Luke Erickson, Ph.D., AFC®, is an associate professor of personal finance for the University of Idaho. He works and lives in the Treasure Valley @drlukeerickson (Instagram), erickson@uidaho.edu
As you can see in the author line, my name is Luke, and I grew up in the 80’s/90’s. If you don’t know what it’s like to grow up with that name, in that era, then let me enlighten you. Nine times out of 10 when I would introduce myself to someone, the response would come in a deep mechanical voice “Luuuuke, I am your father!!!” Followed by laughter because each person thought that they were the first to ever make that joke.
If you’ve never seen Star Wars, and I’m not even sure how that’s even possible, this is your spoiler alert.
Because guess what? My TV dad, Darth Vader, was a BAD GUY. But not just any ol’ bad guy, like THE bad guy of all bad guys. I mean, he choked dudes using the force, destroyed planets, and stole milk from baby kittens. I mean it never actually showed him with the kittens, but you know he would because he’s that bad of a guy.
But, as his de facto earth-son, I’m here to tell you that the guy wasn’t trying to be that bad, he was just really misunderstood. I mean how happy would you be if you had to wear a hot, outdated bodysuit that made you sound like a mechanical James Earl Jones? I mean, the voice thing would actually be pretty sick, but regardless, the guy was a little cranky, ok. And he only got that way because, as we learned in the prequel episodes, he just wanted to protect his wife from a prophesied demise. He was just trying to do good, and it went horribly array.
But in the end Vader was redeemed by saving Luke (TV Luke, not me) from getting electrocuted, which as everyone knows makes up for all the choking, and planet destroying, and kitten-milk-stealing. Ahhh, sweet redemption.
Why do I bring up Darth Vader in a finance article, you ask? Umm, yes, it’s a bit of a stretch, but follow me here: Budgeting is the Darth Vader of personal finances.
You see, much like ol’ Darth, budgeting has been villainized and misunderstood. For many, the word “budgeting” is a four-letter word. You might as well call it the “No Fun” list because budgets are all about choking the fun out of your finances and your life, aren’t they?
Well, that’s where you would be wrong, my friends. A good budget is not a villain, but a hero, because it will minimize waste by reducing expenses that don’t add much value to your life and if used correctly will actually INCREASE the fun in your life. I know, crazy idea, right?
But there’s one little problem with budgeting, and that is that the actual process is so tedious that many just give up out of sheer boredom. The good news is that a decade or so ago the interwebs introduced Account Aggregating Services (AAS) that have significantly automated the budgeting process and eliminated a lot of the bore and tedium from the process.
These websites and apps work by automatically pulling your expenses and balances from all of your online accounts, including checking, savings, cd’s, loans, investments, etc., and then organizes them by category, and makes handy little charts out of them. They can also help you set spending goals for upcoming months, and help you keep tabs on your spending and savings goals in real time.
One of the most popular AAS’s of the past decade was Mint.com. It was popular because it was simple, effective, and free. And yes, I used the word, “was,” as in past-tense, because for reasons unfathomable to me, this top AAS budgeting service was discontinued a few months ago leaving many automated budgeters, including myself, in an intergalactic X-wing tailspin.
The good news is that there are alternatives to Mint, and after a little research I’ve compiled a list of many of these top alternatives along with some pros and cons. Keep in mind that I do not endorse any one over the other, these lists are for informational purposes only. Please do your own research before you choose one:
Empower (Formerly Personal Capital). Pros are that this AAS has been established for years and has been effective at linking to nearly all accounts, it’s budgeting and tracking tools are free, and is especially good for people who track their investments closely. Cons are that the goal setting tools are not as robust as Mint was. It can also be difficult to navigate at times because it is actually geared toward high dollar investment management which is an optional paid service on the site.
You Need a Budget (YNAB). Pros are that this service has been established and popular nearly as long as Mint and is still going strong. It is robust and its strength is zero-based budgeting that requires you to plan every dollar you spend. This can be a powerful feature for those who want to get very detailed with their spending. Cons are that this service costs $99 a year, has a bit of a learning curve in navigation.
Every Dollar. Pros are that if you are a Dave Ramsey fan, this service fits perfectly with his baby step plans for becoming debt free and zero-based, envelope style budgeting. Cons are that it costs $130 a year and does not track investment accounts, making net-worth difficult to follow.
Credit Karma. Pros are that former Mint users’ accounts were automatically migrated to the Credit Karma service. It provides basic spending tracking, net worth, charts, and account balances. It also provides credit monitoring. Cons are that it is not robust in creating spending goals and the user interface is not intuitive to navigate.
Monarch Money. Pros are that it is a fairly robust budgeting app that syncs relatively easily with most accounts and has a user-friendly interface to help track spending set goals, track net worth, and create savings goals. It also offers collaboration with other family members for household budgeting. Cons are that it costs $99 a year and does not offer credit monitoring.
This list is not exhaustive, but these are among the most popular. There are plenty more AAS services to choose from and they all have their pros and cons. Like so many things, it’s not a matter of which is the best, but which fits your personality and budgeting preferences.
So, the only question left is, do you treat your budget like a villain, or the unsung hero it ought to be? As TV Luke said of his father, “I sense the good in you…” I believe that with the right AAS tool, your budget will become one with the force and one of your strongest financial allies! And yes, that was an entirely overdramatic way to end a personal finance article. Cue the inspirational intergalactic music!!!!