While the magnitude of the current financial crisis remains uncertain, one thing seems clear: The party is over. The era of easy credit and blithe overspending is drawing to a grisly close. And not just for Wall Street BSDs. After years of being goaded toward ever greater heights of consumerism, average Americans are finally feeling pressure to buckle down, spend less, save more, and prepare for lean times ahead.
This is particularly bad news for me because I am a comically inept manager of my personal finances. It's not that I don't try. Over the years I have instituted several budgeting systems, ranging from a simple list of expenses tacked above my desk to an ambitious attempt to track every penny I spent for months. Still, my money disappeared in ways I could neither understand nor predict.
But then I discovered Mint, a two-year-old Web startup that lets you keep track of all your financial accounts in one place for free. It seemed like the perfect way to see where my money was going (and with colorful pie charts, no less) minus the hassle of tracking everything manually and without actually spending money on software. But Mint's not perfect, and the more I used it, the more I wondered: Would it be worth the upfront cost to purchase more powerful desktop software like Quicken or Microsoft Money? Or would a different free or low-cost Web service be even better? I decided to pull my finances together and find out.
I spent a month tinkering with a host of computer money-management tools, including an array of Web sites with funny names: Wesabe, Buxfer, Geezeo, Expensr, and Green Sherpa, among others. After winnowing the list to a manageable five finalists, I put them through the usual ups and downs of my monthly finances: the dizzying highs of payday; the demoralizing lows of rent payments, credit card bills, and impulse Internet sneaker purchases. The ideal software would help a financial dunce like me easily monitor multiple accounts (checking, savings, credit cards, 401[k]), identify spending trends, and maybe even save a buck or two. I evaluated the software using four criteria:
Security (10 points)
When I told friends about sites like Mint, which require you to divulge the passwords used to access your financial accounts online, they all had the same question: Is it safe? The answer: probably. All of the companies I evaluated tout their use of secure sockets layers technology and 128-bit encryption to securely transmit data on the Internet. To find out what that means—and if it's enough protection—I called up Alfred Huger, vice president of engineering at Symantec. He said that 128-bit SSL encryption provides a basic level of protection, but he would look very closely at companies' security statements, and he would be more inclined to trust a national bank than an unproven startup.
Bottom line: Yes, there are risks, and it's tough to say definitively that one site is more secure than another. If you're the type of person who is fundamentally uncomfortable sharing financial data on the Internet, I won't try to change your mind. (In that case, you might try a no-frills program like Buddi or Pear Budget, or download a budgeting template for Excel.)
Features (10 points)
Does the software support numerous financial institutions? How many ways are there to slice and dice your data? Can you categorize your spending, and does it let you invent your own categories? Can you set up budgets? Bill reminders? E-mail and text-message alerts?
One important issue: All of the tools I tested—except one—failed to incorporate pending transactions on my checking account. As a result, they displayed a balance that was usually a day or two out of date, forcing me to consult my bank's Web site for the real number. This may not be a deal-breaker for some people, but when you play the high-stakes game of paycheck-to-paycheck brinkmanship that I do, knowing the most up-to-date balance is crucial. This played a deciding factor in choosing a winner.
Ease of Use (10 points)
Is the software easy to set up? Does it have an intuitive interface? Can you update your accounts with one click? Is there an overwhelming number of features? What if you need help?
Value (10 points)
How much does the software cost? Are there associated bank fees? Are the features on the pay software worth the money, or would you do just as well with a free Web-based platform?
Here are the results, from confounding to ka-ching!
Quicken Deluxe 2009, $39.99 Quicken seems to hold a slight edge over its rival Microsoft Money in head-to-head comparisons, and it has certainly attracted a devoted fan base of expense-tracking obsessives. So, I was expecting fireworks. Instead, I found a crowded user interface with a bewildering array of options. Setting up all my accounts was time-consuming and frustrating, and I was disappointed that the software lacks a simple central overview of my financial health (or illness, as the case may be). Plus, the fact that all transactions are recorded on a checkbook-style ledger drove me crazy. I've never balanced a checkbook in my life! In short, the software made me feel stupid—which, naturally, made me want to cheer myself up with some reckless impulse spending. Not a good start.
