Personal Finance 2.0: A Wealth of New Web Apps

Using the Web to manage your money used to mean logging into a plethora of banks and other institutions to check balances and maybe pay bills. Now various next-generation Web services are building on these basics by offering one-stop account tracking plus tools and advice to help you stick to a budget, reach financial goals, or cope with money problems.

Services such as Green Sherpa, Rudder, and Thrive target younger folks who are new to money management and are comfortable giving a third-party service access to their online account information, but who have little interest in traditional desktop tools such as Intuit's Quicken and Microsoft's Money. These services join pioneers Finicity (formerly Mvelopes), Mint.com, Wesabe, and Yodlee in providing so-called account aggregation, meaning that they can download information from multiple online accounts and use it to create a unified picture of your finances.

All of them also provide at least some means of categorizing transactions (sometimes automatically) to help you figure out where the money is going. But they differ in how they try to help your financial situation and whether they're supported by fees or by referrals and ads.

Green Sherpa, for example, plans to charge $8 a month ($6 if you prepay for a year) for tracking accounts and for projecting what your finances will look like in the future based in part on downloaded historical data and on your own projections for expenses and income (say, a major vacation or a fat bonus check). Green Sherpa's Sharing features make it one of the first personal finance apps where you can chat with someone--a spouse, a CPA, or a financial planner--while both of you view your financial data.

I was not allowed to access the private beta, but Green Sherpa expected to launch by the time you read this.

Virtual Advisor

Loudwater Labs' Thrive service does not envision charging for what founder Avinash Karnani describes as automated financial-advisor services. Thrive uses downloaded data to come up with a numerical rating for your financial health based on factors such as how much you are saving and spending, and whether you're getting the best return on savings, or paying the lowest possible interest for credit cards.

Thrive plans to make money from referrals to institutions that offer better rates (though Karnani says the referrals will not be influenced by its marketing partners). Thrive also calculates several what-if scenarios--for example, how long your savings would last if you lost your job, or retired at age 67--and offers to create plans to deal with such eventualities.

Rudder provides a snapshot (via e-mail, at your option) of account balances, what bills are coming due, and how much money you'll have left after you have paid the bills.

Rudder's Web site is based on widgets: The account balance, bill, and what's-left widgets are preinstalled, but you can add widgets that track spending and savings, too. Rudder hopes software developers will create new widgets. Like Thrive (and Mint.com), it plans to make money through referrals to financial-services providers.

All of these services look promising, but the versions of Rudder and Thrive that I tried out have limitations: Most notably, they base their conclusions on data that may be incomplete or lacking context (for example, they offer no good way to track cash expenditures). Because Rudder doesn't yet let you enter a second income, it's unsuitable for a two-income household.

Mint.com still sets the standard for free services, with new investment features and support for custom categories. Fee-based Finicity has added community and editorial content.

And a growing number of mobile tools cater to users who are more familiar with phones than PCs. Quicken had better watch its back.

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