Money Wise, Safety & Security

Free Money Trackers – What’s the Deal?

I’ve noticed a wave of websites just dying to offer you free personal accounting services.

By linking all your accounts – checking, savings, credit cards, loans – you can see your complete financial snapshot in one place.

Let’s take a closer look at this concept – what’s in it for you, what’s in it for them, is it safe, and more.

For example, LearnVest’s “Financial Inbox” tool is free. All you need to do is…

What Are the Benefits?

Once all your accounts are linked (a one-time task) and your transactions are fully organized into folders (an on-going task), here’s what you can do.

  • Better understand your spending habits, which can help you budget and stay on track towards financial goals
  • Automatically calculate your net worth
  • Review credit card charges for accuracy, all in one place

Is This Safe?

Sounds great – but is it safe? After all, you’ll be required to enter your user name and password for each bank account that you link.

Most of these services are limited to a one-way pull of bank data to provide the snapshot of your financial life. There is no ability to withdraw or move money around. Which leads LearnVest to make claims like “there’s zero risk of someone logging in to your LearnVest account and touching your money”.

Potential Risk

While that may be true, remember that they do have your name, address, bank account and credit card numbers, detailed transactions, and more. All that amounts to a real goldmine for potential identity theft. And even if the primary company is trustworthy, you are also trusting their extended infrastructure of service providers as well.

Worthwhile Precautions

Overall I think the risk is acceptable, and I’m considering (launched in 2007) as a central accounting tool for a charitable organization I help run. The online accessibility would be an added benefit to our group’s multiple users. As always, if you decide to go this route, protect yourself with these best practices:

  • Choose a strong password and change it periodically
  • Consider a credit monitoring service (for a small fee you get immediate alerts for any activity recorded to your credit report)
  • Be aware of the risks

How Do They Make Money?

Almost across the board the two dozen or so online money trackers out there are free to the user (that’s you). How then, do they make money?

  • Selling advertising on the site
  • Building a database of consumer spending habits, then selling that data to companies that use it for market analysis
  • Using your financial history to determine targeted offerings just for you – and making a commission from the vendor when you purchase the deal

Mint, for example, touts its “proprietary search algorithm that finds savings opportunities unique to each user”. If you’re interested in deals sent directly to you, you might see this as a benefit. For me, I prefer going to the broader Internet or better, my personal network, to research financial products and get recommendations. All businesses want to make money, and only you have your best interest in mind.

The Bottom Line

Understanding your spending patterns and closely monitoring your financial accounts may help you stay on track towards meeting financial goals, as well as catch possible fraudulent activity more quickly.

One option is a free online service like Mint or LearnVest. Expect targeted advertising and be aware of the risks of sharing your banking data online.

Another option is personal accounting software like Quicken (which offers an online option well) or iBank for Mac. While not free, the cost of ownership is relatively low, the password is stored and encrypted on your own computer, and the software provides much more sophisticated management tools and reports than the online options. If you’re already using one of these, I would stick with that.

Of course you can always go analog; try printing this free spending chart over at Amy Suardi’s Frugal Mama. I love her blog, where she writes about saving money and making life better.

Whichever the method, I’ve been tracking our family expenses for almost five years now and it is a powerful tool for keeping us in line, plus a huge time and stress saver come tax season every year! If you track your spending, what tools do you use? Do you use an online money tracker – how is it going?


  1. Amy Suardi @ Frugal Mama

    11/03/2011 at 5:07 pm

    Hey Samantha,

    Thanks for the shout out! I am just about to roll out a new fun version of my daily spending chart, and readers will be able to find it on my Printables page.

    Thanks for this helpful information. I had not known about iBank, and I always appreciate apps made just for the Mac.

    One program I am trying out and liking very much is Outright. It’s accounting software for small businesses and was recommended by the Mogul Mom:

    Re tracking spending: I think it’s a very important habit for anyone who wants to get a hold of their finances. My husband and I have been writing down every penny we spend since the early days of our marriage, when we couldn’t understand who was spending it all and on what.

    It turns out that no one was ferreting away designer bags. Certain things are just expensive — like food — and then there are those surprises (that happen every month) like the dishwasher that breaks or some weird tax that comes our way.

    We love to write ours down on paper — it’s fast and easy, and the visibility helps us see the big picture. However, people should use whatever method that they will stick with.

    Thanks for the new ideas, Samantha, and the information about advertising on these financial sites.


  2. Amy Suardi @ Frugal Mama

    11/08/2011 at 1:04 pm

    Hey Samantha,

    Just wondering: what tracking method do you use?


    1. Samantha

      11/08/2011 at 6:25 pm

      I use iBank. It’s got some quirks, but I’m familiar with them and the tech support is good. I’ve reported bugs and received personal replies via email. Plus I honestly don’t think any accounting software is perfect. Most of my accounts download automatically, and then I review and apply categories to any transactions that don’t fall under an existing rule (Boston Market = “Dining Out”). The exercise has shown us the same truisms you found – no one is buying Prada bags, life is just expensive. That and there is always an “unexpected” expense. If you go with iBank and have questions getting up to speed with it just ask me!

      1. Amy Suardi @ Frugal Mama

        11/10/2011 at 1:35 pm

        OK, got it. Intrigued by iBank because I love Mac programs. I’ll check it out and maybe use it for budgeting, since I really love my paper for tracking spending. Glad you come to some of the the same conclusions. 🙂

        1. Samantha

          11/11/2011 at 6:02 pm

          Interesting, I use iBank to track spending, but I don’t create budgets. It might be more software than you need if you are just looking for budgeting help. Just came across this free online budgeting tool which might be worth a look.

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