Slide Show | August 2012

Which Budgeting Site Is Best for You?

As the economy continues to sputter -- along with the balance sheets of many families -- the Internet has supplied an abundance of online tools to help repair the damage. We've scoured the offerings and chosen our favorites for a variety of money-management styles.

Each site offers its own brand of budgeting tool and tracks your cash flow by collecting your financial information in one place, providing access to your complete financial picture anywhere you have Internet access.

To maximize their benefits, most require that you link them to your financial accounts by providing your online user names and passwords. This sharing might sound risky, but none of our favorite tools has experienced security problems. BudgetPulse.com does not ask you to supply your private data. The rest of our picks guard your information from hackers with bank-level security; they encrypt your user names and passwords, meaning they cannot be viewed anywhere in plain text without a key. Even if your account were hijacked, intruders would not be able to execute any money moves because the sites access your financial accounts on a read-only basis.

No matter what your personal finance style, one of these online money-management tools will help you stay in control.

Which Budgeting Site Is Best for You?

Mint.com: Best Overall Site

In general, Mint has gotten better with age (save for a few hiccups during the ownership transition period). It has improved original features and periodically added new ones, including the popular budgeting tool. On your budget page, you can add sliding bars -- each bar represents an expense category you want to track -- and set dollar limits for how much you can spend within a selected timeframe. Mint even starts you off with a recommended amount based on your spending history. Your budget bars fill up with each transaction you make; as they approach the limits, they go from green to yellow to red.

Elio Rutigliano of Oakland, Cal., first opened a Mint account about two years ago after being disappointed with Quicken’s budgeting features. “Mint.com is so much cleaner and easier to use,” he says. One of his favorite offerings on the site is the goals tool, which allows you to set a target amount and date to achieve a specific goal, such as building an emergency fund, paying down debt or retiring. You assign an account to your financial destination, and the tool tracks your progress.

One weakness: The investment tracker can’t determine the asset classes of many investments, making its reading of a portfolio’s asset allocation practically useless. (Yodlee also offers an investment tracker that has the same weakness.) Intuit’s TurboTax is supposed to allow non-Mac users to import information from Mint for tax-filing purposes. But dissatisfied users stormed the support forums this past filing season because they were not able to do so. Intuit says the updated version of TurboTax resolves the issue.
Mint.com: Best Overall Site

ReadyForZero: Best for Debt Diggers

Co-founders Rod Ebrahimi and Ignacio Thayer have found that the more-active users of ReadyForZero.com are able to pay down debts twice as quickly as more-casual users. In fact, Ebrahimi’s girlfriend, who was his muse for creating this site, has managed to pay off two high-interest-rate credit cards over the past year.

Like most other budgeting sites, you start by linking your financial accounts. Then you create a debt-repayment plan based on what you can afford every month or the date you plan to be debt-free. The site will also show you how much you’ll pay in interest, as well as how much time and money you’ll save compared with making only the minimum payments.

ReadyForZero tracks your progress and recommends some steps you can take to help you clear your debts. For example, the site suggests contacting your credit card companies and adjusting your payment due dates to sync better with your cash flow. You can also choose to receive notifications about due dates, rate changes and any opportunities the system notices for you to make additional payments, such as at bonus time.
ReadyForZero: Best for Debt Diggers

LearnVest: Best for Financial Newbies

LearnVest’s Money Center is new, improved and ready to provide you with truly personal financial advice. Your budget tops the account “dashboard” and breaks down your monthly spending into three major categories: essentials (such as mortgage, rent, groceries and utilities), lifestyle (including restaurant dining, bar tabs and clothes shopping) and priorities (for example, goals of paying down debt or saving for retirement). LearnVest recommends spending 50% on essentials, 30% on lifestyle and 20% on priorities. With your current budget displayed alongside LearnVest's optimal budget, you can clearly see where you have room for improvement.

For further financial guidance, you can talk to an expert -- free. "Financial advice is not a luxury item," says founder Alexa von Tobel. "It should be available to the masses." A free financial checkup includes a phone conversation with a certified financial planner, who will evaluate your finances and offer some advice on what steps you can take next. If you'd like to get more professional assistance, you can sign up for one of LearnVest’s three premium memberships, ranging from $89 for three months of basic budgeting guidance to $599 for a year of investing advice. With these subscriptions, the planner will be able to view your LearnVest account with you and get into your financial nitty-gritty without any extra effort from you.

