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Personal Capital Review-The Easiest Way to Track Your Spending

Personal Capital

Budgeting

Personal Capital Review-The Easiest Way to Track Your Spending

Accurately tracking your spending and income can be very difficult when you want to plan for the future. In this Personal Capital review, you will find out how you can track your finances and plan for the future with a free online program. And, it’s less stressful than making a traditional budget.

What is Personal Capital?

Since its founding in 2011, Personal Capital has often been hailed as one of the best money management apps. Today they have 1.3 million users and $312 billion in tracked assets! It is a free service that specializes in tracking your spending, income, and investments to calculate your total net worth for free. An optional, fee-based service is to have Personal Capital manage your investment portfolio.

The founder of Personal Capital, Bill Harris, is the former CEO of Intuit (Mint & Quicken money management apps) and PayPal. These are two “household names” in the personal finance software sector. With Personal Capital he wanted to create a holistic financial planning for users to realize their financial goals.

How Personal Capital is Different Than Other Money Management Apps

You might be wondering how Personal Capital is different than all the other money management apps. Here are a few of the highlights:

  • It’s Free!!!
  • Tracks All Your Bank Accounts, Credit Cards, Investment Accounts, and Other Assets
  • Lots of User-Friendly Graphics
  • Excellent Retirement Planner

Personal Capital vs Mint

Personal Capital’s largest rival is Mint, which also tracks your finances free. If you want to create a monthly budget, Mint is the clear winner in that area. Otherwise, Personal Capital is the better app overall. And, since Personal Capital doesn’t rely on credit card and bank account sign-ups like Mint does, you won’t be bombarded with recommendations for the best credit cards or savings accounts.

This is for two primary reasons. First, because Personal Capital will automatically link to most bank accounts and credit cards (just like Mint), but, you can also manually add bank account information, the value of your house and other assets, and any other bills you might have (Mint doesn’t allow you to manually input information). Secondly, Personal Capital is easier to use and has many awesome graphs to understand your finances.

Pros of Personal Capital

You will like Personal Capital if you meet any of the following criteria:

  • You want to track your finances all in one place including investments
  • Like to the “Big Picture” of your finances
  • You don’t want a traditional budgeting app (i.e. Mint, Quicken, You Need A Budget)
  • You want to track your finances from your laptop or by using a mobile app
  • Receive weekly spending & net worth assets

With Personal Capital, you can track your finances in several different manners.

Track Your Net Worth

Personal Capital Review

The main reason most people use Personal Capital is to track their net worth. In fact, it’s the first graphic you see when you log into your account. By linking your bank accounts, investment accounts, credit cards, and also including the value of your house, car, and any corresponding loans, Personal Capital will update your net worth daily.

Instead of logging into your bank and investment accounts at the end of each month, your net worth figure will update every time you login to Personal Capital. If the “Big Picture” is what motivates you to save money, it doesn’t get much easier than this.

Cash Flow Analyzer

Personal Capital Review

Personal Capital doesn’t have a budgeting feature like a few other money management apps, but, it allows you to track your spending. If you don’t like to budget or budget on pen & paper the Cash Flow Analyzer is great. It will still allow you to see if you are spending less than you earn and tracks your spending by budget categories such as groceries, mortgages, gas, etc.

Analyze Investments

Personal Capital Review

One of the features in the Personal Capital Investment Portfolio Analyzer

What helps set Personal Capital apart from other money management apps is the opportunity to analyze your investments. This is especially useful if your personal investments are at a different brokerage than your 401k or other retirement accounts. Yes, each brokerage will allow you to analyze the investment allocation and fees paid for all your accounts in one place.

This makes it easier to see if your current investments are consistent with your target investment portfolio & to also see if you have overlapping investments or can reduce expenses in another investment account you hold.

As fees can greatly affect the overall balance of two portfolios with similar rates of return, Personal Capital helps you predict the future value of your total portfolio at retirement factoring a normal rate of return and fees.

Retirement Planner

Personal Capital Review

You might be fearful of saving enough for retirement. Personal Capital’s Retirement Planner runs 5,000 simulations to project the probability that you can afford your desired spending goals with your current financial habits. The Planner can also help show you how to save more (if necessary) and will also calculate your projected net worth at retirement and your post-retirement years.

Cons of Personal Capital

Unfortunately, Personal Capital isn’t a perfect app. These are some reasons you might not like Personal Capital:

  • Not a “true” budgeting app to help you maximize your spending power
  • Budgeting is a bigger priority than determining net worth
  • Personal Capital has some “bugs and glitches” and can’t link to every bank account

If you need an app to create a monthly spending plan (budget), you are better off using an app like Mint or You Need A Budget. Personal Capital can track your spending, which is part of the equation to living within your means, but, it won’t help you allocate your paycheck to spend 10% for retirement, $500 for groceries, etc. If you already have a monthly budget or simply want to ensure you spend less than you earn, this isn’t a deal breaker.

On the technology front, Personal Capital has few bugs and glitches than it used to, but, it still cannot connect to some financial accounts with extra security layers. This issue is common to nearly every money management app. You will need to manually input the information if you want to accurately track your spending and net worth.

Closing Thoughts

Personal Capital is one of the easiest ways to track your spending, net worth, and project your future net worth. The ability to automatically link to financial accounts or manually input information is part of the reason. While it would be nice to have a more robust budgeting feature to be a true “all-in-one” money management app, Personal Capital can easily be the only app you need to track all your financial and investment activity to accomplish your financial goals.

 

 

 

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