Securitywise, Quicken is a safe bet—it stores passwords only on your home computer, not on its own servers. And it certainly offers a lot of powerful tools. (I particularly like the fact that you can write checks in the software.) But if, like me, you're looking for a simple snapshot of your finances, I would suggest something more basic—and less costly.
Ease of Use: 2
Total: 22 (out of 40)
Microsoft Money Plus Deluxe, $39.99 Money is classic Microsoft: Everything is fine, if a bit clunky; nothing is particularly great. I definitely found it to be more user-friendly than Quicken. When you log in, it immediately displays a summary of all your accounts with a chart of spending categories and some personalized reminders. The Windows XP-style interface isn't very attractive, but it's familiar and relatively easy to navigate. In terms of features, Money's a draw with Quicken: There are tools for budgeting, bill payments, and even lifetime fiscal planning.
My biggest complaint is cost: The initial download is priced the same as Quicken, but my bank charged me an additional $10 a month to let Money automatically download data. (I could grab data manually for free, but then what's the point of the software?) Money's security practices may also give some people pause: It stores your bank passwords in a Microsoft data center, and, as CNET has pointed out, it requires a Windows Live ID, which is used for a variety of Microsoft-run services and hence may be more vulnerable.
Ease of Use: 7
Total: 23 (out of 40)
Wesabe, Free Founded in 2005, Wesabe attempts to apply the community spirit of social-media applications like MySpace and Digg to your personal finances. Of course, it does not actually share your financial data; instead, it provides personalized tips based on your spending habits, plus access to a bunch of message board-style groups. I like the concept, but I found the execution spotty at best. The tips in particular were a bust: I'm not jazzed, for example, by the fact that 948 Wesabe users recommend Arby's, where they saved an average of $1.41 per visit over McDonald's. And while I can see the appeal of joining a group devoted to, say, paying down debt, this seems incidental to the site's money-management tools—which, in general, weren't as nicely presented as some of the other Web sites.
Ease of Use: 5
Total: 28 (out of 40)
Mint, Free Mint was the first site I tried, and it remained a favorite throughout these tests. Of all the software, Mint was the easiest to set up, and it has the most cleanly designed and intuitive interface. Its e-mail and text-message alerts work great, and unlike some of its competitors, Mint will e-mail you a weekly financial summary that I found useful—I like being able to look back to see that, despite the global financial meltdown, my net worth actually increased in recent months. (Granted, it's still in negative digits.) Plus, Mint was the only software to support all seven of my financial accounts—none of the others recognized my current 401(k) provider.
But Mint is not without its flaws. Its "Ways To Save" section—which is supposed to provide personalized tips based on your transactions—is more like thinly disguised advertising, repeatedly exhorting you to switch to a lower-interest-rate credit card or sign up for a different checking account. Mint stores users' data on a third-party server, albeit a trustworthy one. And while you can easily assign categories to transactions, Mint doesn't let you create your own—forcing me to classify subway expenditures under "Auto" and visits to the corner deli under "Groceries" instead of something clever like "late-night beer runs."
Ease of Use: 10
Total: 34 (out of 40)
Quicken Online, $2.99/month I disliked Quicken, but I loved its stand-alone Internet platform, which Intuit launched at the beginning of the year. The only thing Quicken Online does wrong, really, is charge $3 a month for its service. In every other respect, this was my favorite by a significant margin. It's the only software that managed to consistently display the most recent balance on my checking account, which was key. It also lets you enter expenses that haven't cleared yet and thus avoid those classic "Oops, forgot all about that check!" moments. Setup and navigation are a breeze. The main page is good-looking, and it has a handy "Am I living within my means?" calculator. (Answer: not really!) The security measures seem reliable. Help is easy to find—and actually helpful. And I love being able to create custom categories for my spending, which allows me to tease out some interesting trends—and occasionally casts harsh light on some bad habits. For instance: Did I really spend more money on wine and liquor in September than I did on groceries? Well, you know what they say: The first step toward change is admitting you have a problem. Thanks, Quicken Online!
Ease of Use: 10
Total: 35 (out of 40)