For more free resources, you can tap the site’s Knowledge Center, which is filled with articles, personal finance basics, and helpful checklists and calculators. It's geared toward women, but, says von Tobel, “It doesn’t matter if you’re male or female, young or old, educated or not. Most people’s questions about money tend to be the same.” You can also try LearnVest’s free Bootcamps, ten- to 15-day e-mail programs that guide you through various financial situations, such as getting out of debt, getting married or simply taking control.
LearnVest: Best for Financial Newbies

Mvelopes: Best for Over-Spenders

One classic budgeting strategy involves physically divvying up your cash and labeling each envelope with a spending category. Once an envelope is empty, that’s it -- no more money to put toward that purpose.

Mvelopes digitizes this approach to money management with great success. The site’s average user is able to cut spending by 10%, says chief executive Steve Smith. “You really start managing your finances instead of just reacting to things that happen on a monthly basis.”

With the free membership, you can link up to four financial accounts. If you’re hesitant to share your information, you can opt not to store it, but then you’ll be required to enter it every time you return to the site. Next, you create a spending plan and fund up to 25 envelopes. For $10 a month, a premier subscription allows you an unlimited number of financial accounts and envelopes. Plus, you get access to the site’s debt center and an in-house financial coach, who can advise you on basic money topics and how to use Mvelopes. Using the tool isn’t always intuitive; to get started, we recommend watching the site’s tutorials.
Mvelopes: Best for Over-Spenders

Payoff.com: Best for Game Players

If you want to have fun while you work on your financial goals, try Payoff.com. As with other online money-management tools, you link your accounts and can view all of your transactions in one place. But taking the focus off of the dollars and cents, the site's main attraction is its approach to helping users reach their goals. "Our site is meant to guide people from an aspirational perspective and reward their financial progress," says Scott Saunders, co-founder of the company.

The site invites you to set up your goals, such as building an emergency fund, paying off a credit card balance or saving for a vacation. For savings goals, you detail how much you want to save and by when. For debt repayments, you specify your projected deadline. Then, you link your goal to your accounts. You can opt to allocate only a certain amount of your existing savings toward a goal. For example, if you've already accumulated $10,000 in one account, you can specify that only $5,000 of it is meant for that trip to Hawaii you're dreaming of.

The tool calculates how much you'll need to save each month to reach your goal by the date you chose. As you get closer to this financial win, you'll be awarded badges (think digital scout patches for your online financial sash) to celebrate your progress and motivate you to keep going. In the future, look for those virtual rewards to be accompanied by tangible ones, such as airline miles, says Saunders. Already, you can win $25 cash prizes from the company; winners are selected randomly each week from among users who have earned at least one badge that week.

The site forces you to focus on one goal at a time. You can line up future goals to tackle later, but if you're a multitasker, you might be frustrated by this feature.
Payoff.com: Best for Game Players

Yodlee: Best for Control Freaks

Before Mint was acquired by Intuit, the driving force behind it was Yodlee, which provided the technology that made its account aggregation services possible. With its own free site for consumers, MoneyCenter by Yodlee offers simple but effective services and tools. The default dashboard includes widgets to view your accounts and transactions, and to track your goals and spending. The budget tab is where you can set your monthly spending goals and generate expense and cash-flow reports. It even provides a tax center that, with the help of H&R Block, can help you spot potential deductions and estimate your bill for the year. You can import data from your Yodlee MoneyCenter and file your taxes using H&R Block’s online program.

But the main attraction of this site is that it lets you customize the dashboard to suit your own organizational whims. And you can drop in applications you pick up from the site’s financial app center. Currently, you have 56 fin apps to choose from, including a rewards program tracker and a mutual fund fee analyzer. The company plans to continue adding to its fin app collection.
Yodlee: Best for Control Freaks

BudgetPulse: Best for Security Cynics

Hesitant to share your personal banking information? You can still bring your budget online with BudgetPulse.com. To get started, import your information via financial statements from existing Quicken files or manually create your accounts.

Because you won’t be linking to your banks, you won’t be able to update your account automatically, as you could with the other sites on this list. You’ll either have to update your Quicken files and import them to your BudgetPulse account or enter each transaction yourself. So this site will be a bit more labor-intensive than the others.

Otherwise, BudgetPulse offers many of the same features as Mint, albeit in a much simpler display. You assign transactions to categories of your own making. Based on those categories, you can chart your spending trends. With the budgeting tool, you set a limit for how much you plan to spend on a selected category. And you can create goals with a target date and amount. You can even invite friends and family to contribute to your goals using Amazon, PayPal or other methods. The site will track your progress on your budgets and your goals.
BudgetPulse: Best for Security Cynics