback on Mvelopes customer service and usability issues. Consumer Reports does not rate online finance software.