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:
(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.