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Should I use Quicken, Mint, or other software to manage personal finances?

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Quicken, Mint, Check, and other services offer the ability to aggregate and track all of your financial and spending information in one place.

The basic idea behind these services is similar. After registering, provide the login details for various accounts — banking, credit card, loans, bills, etc. The software connects to these accounts, downloads the data, and adds everything up. It makes it a lot easier to manage personal finances. The software interfaces can display the following data:

  • Total cash available, across all accounts
  • Total credit available
  • Monthly budgets and expenditures, by category
  • Investment performance (stocks, mutual funds, retirement accounts, etc.)
  • Alerts (for instance, a spike in spending in a certain category, or an upcoming bill)
  • Advanced features such as investment analysis and online payments

If you complete the setup process and link up all of your primary bank, credit card, and financial services accounts, these tools can provide some fascinating insights into your assets, investments, and spending levels. One of the most eye-opening pieces of information for me was a chart on Mint.com that showed my overall assets, including the total value of my house and retirement accounts.

But the services have some fundamental differences:

Quicken vs Mint vs Check

(Note: Mint.com is now owned by Intuit, which also sells Quicken as well as other financial software packages including TurboTax and Quickbooks.)

Many people would choose one of the free money management tools. However, there are a lot of people who will gladly pay for Quicken because it is PC-based software. Data you enter into Quicken is not uploaded to the Internet. This means users have more control over their data, and feel reassured that all of their sensitive personal and financial information won’t reside on a remote server or in the cloud.

In addition, users of Mint and Check have reported issues with third-party bank and billing accounts that may become inaccessible or fail to update. Being unable to access certain data makes for flawed planning and analysis. For instance, how can you accurately track and plan for debt reduction if you can’t connect to all of your credit card accounts?

Lastly, the services can be complicated. Besides the hassles associated with connecting all of your accounts, setting up budgets, targets, and alerts is a lengthy process. Some people have complained that the tools aren’t flexible enough to handle real-world budgeting or planning situations that might be thrown off by an emergency or unexpected expense.

This post was excerpted from Personal Finance For Beginners In 30 Minutes, Vol. 1, by Ian Lamont. All rights reserved.

Example of a really dumb password

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Well, maybe it’s not that dumb, but it is certainly a problem. Jordan has made a grave mistake in the password that she uses for her email, social media accounts, online banking, Amazon, and every other online and mobile service that she has signed up for. Here’s the password:

JM071987

Jordan thinks this is a great password. It’s easy to remember, has a mix of letters and numbers, and looks kind of “random” to anyone who happens to see it. She thinks it’s a lot smarter than some of the other passwords that people use, like “password123” or the names of pets and children.

It’s actually a dumb password. The letters and numbers aren’t random at all — they are Jordan’s initials and the month and year of her birth. Someone who knows her could guess it, and smart hackers who know her name (easily found on Facebook) could apply various techniques to figure out her password.

Dumb password example gives hackers keys to the castle

Don’t give up the keys to the castle with dumb password choices!

There’s another big problem with Jordan’s password. Not only is it easy to guess, she uses it on every website and mobile app she has registered for. This means if someone guesses or steals her password for one service, they have the keys to the castle for every other service she uses, including critical services such as email and bank accounts.

What should Jordan do? As a first step, she should immediately change all of her important passwords. Here are some criteria that she could apply when choosing new passwords:

  • Each account that contains personal or important data should have a unique password. The same goes for four-digit personal identification numbers (PINs).
  • Don’t use first or last names, initials, or common words — especially “password” — this is a dumb password that gets lots of people in trouble!
  • Don’t use repeated or consecutive numbers (“123456” or “8888”).
  • Include a mix of letters (upper and lower case) as well as numbers and (if allowed) symbols.
  • If asked to create answers to security questions, avoid questions which have answers that can be easily found out, such as place of birth, elementary school, or mother’s maiden name.
  • Leave a backup email address or a mobile phone number, which can help with password recovery.
  • Change passwords regularly.
  • Store passwords in a secure place (not on a piece of paper in a desk drawer!)

Dumb passwords and two-factor identification

Anyone who is serious about account security should also use “two-factor identification” when it is offered. If enabled, when someone tries to log on to the account from an unrecognized device or location, that person will not only have to enter the password, they will also have to enter a code that’s sent to the mobile phone associated with the account. It is a bit of an inconvenience, but it makes it extremely difficult for hackers or scheming ex-boyfriends or girlfriends to access email or social media accounts.

This post was excerpted from Personal Finance For Beginners In 30 Minutes, Vol. 1, by Ian Lamont. All rights reserved.