By Lindsay Blakely
Americans' credit card debt is expected to reach a staggering $780 billion this year, according to Equifax and Moody's economy.com. And that doesn't even include the unpaid bills accumulating on department store charge cards. What's bad for our bank accounts is turning out to be a wealth of opportunity for a slew of startup companies looking to help you manage your finances.
With names like Wesabe and Banzai, these Web 2.0 companies are trying to outdo one another by offering easy-to-use online tools that enable consumers to reign in spending and stick to a budget. Here's how they measure up.
Wesabe bills itself as part financial software, part community. The site will keep track of your transactions automatically and uploading your accounts takes about just a few minutes. To make full use of the features, you have to rename and tag each purchase or deposit. The tags help categorize spending so you know where most of your money is going and they also serves as keywords Wesabe uses to generate spending and saving tips based on your habits. For example, if you're in the red and you make a daily trip to Starbucks for a $4 latte, chances are one of your tips will advise you to cut out the caffeine addiction. The community part of Wesabe means you can join a support group to help reach a savings goal or ask other members questions like how to financially manage retirement.
Pros: Transactions are automatically tracked; helpful charts monitor spending and earnings on a daily, weekly, monthly, quarterly or annual basis; Wesabe is also available as a Mac Dashboard widget.
Cons: The "Tips" feature is not as personalized as it seems -- tagging a transaction as "credit card payment," for example, led to a tip about where to find the lowest calling card rates to India.
If you're looking for the lazy man's approach to balancing your checkbook, this is not it. Banzai is designed around the theory that you can't have your finances on auto pilot if you want to eliminate debt and increase savings. As such, even though you can upload account information from your bank each day, Banzai suggests spending the time to manually upload all transactions. "The Banzai Way," as the company calls it, is to separate bills and expenses into "jars" so that you know how you're allocating your money and can readjust to make sure you always have some cash in a "reserves" jar. As the only for-fee service, Banzai also matches you to a human coach for one-on-one budgetary assistance.
Cost: $4.95 a month
Pros: Clean, customizable interface; Banzai offers a whole philosophy and support manual to help people control their spending habits.
Cons: Just take a look at the extensive tutorial and lengthy FAQs and it's clear that "The Banzai Way" requires a learning curve; your Banzai coach is not necessarily a financial expert -- she is just another Banzai user. (Coaches do not have access to your account information.)
Mint is the opposite of Banzai in terms of effort required. You provide your bank and credit card account login information and Mint will automatically extract your transactions. The site's technology will also categorize each expense or deposit for you and update your financial history daily. Other tools include "Spending Trends," a tab that details monthly expenses by categories like entertainment and gas and shows the results in bar graphs; automatic budgets; and suggestions for other bank and credit accounts that could save you money.
Pros: Easy to use; multiple ways to drill down into your finances in detail with graphs, charts and spending averages calculated for you; e-mail alerts let you know if your account balances are low.
Cons: The site is laden with details and suffers from information overload; although the automatic categorizing feature is usually on target, you may need to occasionally edit transaction labels for accuracy.
Like Banzai, Expensr is mostly manual, unless you want to upload transaction files from your bank or credit card website. The company's tagline is, "Where did all my money go?," and to answer that question Expensr will organize your spending habits by category in a pie chart or show you a bar graph timeline. The site also lets you create multiple budgets where you can compare actual expenditures next to your budget goals. Under the community tab, you can fill out your profile, upload a photo and search for like-minded individuals using tags like "married," "Canadian" and "in my twenties."
Pros: Easy-to-use budget tool; the milestone countdown is useful for tracking savings goals or dwindling check accounts.
Cons: Entering and categorizing transactions is a time-consuming process; social networking profiles are a great feature -- but not on a personal finance website.