There’s been a lot of discussion lately about web-based personal finance tracking tools, especially since Intuit launched Quicken Online and Mint won the TechCrunch 40 award. These conversations have led in many directions – clearly these tools are useful, but are they worth the security concerns? Let’s take a look at what these tools have to offer and what the security implications are, and I’ll offer up my own take at the end.
What Do These Tools Do?
In a nutshell, Quicken Online, Mint, and Wesabe seek to provide centralized perspectives on your personal financial situation. They do things like categorize your credit card and checking spending into groups like “hobbies” and “food,” keep track of your net worth over a long period, and can even help you define and work towards goals. They aggregate your information automatically, helping you to see your spending and saving across all accounts at once. In other words, they’re all pretty nifty and offer some serious benefits.
Having tried all three, I found Quicken Online to be the most usable and useful – but that may be because I am familiar with the desktop version of Quicken. Basically, Quicken Online is a web-based version of the classic Quicken software package. It collects information from all of your accounts and lets you review it in countless ways. You can set up goals, view the changes in your spending and saving over time (as you build up the data), and even helps you manage the lag between issuing a check and having it received by the people you’re sending it to. It’s easily the most feature-rich of the three and it’s ad-free, but it’s also the only one with a fee – $2.99 a month. Out of the three packages, I’m partial to this one – if I were to commit to using one of the three wholeheartedly, it’d be this one.
Mint is probably the most visually stunning and intuitive to use, but it’s also the one that makes me the most nervous about security. Mint offers many of the same services as Quicken Online, but without a fee – instead, they target you with very specific ad offers based on analysis of how you actually spend your money. If I was having trouble getting my finances in order, this would make me somewhat nervous, as it seems to be tempting fate. Still, their interface is stunning and, minus the offers, is probably the most useable of the three.
Wesabe is the most established of the three, is also free, and is likely the most secure. They never take any of your account information – instead, you use a tool on your own computer to build a report without account data in it, and this report is shipped off to Wesabe. They never see your specific account data. Also, they don’t mine their data to place targeted ads – instead, their business model revolves around selling “Pro” accounts with more features. It also has a lot of social networking aspects – you can quickly find people with similar financial goals and find out, in a broad sense, how your spending compares to the Wesabe community. It’s actually quite fun.
The Big Drawback
First of all, I don’t question that each of these sites have integrity when it comes to security. In fact, Wesabe was the first of these three tools to launch and I strongly criticized their security initially – and was pleasantly surprised by the openness of the company to discuss and resolve these issues. I believe that Mint, Wesabe, and Quicken Online all intend to keep your data safe.
But that doesn’t solve the problem.
The problem is something I like to call “information creep.” When you use these tools, you expose your personal information to them. With Mint, for example, you transmit your account information through mint.com and then through Yodlee to aggregate your info. Intuit (the Quicken Online folks) communicates directly with your account providers to scoop in information. Wesabe is perhaps the least onerous – you don’t directly submit account information to them, ever – but their tool isn’t as robust because of this limitation and they still do create a history of your spending.
In all three cases, you’re building up a substantial data set about yourself. With Quicken Online, they don’t milk the data (at least not on the surface) but you are charged a fee for their service. With Mint, it’s free – but they make their cash by showing you targeted ads based on that data. Again, Wesabe has the best method at the moment – they’re currently handling everything via venture capital money and plan a “Wesabe Pro” to generate revenue.
If that doesn’t concern you, consider this: the more information you have out there about yourself, the more likely it is that some sort of identity theft will happen no matter how secure individual sites are. It only takes one little accident for your data to get into the wrong hands – and even the most secure of places can have a little flaw. The more places you put your data, the more “little flaws” you’re exposed to.
What Do I Do?
I think tools like Quicken Online are great if you have a plethora of accounts to manage and have a hard time seeing the big picture. In that case, the benefits exceed the drawbacks – tools like these can really help you get a grip on things.
In my opinion, though, it’s not the best solution. The best solution is minimizing your accounts so that you’re not bogged down in account management. Do you need eight credit card accounts? Kill the ones you don’t use, save for perhaps your oldest one, and try to get down to two or (at most) three. How about five different retirement plans? Roll them together if you can – spend the time to see what your best option is and you’ll find yourself with a lot less effort to manage accounts.
Right now, I have one checking account, one savings account, two credit card accounts, one investment account, and one retirement account. It’s simple enough that I don’t need to use a tool like Quicken Online to see all of this information, and I don’t spend much time with account management either. I keep my net worth calculations in a spreadsheet – and it’s pretty clear from that data whether I’m doing well or doing poorly.
If you keep things simple to begin with, you don’t need complex tools to manage it. Quicken Online, Mint, and Wesabe are nifty tools, but you can often get just as much benefit by just simplifying your money – and then not expose yourself to even a tiny security risk, monthly fees, or highly targeted ads.
I felt it appropriate to include some additional viewpoints on these products from other blogs that I trust.