-- Linda Stern is a freelance writer. Any opinions in the column are hers. You can follow Linda Stern's financial notes on Twitter at http://www.twitter.com/lindastern --
WASHINGTON - Is it time to move your financial life online? A crowded field of new and established websites promises to give you all the record-keeping and budgeting advice you'll ever need -- for free.
Meanwhile, the world of desktop personal finance seems to be getting less robust. Microsoft has decided to get out of the desktop financial software business, ending sales of Microsoft Money. That leaves Intuit's Quicken as the main player in that category, and Intuit has been putting more focus on its web and cell phone programs and less on its desktop software.
Folks dependent on the Microsoft program have a good reason to switch to one of the newer online services -- by early 2011, they won't be able to use any automatic downloading or updating features on their software. Quicken users may be in less of a hurry to migrate. In addition to the time they've already invested in filling that program with personal data, they have the security of knowing that their financial details remain on their hard drives, and not the world wide web.
But as more companies enter the online personal finance field, and older companies refine their programs, it grows more tempting. Some slice and dice your budgets in a way the desktop programs don't, and they make it easy. Most also support iPhone applications, so you can check your balances or add new expenses while you are on the go.
They are also becoming less threatening to folks already comfortable banking online. We are all using Internet standard bank-levels of security, says Avinash Karnani of LendingTree, which has just launched one of the newer sites, called MoneyRight, at http://www.lendingtree.com/moneyright.
Other players in the category include the most popular, Mint (http://www.mint.com), Quicken online (http://quicken.intuit.com/online-banking-finances.jsp), and Wesabe (http://www.wesabe.com.) Thrive (http://www.justthrive.com), another online personal finance site, was bought by LendingTree and will remain separate, but similar to LendingTree's MoneyRight program.
All of these sites work essentially the same way: You type in the bank name, account number and password info for your savings, checking and credit cards accounts, and the sites will pull that data together every time you sign in. They will tag, categorize, analyze and amass your data in ways that should make it easier for you to review and control your spending habits. But they all vary, and the site preferred by one person may not work as well for another, based on personal preferences and financial lifestyles.
One more warning: There's no guarantee any of these sites will be around -- and free -- even as long as Microsoft Money was. Should any of them fail to find their way to profitability, they could disappear or begin charging for their services. And, of course, that would happen after you'd become dependent on it. It's still a risk worth taking, however, because the alternative -- doing all your own record-keeping in a spreadsheet or with paper and pencil -- is so much more time consuming and difficult than any of these programs.
The best way to approach these sites is to look at all of them; take the online tours and decide which one suits you. Consider these points before making your decision.
-- How does the site make money? Mint and LendingTree, for example, make their money when their users click through to recommended merchants (such as credit card issuers) and order their products. Though both claim to be impartial, the fact they are commissioned products could affect the advice you see. When you use these programs and are in the market for a new credit card, for example, you need to comparison shop on other credit card sites to make sure you're seeing all the best deals. Wesabe is making money by using its website as a research lab, then selling its program to banks and credit unions putting up their own money-management websites.
-- How thorough is the site? Not every site works well with every financial institution. If it can't bring in your data automatically, it's not much use to you.
-- How full-featured is the categorization and tagging of items? Mint and Wesabe, for example, allow you to categorize and tag all expenses in multiple ways. So you can look at how much you spend dining out, for example, but also how much you spend on sushi or eating with a particular group of friends. These sites all claim to categorize items from your credit and debit cards automatically; if they don't do a good job of that you won't get an accurate view of your spending patterns.
-- How do you like your moral support and advice? This is where each site differentiates itself. Wesabe has a full-featured social network that allows users to trade tips and offer each other moral support. It also will ask users about particular recurring expenses that may seem to not make sense. Mint sends out alerts when users are getting close to bill due-dates, compares patterns among users and tells customers things like you spend more on auto insurance than 80 percent of the people here. At MoneyRight, there's a constant reminder of how much house you can afford, how much retirement income your savings will support, and your progress toward various goals you can set for yourself.
-- What are your special interests? Are you an investor? Mint comes closest now to integrating full-featured investment information with the rest of your financial life, though other sites are beefing up their investment platforms. MoneyRight is focused more closely on house hunters; it ties in with credit reports and mortgage banks more so than the other services.
-- Will you use it? There's no sense in investing the time and energy in a money management program if you don't sign in regularly and stick with the program. The theory behind all of these sites is that the more you know about how you spend your money, the more you will aim those dollars at the things most important to you. If you can do that, it doesn't really matter where you keep your records.
(editing by Gunna Dickson)