It was not that long ago that individuals wanting to gain a little a clarity or control over finances only had a few options where home computing was concerned. There were really only two go-to pieces of software for personal accounting and budgeting. Those were Intuit’s once dominant Quicken and Microsoft’s similarly feature rich software known simply as Money. They were powerful tools capable of tracking and balancing accounts, figuring out tax liabilities, and setting household budgets. They were also a bit expensive, and clunky, and required many updates. Those who didn’t want to be shackled to such software could take the less glamorous and more laborious approach and maintain pages and pages of Excel spreadsheets.
That was then. Today, users are presented with a wide array of personal finance solutions. From the simplest smart phone app to cloud-based money tracking, the choices of tools to reign in a budget are numerous. Back in the days of Quicken and Money it was assumed that users simply wanted to track spending and avoid overdrafts or maxed out credit cards. Today, users are more tech savvy and more budget savvy.
Crippled by credit card debt and shrinking — or at least not growing — savings accounts, many consumers have grown a lot more interested in stretching pennies and achieving the dream of freedom from debt. Others, not so encumbered with debt, may simply want some software to keep them aware of the check book balance. And still others need a complete financial makeover, a retraining of how to handle money prudently and stay on the straight and narrow.
This evolution in and proliferation of needs is driving a market of personal financial apps that is churning out numerous types of niche software. The one-size-fits-all model is dead. Microsoft quit updating Money in 2008 and discontinued all support for the once-popular product in 2011. Quicken survives, but many analysts believe it is dying its own slow death. Intuit currently seems to be throwing considerable weight behind a more recent, nimble, cloud-based solution for personal finance. More about that later.
What follows is a list of highlights from the new world of personal finance and personal budget software. Each product is aimed at a sub-group of consumers with distinctly different needs. That being the case, each product differs a good deal from its counterparts in terms of functionality, scope, and price. Some are catch-alls for any conceivable form of tax or money related information, while others are little more than glorified checkbook registers and at least one is part money manager and part budget coach. Some are completely free, and some will cost a few pennies. But none will cost as much as Quicken Premier’s whopping $105 price.
Mint is as good as a place as any to start. It is owned by Intuit and represents that company’s hedge against the new market of slimmed-down, cloud-based accounting. If Quicken ever does go the way of Microsoft Money, Mint will be there to fill the void for Intuit.
There are many differences between Quicken and Mint. The first to note is that Mint is completely free and ad supported. It is Web-based and almost completely automated. Automation is really Mint’s niche. With Mint there are no hours wasted in front of a computer diligently entering receipts into a digital register.
Users who set up an account with Intuit’s new service are immediately prompted to enter login information for bank and credit card accounts. Being web-based means that users then have only one stop online to check balances. The convenience comes at a cost, though. Mint does all the work for the user which means that personal entry isn't really available. Instead, Mint updates user accounts once every 24 hours. All transactions are downloaded immediately, what the bank says is what the user sees as a balance.
While users can then go in and re-categorize spending and Mint can “learn” patterns — all purchases at Shell, for example, are categorized as “gas” — many don’t like the inability to enter items manually, thus providing a safeguard against bank errors.
For the fans, Mint offers free smartphone apps so consumers can see their information on the go.
Check used to be called Pageonce. It can best be thought of as a more robust version of Mint. Mint does offer some budgeting capabilities and Check is deficient in that category. But Check makes up for it with other features.
Again the software is focused on mobility and simplicity. Check carries the same emphasis on “one stop” money management as Mint. All accounts are available to users from a single webpage. But users of Check are also able to pay bills and credit cards from the single screen. Transfers between accounts are a snap, and due dates of important bills are automatically updated.
Check also offers a “digital file cabinet” where money management gurus can store electronic statements and other important documents.
Perhaps taking the concept of the digital file cabinet too far is Doxo. The Seattle-based company hopes to free users from mountains of paper bills and paper records. It is personal finance software, to be sure, but it also attempts to be a complete household manager; an aggregator of all electronic files that, by necessity, flow through every home.
It is a one stop shop for banking, plus an electronic file cabinet. Doxo even manages emails, and offers some neat features, like limits for automatic bill pay. For instance, if the electric company pings a bank account for payment on the monthly bill, Doxo will deny the payment if it exceeds a preset limit. The service also allows users to store electronic copies of last wills and testaments and even medical records.
For the user who who is weary of automation and may want a little more control over a budget there is Mvelopes. It is based on the “envelope method” of budgeting that is still recommend by some money management gurus. Budgeters who use that method store cash in physical envelopes that are designated for specific categories. The money in the envelope marked “restaurants,” for instance, is all a person would have for dining out of the month. Once the money is gone, no more eating out that month. Money that is left over can be moved to a savings envelope or kept in the original envelope and carried into the future.
If that sounds cumbersome, that’s because it is. Mvelopes aims to streamline the approach by providing customers with virtual envelopes. They are basically just categories of spending that are customizable.
YNAB stands for “you need a budget” and it represents a completely new approach to money management. YNAB costs a new user $60 up front. That money buys a desktop app that works on a variation of the envelope scheme. Users are still encouraged to categorize each cent and stick to that plan. But the creators of YNAB, perhaps recognizing that a broken budget can be heart breaking thing, take it a step further.
When a user buys YNAB, they are also buying into a new way of looking at money. YNAB promotes its own four rule method of budgeting. The ultimate goal of the method is to create a month of “buffer” salary that keeps the user from living paycheck to paycheck.
To that end YNAB publishes a series of blogs, manages on online forum and even creates podcasts. It’s all designed to keep users motivated to break the cycle of overspending and stop sinking deeper into debt. The smartphone app will set customers back a few dollars, but with the app the user gets cloud storage (provided free through Dropbox) so the budget is always available on the go.
For the report addicted, YNAB may seem a bit paltry in that department. But the software, and the company, provide an awful lot of support and cheerleading for a pretty small investment.
While a desktop program may seem like a bit of a dinosaur amongst all these other Web-based apps, YNAB represents an answer to the call of the millions trying to get out of debt and maintain a livable budget.
The software itself is not earth shattering but the system that it supports is something different. It is not for everyone though. It certainly has its own niche market, just like each of the other options listed. And those choices represent only the highlights of the many, many choices out there. As trite as it is to say, there really is something for everyone and that may be the most significant shift in personal finance software. The days of two choices are definitely over.
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