Managing your money is a complex skill, especially now that you no longer have to leave the house or even pull out your wallet in order to spend money.
That’s why it is more important than ever for you to track spending and stick to a budget. But the old school methods of budgeting can be far too onerous for the new Millennium. No one wants to be carrying an old-fashioned ledger book around with them to record financial transactions, and creating your own Excel spreadsheets sounds like the world’s worst homework assignment.
That’s where personal finance software comes in. There are many different budgeting and tracking programs available to help both beginning and veteran budgeters get a solid handle on their finances. Read on to learn which program will work best for your financial situation:
One way to describe Personal Capital’s budgeting software is an “account aggregator.” This program allows you to track and understand every single penny in all of your financial accounts. Once you link up all of your various accounts, including your bank accounts, investments, mortgage, credit cards, and any other accounts, Personal Capital summarizes your finances and offers you basic investment guidance.
Considering the fact that Personal Capital also tracks investments, it offers a more comprehensive (and free!) service than similar competitor Mint. The program generates graphs and charts to help you better understand your financial picture, including the following:
- Net Worth
- Account Balances
- Income Reports
- Spending Reports
- Asset Allocation
- Investment Returns
- Projected Investment Fees
Basic budgeting is also a snap with this program, as the interface gives you an understanding of all of your spending and account balances, and allows you to categorize your spending by date, merchant, and type of expense. The associated mobile app for iPhone and Android allows you to keep track of your budget even when you’re not at your computer.
Personal Capital also recently released a Retirement Planner tool that can help you build, manage, and forecast your retirement savings in the same place you handle your regular budgeting. You can use the Investment Checkup feature that asks you to create a basic risk profile, pick a target retirement date, and your projected income sources, and the program will recommend a portfolio for you. Finally, there is a fee analyzer that can help you to understand the fees you are paying on you current investments.
As with all other web-based personal finance programs, Personal Capital uses the same security and encryption you can expect from online banking.
Pros: The most comprehensive aggregate of financial information, making this ideal for those with complex finances. Basic investment guidance is a major plus.
Cons: The program is not as customizable as some others—neither asset allocations nor spending categories are customizable.
Now in its tenth year, Mint is the original free web-based personal finance tracker. When you sign up with Mint, you provide the program with all of your financial accounts, including bank accounts, investments, retirement funds, credit cards, 529 accounts, and the like. Mint allows you to see all of your financial information in a single dashboard, which also calculates your net worth.
To get into the nitty-gritty details of your finances, Mint tracks your transactions and automatically assigns an income or expense category for each one. It also assigns a default budget to each category of expenses, although you can create your own monthly budget, as well. The default mode is a nice way to start budgeting if you’ve never done so. You can see your financial progress using the trends function, which creates graphs and charts of your finances to help you understand where you money goes.
Mint also helps you create goals—both savings and debt reduction—and tracks your progress.
It’s important to note that Mint does gain access to your login credentials. So there is the potential for exposure of this information. However, Mint offers the same kind of security you see from an online bank, making them just as safe as Capital One or Bank of America.
Pros: Mint is completely free, very user friendly, and offers balance and spending alerts to keep your money on your mind.
Cons: You have to manually track cash spending, some automatic expense categories are not useful/incorrect and need to be changed by the user.
You Need a Budget (YNAB for short) is an online budgeting program based on the envelope method, wherein budgeters set money aside for specific categories of spending. The program guides you through the process of budgeting, setting goals and sticking to them, and reconciling accounts.
The philosophy behind YNAB is built on four basic rules that will help users live within their means:
- Give Every Dollar a Job—All money you receive is assigned to a specific budget category
- Embrace Your True Expenses—Understand your irregular expenses.
- Roll With the Punches—You can strategically rearrange budget categories if your spending doesn’t exactly align with your plans.
- Age Your Money—You can end the paycheck-paycheck cycle by building a buffer of one month’s cash in hand.
YNAB believes that in order to successfully budget, you need to be hands-on with your money. Until the most recent version was released in December 2015, users had to manually enter all transactions—although the program and its companion apps for iPhone, iPad, and Android devices made this very easy. This also means that YNAB is one of the few programs that easily allows users to track cash spending.
With the most recent update, the program does now automatically import transactions, but it is up to the user to assign each transaction to its appropriate budget category. You may still use manual entry if you prefer, or a combination of automatic and manual.
In addition to the program, signing up for YNAB gets you access to financial literacy classes, tutorials, a community of YNAB users, blog posts, and budgeting tools and tricks.
As with Mint, YNAB’s security is bank-grade, and the program relies on third-party audits to maintain data privacy.
At $50 for a 12-month subscription, YNAB is not the cheapest personal finance program around, but you get a generous 34-day free trial before you commit.
Pros: YNAB is geared toward teaching users how to budget and make managing their finances a habit. The large online community can be very helpful.
Cons: The hands-on nature of the program might not appeal to all users. The cost is higher than most other personal software.
Cost: $50 per year
Like YNAB, Mvelopes is personal finance software that offers a 21st century method for following the envelope budgeting method. This online tool has both Android and iPhone apps that allow you to keep track of your spending on the go.
When you sign up with Mvelopes, you link up to four bank accounts (including checking accounts, credit card accounts, and PayPal accounts, among others) and create up to 25 spending “envelopes” to manage your spending. The program automatically tracks your transactions, which you then assign to the correct spending envelope, where the amount of your transaction is subtracted from the money in that envelope. You may also manually track cash transactions.
One of the unique features of Mvelopes is how it handles credit card purchases. When a user makes a purchase using a credit card, the program removes the transaction amount from the spending envelope, and places it in a special envelope to pay off the credit card. When your credit card bill arrives, the amount due is already set aside in the envelope, so you will be able to pay off your bill in full.
The basic Mvelopes program is free, but the Premier version costs $95 per year and offers unlimited banks accounts and spending envelopes, as well as integrated premium video content and live chat support.
As with other online personal finance programs, your information is kept secure with the same top-level SSL encryption technology used by all major banks.
Pros: Mvelopes is set up to be interactive in order to teach users how to budget. The credit card spending envelope feature is a very helpful aspect of the program.
Cons: Multiple reviewers have stated that the program is not necessarily intuitive.
Cost: Free for the basic program, $95 per year for Mvelopes Premier
Quicken is the great-granddaddy of personal finance software, having been first introduced back in 1983. The current version, Quicken 2016, was released in late 2015, and will be the final update by Intuit, since the company sold Quicken to a private equity firm.
For many people, Quicken’s biggest selling point is the fact that it is a software program you install on your hard drive, meaning all of your sensitive financial information is also stored there—making it secure from any potential hackers gunning for online personal finance programs. (Of course, this also means you cannot access Quicken on the go).
In addition, because Quicken offers a great deal of customization and control, you can make the program work for your specific circumstances. In particular, investors can easily use Quicken to track their portfolios and quickly find any data they need in order to make investment decisions. The newest version of this software now allows users to automatically track and pay bills.
Of course, Quicken is also well-known for its sunset provision that stops online features and formatted files from working after a certain time period, which means users have to buy a new license to continue using the software. Often, these updates also include a new interface, meaning users have to relearn the program after each update.
Pros: Quicken is the most comprehensive personal finance software available. Security-conscious users can rest assured that their information is completely safe.
Cons: The sunset provision can be extremely frustrating. The lack of an associated app can make it difficult for some users to stay on top of their budgeting with Quicken.
Cost: Between $30 and $95, depending upon which specific software package you purchase.