Making a budget and sticking to it is a popular new year's resolution--and like so many others, the task is easier said than done. But if you're serious about managing your money, the Web continues to offer new sites and services that can help put your finances in order.
All are built around downloading and categorizing transaction data from banks and other financial institutions where you have online access to your accounts. Since all budgets involve setting spending limits for various types of expenses, categorizing transactions is key to helping you see where your money is going.
The sites differ, however, in the manner in which they present the data and in what tools they provide to help you set up and live by a budget. The latest features include spending recommendations based on your location, income, and other personal information, as well as mobile apps that keep you posted when you're not at a computer.
Here's a look at how five popular Web-based budgeting services perform.
Probably the best known Web-based personal finance manager is Mint.com, which in the wake of its acquisition by Intuit has become that company's online alternative to Quicken desktop software. Mint prides itself on its huge roster of supported financial institutions--some 15,000, according to founder Aaron Patzer--and its automatic sorting of transactions into more than 100 different categories. You can also create custom categories.
Mint analyzes transaction data to tell you where your money has gone in the past six months, and it uses handsome, slick graphics to illustrate how your spending stacks up against that of other people in your geographic region. It also has calculators to help you save toward specific goals; for example, it can figure out how much you'd need to sock away each month to have enough for a down payment on a house in three years.
As for budget creation, Mint, like other services, will suggest spending limits in categories you specify based on historical data. You're on your own for adjusting those limits, but Mint will work with you to hold to them.
"Most people have a few problem categories that they want to watch," Patzer says. To assist you, Mint can send alerts via e-mail, text message, or its iPhone or Android apps if you're approaching or hitting a spending target for, say, restaurant or entertainment expenses, or any other category you specify.
Pros: Has great graphics; automatically categorizes expenses; integrates with a huge number of financial institutions; mobile and e-mail alerts
Cons: Not great for identifying itemized deductions; the best you can do is create tags that identify the line-item transactions
One of the newer services, Bundle, focuses squarely on budgeting through a combination of features, including analyzing your recent expenditures and looking at demographic data to show how other people in your situation are spending their money.
You can specify the categories for which you wish to create budgets; Bundle will then show you the benchmarks it comes up with, which you can adjust as you see fit. I liked Bundle's categorization system, which by default shows only top-level categories but displays subcategories if you want to see them.
On the mobile side, Bundle's cutely named ViceTracker iPhone app can help you monitor splurges in real time, but it seems designed more for sharing your activity with friends via Facebook than for serving as a full-blown cash manager. Nevertheless, Bundle's graphics--both on the site and in the app--one-up Mint's by displaying your expenditures by category as appropriately sized, bouncing colored bubbles that you can click to view transactions.
Pros: Great graphics and categorization system; includes demographic data; iPhone app tracks vices
Cons: iPhone app more friendly for Facebook fun than for money management
Geekier users seeking robust mobile support might like Buxfer, another relatively young service. One of its more unusual features is that it can update your accounts through SMS text messages sent via Twitter. You must register your mobile device with Twitter to do this; you also have to learn a set of message formats that might stymie nontechies.
For example, you might send coffee 5.45 tags:drinks,coffee acct:amex in a message. Buxfer's translation: You spent $5.45 on coffee from your 'AmEx' account and want to attach the tags 'drinks' and 'coffee' to it. Other message formats let you check account balances, see how you're doing on budget targets, or report transfers or income.
If you prefer not to rack up text-message charges, you can send these formatted messages to your personal e-mail address at buxfer.com. Buxfer also provides mobile sites for the iPhone (i.buxfer.com) and for BlackBerry handsets and other smartphones (m.buxfer.com).
Buxfer calls its categories "tags" because you can assign multiple categories to a transaction. This feature can be useful, but it might also lead to confusion at tax time. For instance, I'd be worried about duplicating deductions.
You can edit the tags that Buxfer creates automatically (I had to change a good number of them), and then create rules for tags to save time with recurring transactions. In my tests, however, tag editing sometimes seemed to go slowly.
Buxfer also offers some unusual social networking features, intended to facilitate money transfers between friends or groups of people, such as roommates who share expenses. For those features to work, though, your friends or colleagues must also sign up with Buxfer.
The basic, free account is somewhat more limited than most: It won't track brokerage accounts or let you set spending limits for multiple tags without upgrading to a paid version. Fortunately the charges aren't too high, ranging from $2.79 to $3.79 a month.
I had some problems setting up my Charles Schwab checking account on Buxfer, probably because it's linked to a brokerage account (Buxfer kept sending messages saying that I needed to upgrade my account to one that supported investments). However, installing the free Buxfer Firefox add-on, Firebux, solved the problem.
Pros: Unique mobile features work with SMS and Twitter; social networking integration
Cons: Basic account somewhat limited; categories and tags might be confusing
Next page: Two more tools to keep your budget on track