Review of personal finance and money management software
Once I decided to take control of my finances, the easiest way for me to track accounts, manage expenses and calculate networth was to use personal finance software. I will be reviewing some popular and not so popular money management products that I have used.
In each review, I will also be rating the software on some parameters that are important for me:
a) Price (Free/Ouch) - I prefer free software. Yes, this means losing out on good systems like Quicken and Microsoft Money. It also means that the replacements may sometimes not be fully featured and may lack customer support. An open source alternative like GnuCash does not have a 1-800 number you can call for questions. However, the price makes it perfect for me and I do not mind haunting support forums and googling for answers.
b) Platform (Online/Desktop) - I am still ambiguous as to which platform i prefer. Any decision will be based on
- Security - Restricting my software to the desktop takes care of security issues. But I also use online bank accounts and the standary security practices like 128 bit SSL encryption are generally safe, notwithstanding the high profile data breaches one hears about.
- Flexibility - If my accounts are online, I can access information even when i am at work. Or on vacation. But beware : At one point, my homemade excel sheets were residing in Google docs and I ended up on vacation to a place with no internet access. Go figure
My solution these days : Have a daily backup/sync routine between the desktop and ipod. Wherever I am, my ipod is with me and as long as the computer has a USB port (which is a standard issue these days), I am all set to access my data.
c) Budgeting (Yes/No) - I do not budget to the last dollar. What I have are spending categories and I know how much i generally spend in each category. Some like rent are constant and I don’t track them each month. However, i track my groceries a lot as the amount can vary wildly from month to month, depending on whether i have a carbohydrate craving or have jumped on the eat natural bandwagon. Any software i look at should allow me to set up my own spending categories. Mint has finally added the budget feature and is now in my list of software to try out.
d) Complete Picture - If I am a starving college student, the total of my bank balances would be enough for me. All I would need to know : You have less than 5$ in the bank - so DO NOT buy that latte. Now that I have 401K, Roth IRA and investment accounts spread across two continents, any number shown to me must include the latest information on all these accounts. And yeah, that number needs to be displayed in atleast 2 currencies Most of the products out there work well for investments in USA but suffer if you get out of the country.
e) Fancy Schmanzy - This is all those graphs and charts which should always show that my networth is increasing and I have no debt (crossing fingers ) . Achieving this in a home grown system is not impossible but I have realized that I will never know all the features of Microsoft Excel and in fact, do not want to. So pictures are in and any software that can do that with my numbers gets a vote.
f) Setup / Maintenance Time - Since I need to work on this blog (a lot !), software that has a great degree of automation built in helps. Setup time needs to be low. I need software to automatically connect to my accounts, download information and refresh all my balances. My maintenance activities should be restricted to looking at reports and updating my budgets.
Finally, these are the things i can live without in my software:
- Social whatever - I prefer reading personal finance blogs for saving and investment tips. Being a compulsive reader, I know that the quality of advice and interaction in the blogosphere is greater than any other single website can give me.
- Email/SMS notification - SMS is very costly and I hate reading stuff in small screens. And since I am connected to the internet 24*7 and battling with information overload, I would prefer one less email in my inbox.
- Latest and greatest - I still haven’t understood why many popular software products are updated every year. I can understand fixing of security bugs but at what point do you realize that it is software and NOT BLOATWARE? It is ok for me if the IRA contribution limit for the current year is not there. I can get the information online and I can update the value manually.
