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Monday, September 17, 2018

Online Budget Planners Save Money and Time

Money manager apps can make your life easier. We take a look at several different managers and tell you which one we think is best for various tasks.

Do you still sit down with a pencil and a sheet of paper to make your budget, calculator at your side? Have you thought about switching to one of the computerized budget systems, but figured it would be too much of a hassle, or no better than your old system? Think again.

There are various free or inexpensive tools and apps to help you pay your bills, save money or even plan and maintain your personal budget and track your investments. Thanks to online banking, they’re quick to set up and easy to use. Plus, they have an array of security features you can view.

Whether you’re a seasoned pro at managing your money, or a newbie taking control of your finances  for the first time, an online money management system will make your life easier. These tools are a whole lot simpler than trying to fill in a spreadsheet by yourself, and the pages are already set up. 


Our overall winner is the wildly popular (for good reason) Mint. It performs a broad variety of tasks with minimal hassle for the user. 

Billed as a “personal financial management service,” Mint can import all of your bank and brokerage accounts in one place, as well as monthly bills (such as utilities, rent or mortgage) and various sources of income. You create a picture of your income streams (required minimum distributions, Social Security, small jobs, consulting, etc.) and also your anticipated monthly expenses. 

Mint enters your expenses from credit cards and bank withdrawals, cashed checks and online payments. They automatically appear in a related category, which you can change if needed. For instance, it wasn’t groceries you bought at the supermarket, but gas for your car. It’s easy, and you can tell Mint to always place something in a particular category, such as ongoing payments to a local clinic as “charity” instead of “health care.” 

In the Overview tab, Mint shows your financial health in a snapshot. On the left are bank accounts, brokerage accounts and the net worth of your car and home (regularly updated with a number from Zillow). Financial accounts are updated every time you log in. Bills and your current credit score are in the middle, and on the right you’ll find a line-by-line picture of your budget, with a vertical stripe indicating how much of the total allotment you’ve already spent. 

It’s simple to eyeball your budget for overages and savings. If you’re under your budget on any item for the month, it appears in green. Meet your expected expense, and it appears in yellow. Go over, and see the result in red. If you spend $20 on a category where you’ve budgeted $60, a third of the grey line will fill with green. 

Mint boasts a robust platform. Your credit score is enhanced with six categories, broken out to show how much they impact your score, how you’re doing in each and what you could do to improve. Reporting is another win for Mint. A colorful pie chart breaks down spending in every category for any period you choose. Not sure you’re claiming all your business purchase deductions? Click on that category for the year to double-check. Wonder if you’re really spending more on pedicures now than three years ago? Check it out. Caveat: Mint only knows what you’ve been spending since you’ve been using Mint. It can’t retrieve previous information. 

One more feature sweet as tea in Georgia is the one that allows you to save for specified long-term goals. Maybe it’s a savings account for your granddaughter’s college education, or a trip for you to Prague, or both. Enter them in the goals budget, and Mint will tell you how long it should take to achieve each. Save more or less, and Mint tells you how you’re doing. Your goals appear in a box on the budget page that automatically lists the monthly savings needed as expenses, so you’re not tempted to cheat. 

To top it off, Mint is absolutely 100 percent free. It works on the web, Android and iOS, so you can always access your account. Security with the data you’re sharing is tight; you can read about how Mint protects your information here. It can even handle two-factor authentication.

Mint is dang good, but it’s not perfect. What’s not to like? While it is a broad program that is easy to use, it’s barely supported. It claims it offers email support, but feedback from users is doubtful at best. Mint was acquired by Intuit (think TurboTax) in 2009, and since then techies bemoan the difficulty entailed in getting a response from the company. This means that if you encounter a problem, you may need to paddle your own way out. And innovation has come to a virtual standstill since the buyout. But with millions of users, it’s likely you’ll sigh with relief every time you launch the program and know you don’t have to check in with every bank, broker and biller to know your financial health ever again.


Can You Trust the Credit Score on your Budgeting Service?

Budgeting tools such as Mint show you what they say is your credit score, and even update it automatically. The score impacts how much you’ll pay to finance a car or get a home equity line of credit (HELOC) for home improvements.

With so much riding on it, we wondered if it’s the same score you’d get by asking the big three credit companies, Transunion, Experian and Equifax. Everyone is entitled to a free annual report from the companies to monitor any false reports or information that’s out of date.

