I've been thinking a lot about budgeting tools.
When I first starting working, I kept a “Budget Bible” that tracked my spending down to the penny. It was easy because I was single, had few financial obligations, and plenty of time.
Today, budgeting is harder and with less time for mundane tasks, I rely on automated tools.
When it comes to best free budgeting apps, I think Mint and Personal Capital are the clear leaders in the field. I wanted a head to head to head comparison to include one of the older entrants to the field, Quicken, which celebrates its 34th (!!!) birthday this year, because while free is the best price, it doesn't automatically make it the best service.
If you're most interested in seeing a head to head of Personal Capital vs. Mint, click here (let's be honest, Quicken isn't really in the running… is it?).
All three services offer budgeting and while there are similarities between each, there are plenty of differences worth noting.
Quicken: Quicken provides a full budgeting suite. You can see, track and pay bills, all from the app. It shows both bank and credit card balances, and imports bank transactions securely. The app organizes your spending in categories, then projects income and expenses, helping you to create a budget. Like the other services, Quicken also reminds you when your bills are due.
Mint: Mint feels like it was designed for Millennials. Rather than simply track, it'll help with budgeting and debt management. It provides a breakdown of spending by category and allows you to put limits on your spending in each. Mint then gives recommendations to help you save money. These offers, which you can think of really as advertisements, help pay for the service but also can save you money. This can include deals on insurance, credit cards, bank interest rates and credit cards too.
The app can link up with literally thousands of financial institutions, including banks, credit cards, various lenders and investment brokerages. This provides you with automatic tracking of your financial activity, and all in one app. It will also provide alerts to remind you of upcoming bill due dates to help you avoid missing deadlines.
Personal Capital: This service has a more limited budgeting capacity, since it's set up primarily as an investment management platform, with some budgeting services. The app will link to your bank accounts, credit accounts and investment accounts. It will provide account balances and transactions, spending by account and expense category, income and spending reports. Like the other services, Personal Capital will alert you on upcoming bills.
It will also enable you to set a monthly spending target and easily view where you are trending over or under your plan.
Winner: Mint is the clear winner. Mint is as powerful as Quicken but without the cost. Personal Capital performs admirably but their budgeting tool is relatively new and doesn't have as many features as either Mint or Quicken.
Quicken and Personal Capital are the stars in this category, largely because Mint isn't an investment app, and therefore offers only incidental investment services.
Quicken. Quicken's Starter Edition does not include investing, but it's Premier Edition does. That edition provides features like their Portfolio X-Ray, showing performance vs. the market of your investments, and help with with buy/sell decisions. It also provides up-to-date portfolio values, and tracks cost basis and capital gains.
Quicken also helps minimize taxes on your investments. The have a tool called the Capital Gains Estimator, that can help you optimize security sales to realize the greatest after-tax yield.
Mint. Mint is the weakest of the three platforms in the investing category, mostly since it is primarily a budgeting app. They do track your portfolio value, as they do with other accounts, but they don't provide specific tools to help you in your investing activities.
Personal Capital. Investing is what Personal Capital does best. The free version has a wealth of investment tools, including a Net Worth calculator and Cash Flow analyzer. The app will track your portfolio, balance your portfolio allocations, key holdings, and list your top gainers and losers.
They also offer unique tools, such as their Fee Analyzer. You can use it to analyze your investment accounts to see what fees you're really paying for the account. This can include broker fees, as well as the fees charged by mutual funds, that may be reducing your net investment return.
Personal Capital also offers professional investment management for a fee. You can have a portfolio created, maintained and managed for less than what it would cost to have your portfolio managed by a traditional investment advisor.
Winner: Personal Capital because it does more than offer a tracking tool, you can use it's free analytical tools for a relatively deep dive into your investments. They will pitch you their investment advisory service, that's how the bills get paid, but you don't ever need to use them. Quicken performs admirably, especially given its tax reduction tools, but just hasn't kept pace.
Retirement planning is an extension of investment activity, so once again, Quicken and Personal Capital come out on top here as well.
Quicken: Quicken helps you plan for retirement by helping you to set up your retirement goals. It uses planning assumptions from other investment goals, like planning for college, or investing for special purposes. This enables you to switch over to retirement planning without having to add additional information.
They offer a Lifetime Planner feature, that incorporates expected retirement benefits and other income, as well as expectations for inflation, savings, investments, rate of return, current homes and assets and future homes and assets.
Mint: Not applicable, Mint doesn't have a retirement planning feature.
Personal Capital: With its robust investment capability, it should follow that Personal Capital would also be strong with retirement planning and it is. It has a Retirement Planning feature, that will help you determine how much you need to save for retirement and does so for free. It'll also tell you if you're on track towards your retirement goals and you can even run “what if” scenarios.
Personal Capital also offers a 401(k) Fee Analyzer. That will help you to determine which funds in your retirement plan are costing you the most and help you lower your fees using other options.
Winner: Quicken and Personal Capital are too close to call in this category, though Personal Capital does offer advisory services that are an added fee. It's not fair to compare that to a software package you pay for just once, but both will help you in the retirement planning department.
One big concern about putting all this financial data out into the world is security.
Quicken: Quicken stores the data locally and is the only one of the three that does this. While it will connect with your bank to collect information, none of it is stored elsewhere. This means that you still have to be careful with the device Quicken is installed, like your laptop, but you won't have to worry about a third party server or service being hacked and your information stolen.
Mint: Mint is now owned by Intuit, who own TurboTax, QuickBooks, and were the former owners of Quicken; and are familiar with security. Mint uses encryption for data transfer and they offer multi-factor authentication, which is a must for any sensitive log in. On your mobile, there is a 4-digit PIN and/or Touch ID to access your data.
Personal Capital: Personal Capital encrypts all communications with their servers (this is standard) and encrypts your data with AES-256 with multi-layer key management, including rotating user-specific keys and salts. There are also internal access controls so no one at Personal Capital can access your information.
Winner: Quicken, by virtue of storing data locally, is the winner here as long as sticky fingers don't walk off with your device. Mint and Personal Capital are on equal footing, though Personal Capital makes a bigger point to enumerate all the security features they offer. Personal Capital relies on Yodlee, as does much of the financial aggregation industry, and their security for maintaining your data.
If you are strictly thinking budgeting app, Mint really is the clear winner in this category. With budgets, alerts, and other tools, Mint has cornered the budget tracking space like no other. A very close competitor is You Need a Budget, which is extremely powerful for changing your spending behavior. If you are spending more than you save and want help, YNAB is a service you should consider (it's not free though).
If you want expense tracking and a better suite of tools to look at investments, Personal Capital is the tool for you. That's why I switched from Mint to Personal Capital, after briefly “dating” SigFig for investment tracking, and I've never looked back.
Quicken, sadly, is being left behind by these newer companies (Mint is 11 years old!). There are a litany of Mint.com alternatives that perform better than Quicken.
What's your favorite of the three?