The Wall Street Journal-20080113-MarketWatch- Web Sites to Keep You on Budget
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MarketWatch: Web Sites to Keep You on Budget
It's hard to ignore how much you're overspending every month when the dollar amount is glaring at you on your computer screen. And a new crop of online money-management tools hopes to give consumers exactly that kind of tough love.
A growing number of Web sites help people keep track of where their money is going, pooling information from credit-card and bank accounts, and categorizing expenses.
There are about two dozen such tools, says Jim Bruene, editor of Online Banking Report, an industry newsletter. Recent additions are Mint.com and Geezeo.com, which launched last year.
The newest offering is Quicken Online, out last week, which allows users to log on from any computer or iPhone to see their current financial picture, and sends text or email alerts when a payment is due.
The ability to aggregate personal financial information has been around for years, but was put on hold until the masses got comfortable with banking online, says Shawn Ward, co-founder of Geezeo. Another big shift: More people are using debit cards than before, and there's a huge incentive to watch these accounts closely.
"People are making 50, 60 transactions on their debit cards" each cycle, Mr. Ward says, and consumers who make multiple debit-card purchases without realizing their account is tapped dry can face multiple overdraft fees.
For those who don't keep close financial records, seeing a spending breakdown on one of these tools can be a big shock, says Diane Pearson, an adviser with Legend Financial Advisors, in Pittsburgh. But don't let it paralyze you. It's like an eating diary when you start a diet. "Sometimes when you start to write down...what you're eating, you pay a lot of attention to where your calories are coming from," she says.
Before choosing a tool, take a look at how the various sites might fit your needs. The display of information varies from site to site, and many offer tips aimed at helping people make over their finances.
Quicken Online may be a good option for TurboTax fans -- you'll be able to import data for the 2008 tax year. The service costs $2.99 a month, but those who want to test-drive it can do a 30-day trial.
Those seeking services that have stood the test of time might look at Mvelopes.com, which launched online in 2004. The system is based on the envelope method of budgeting, which allocates funds by expense category. Fees range from $189.60 for a two-year subscription to $39.60 for a three-month subscription.
Is community important? In addition to aggregating account information, Wesabe.com and Geezeo.com let members anonymously network to ask questions and offer each other advice while working toward financial goals. Both sites are free.
Mint.com is for people "who want to get in and get out," says Aaron Patzer, chief executive. The average user spends five minutes at the free site to check accounts. Users will get recommendations for banks and credit cards at the site, and some of the companies are site sponsors.
The tools mentioned take various security measures to protect the sensitive information with which they're entrusted. But before joining a service, read security and privacy policies.
Here are several other safety tips:
- Protect yourself. Make sure your computer is updated with the latest versions of antivirus and antispyware programs, says Avivah Litan, an analyst with Stamford, Conn.-based Gartner, an information technology research company. It's also wise to avoid peer-to-peer file-sharing programs on computers where you access financial information.
- Check in often. Log on regularly to make sure your information isn't being abused or used in a way you didn't expect, says Mustaque Ahamad, director of the Georgia Tech Information Security Center. Also, before signing up, make sure it's clear how to cancel the service if desired.
- Double-check details. Don't rely on the information collected from banking and credit-card accounts to be 100% accurate. Look for and report errors, and keep a paper trail of statements for your records.
- Listen to your gut. If there is any doubt in your mind about using a third party to bring all accounts together online, there's no shame in budgeting offline. "Don't do it if it's going to cause you anxiety," says Jason Knight, chief executive of Wesabe.
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