“The score that Mint provides is a VantageScore or an Experian Score, which are competitors to FICO,” according to Thomas Eyssell, associate dean and director of graduate studies in the Department of Finance and Legal Studies at the University of Missouri – St. Louis. “The VantageScore and FICO scoring algorithms are somewhat different and can provide different scores.”

In fact, Eyssell suggests, the systems have five basic differences.

  • Scoring. Although both gather similar information to determine a score, they collect it in different ways.
  • Requirements. If your credit history is short (under six months), you won’t have a FICO score, but you may be able to prove credit worthiness with your VantageScore.
  • Late payments. FICO treats all late payments the same, while Vantage dings you harder if you were tardy on the mortgage.
  • Credit inquiries. Say you’re car shopping, and several dealers have made hard inquiries into your credit worthiness. Both FICO and VantageScore bundle these inquiries (which count against you), but FICO uses a 45-day period, whereas VantageScore only allows two weeks.
  • Low-balance collections. FICO ignores unpaid balances under $100. VantageScore doesn’t overlook any amount until it’s paid off.

As a researcher in credit score accuracy among older adults, Eyssell recommends ordering the annual credit report as a precaution. His studies show that many seniors have inaccuracies on their credit reports they never suspect.
Email support is standard on the free EveryDollar platform, or you can pay $99 a year for their Plus service that comes with a phone call from a real person. 

EveryDollar is the birth child of vaunted money manager Dave Ramsey, he of the frugal habits and aversion to debt like it’s radioactive. So it’s a bit surprising that you can buy the Plus version with a credit card, and link either platform to credit accounts. Maybe Dave saw the light of cashback cards, every tightwad’s friend when they are paid off monthly. At any rate, you can connect all of your financial accounts to EveryDollarPlus. However, they’re not on the main screen. 

The initial release of EveryDollar is sparse on reporting features. That may change with future versions as users provide feedback. Where EveryDollar shines is in the ease of its budgeting tool. Broad categories and subcategories are listed on the screen for you, so you scroll through without failing to account for Rover’s annual vet visit or Susie’s trip to the dentist. All you have to do is punch in numbers to get your budget in place. There’s also a place for income, so money coming in and money going out appear on the same page. Can you do it all in ten minutes like the site claims? Yes, according to the majority of users.

One other way EveryDollar beats Mint is in the quality of its design. Maybe it’s just because Mint hasn’t had a facelift in so long, but EveryDollar has a fresh appeal that you may find engaging. On the other hand, many of us resent it when a “free” offer lures us into its costlier cousin. It’s hard not to think that at $99 a pop every year, Ramsey is the big winner here.

You Need A Budget (YNAB)

At $5 a month or $50 for a year, you’ll have to put YNAB in your budget expense category. For those who favor a very hands-on approach, the cost may be worth it. YNAB claims that it can help you find money you may have missed, because it forces you to categorize every expense yourself, rather than doing it automatically like Mint. 

Each day (or however often is necessary), you’ll import and assign a tag to each expense. The idea is that you’ll stay focused and disciplined because you have to account for every dollar. YNAB is also serious about protecting your data, and you can find their security protocols here.  

YNAB doesn’t anticipate monthly expenses like Mint does. Instead, you start with how much money you currently have and then begin importing transactions. The app will only import them for you if you ask it to. The basis of YNAB is a zero-sum budget, accounting for every last dollar. It may be a good choice for someone having issues with regularly going over budget. Rather than anticipating your budget, YNAB takes it a day at a time and forces you to make adjustments as you go. Mint allows you to track expenses with minimal effort after setup, while YNAB buries your nose in every expense. 

YNAB has a tool to help you save for goals, but it works a little differently than the one in Mint. For YNAB, you choose one of three options: saving a specific total amount, saving enough to achieve your goal by a certain date, or choosing an end date and goal amount to allow YNAB to tell you the amount you’ll need to save per month to succeed. This sounds doable until you realize YNAB won’t, say, automatically calculate the dollar amount of interest on a credit purchase you’re paying off. 

Another difference between YNAB and Mint is their focus. Mint shows you your total financial status, while YNAB focuses like a laser on your monthly budget and spending. YNAB won’t show you your credit score, nor will it tabulate your net worth or value hard assets such as real estate or a car.

Like Mint, YNAB works on various platforms, including the web, Android and iOS, so you can access it from a desktop computer, laptop or your smartphone.

Click below for the other articles in the September 2018 Senior Spirit

Blog posting provided by Society of Certified Senior Advisors