What’s Wrong – And What’s Right – With Wesabe

On Friday, Wesabe was launched to the public. For those unaware, Wesabe is a community-based (meaning similar to flickr or 43things) personal finance site that allows people to track financial information and share money ideas. From their extensive:

Wesabe is a community of people who share our experiences with our money so we can help each other make better financial decisions. We do this by aggregating and analyzing our community members’ personal financial data, and showing tips — recommendations to get the most from our money. These tips and recommendations come from the collective wisdom of our entire community. When one of us figures out how to make a great decision, we all learn.

I could go on and on about the features of Wesabe, but I’d just be repeating the content of this excellent introductory post on Get Rich Slowly. If you’re more of a visual type, just visit Wesabe.com.

At first, I thought Wesabe was a brilliant idea: it basically utilizes the community concepts embedded in many of the best websites around (like reddit or 43things, two personal favorites of mine) and applies it to personal finance thinking. That initial rush made me feel much like Matt Haughey does about Wesabe: it really is an amazingly cool tool.

But then I played around with the site for a while and I came away with a bit of a funny taste in my mouth.

First, for a site that requests a lot of personal data from you, their privacy policy leaves a lot to be desired. From their privacy policy:

We may use personal information to provide the services you’ve requested, including services that display customized content.
We use aggregate and non-personally identifiable data to provide the broader Wesabe community with information to make better decisions.
We may share aggregate data with third parties outside of Wesabe.
When we use third parties to assist us in processing your personal information, we require that they strictly comply with our Privacy Policy and any other appropriate confidentiality and security measures.
We may also share information with third parties in limited circumstances, including when complying with legal process, preventing fraud or imminent harm, and ensuring the security of our network and services.

Read those carefully. They are essentially saying that any personal financial data you give them will be (a) used to craft a profile of your personal financial habits which will then be (b) leveraged to create advertising that targets your very specific financial habits (meaning that the ads will be more tempting because they strike directly at your real money uses), (c) sold to third parties as long as they “strictly comply with their privacy policy,” and (d) immediately handed to unspecified third parties for unclearly specified reasons. They also provide no specifications on their methods of data security.

I don’t know about you, but having my financial data bandied about in such a fashion really frightens me. The only electronic personal finance data that I keep is encrypted and behind a firewall. I have little interest in allowing unspecified third parties to have a heyday with my data.

Second, the other sections of the website are essentially reproductions of digg and (especially) 43things. Although the entire site has a personal finance bent, the actual features provided are duplicates of features from other sites with a tweak or two.

The only real novel twist also worries more than it excites me: aggregate spending data. The site is able to give aggregate data on spending over all users so that you can see what you’re spending on certain things compared to a community consensus, but all that tells you is how much more or how much less of a consumer you are than other people using the site. If you’re really interested in improving your personal finance, your time is better spent with a real budgeting tool, determining what specific areas of spending you can cut down on, not comparing your spending to other spenders and simply feeling good because you spent less on beer this month than 27% of other Wesabi users.

Third, even the non-sensitive portions require an account, unlike the other community-based sites. Non-users can’t visit some of the sections that would be interesting to the general public, like the section that lists the most popular personal finance tips. You can’t tour the site in any fashion (outside of the video above) without signing up for an account; it was that reason alone why I signed up for a test account, simply so I could explore the options.

That being said, there are many good features of Wesabe. Of particular use are the tips and goals sections; the former has a digg-like interface that allows people to contribute personal finance tips and vote up the tips of others, while the goals section is very similar to 43things: it allows you to add goals, assign goals others have created to yourself, and discuss the goals in detail, again all with a personal finance bent. These parts of the site are intriguing and don’t require you to reveal specific personal financial data. There are also many aspects to the money management portion of the site that are intriguing, but I am hesitant to explore with real data due to my concerns with privacy; I would love to dig into them with real data, but for now I’m sitting them out.

If the creators of Wesabe read this, I have a couple of suggestions that could turn this from a merely intriguing site into an essential personal finance site. First, make the privacy policy extremely detailed and comprehensive. People who are really interested in personal finance (i.e., potential leaders within the community you are trying to build) are often very concerned with data privacy. Our passion is money management and one of the basic precepts is being careful with that money; we don’t like to hand out our data without some strong assurances about what will happen with our data. This is especially true for you, as a completely new entity without a track record of data security.

Second, make it possible for people to at least browse the tips and goals sections of the site. For outsiders who want to dip their toes in, these are fantastic tools for convincing people of the power of the community, but you keep these tools hidden from non-users. Look at the approach of digg or 43things; they don’t require signup for people to enjoy the non-sensitive content of the site, and this openness has propelled both sites into the general web consciousness. Such secrecy is just preventing people from diving into the site.

Given all this, I still think Wesabe is worth a whirl if you don’t provide any real personal data to the site. It’s useful for looking at tips and goals of others and contributing your own non-specific tips and goals; the only thing hindering this from becoming very useful is a relatively small userbase, which will likely grow in the future, as they’ve got Matt Haughey extolling their virtues and he is often ahead of the curve when it comes to spotting breakout communities.

Trent Hamm
Trent Hamm
Founder of The Simple Dollar

Trent Hamm founded The Simple Dollar in 2006 after developing innovative financial strategies to get out of debt. Since then, he’s written three books (published by Simon & Schuster and Financial Times Press), contributed to Business Insider, US News & World Report, Yahoo Finance, and Lifehacker, and been featured in The New York Times, TIME, Forbes, The Guardian, and elsewhere.

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