A Beginner’s Guide to Online Money Management

Image Credit: Freedigitalphotos.net

PFM, OFM and Online Banking— managing your finds online is all the rage these days, and if you want to get a handle on the big picture that is your money, you really should consider adding these to your personal finance repertoire. I’ve been using the Mint.com OFM now for about two years, and I’m a big fan.

Here’s how to navigate the world of online financial tools to find the one that is right for you.

Know the terms:

PFM: Personal Financial Management

OFM: Online Financial Management

Aggregator: pulls information from many sources to display them all in one place. (A non-aggregating platform would require a lot of data entry).

Know your style.

  • Do you want to manage cashflow, or see the big picture or meet goals?  Depending on what works for you, you’ll have better luck with different platforms.
  • Do you use obscure banks or tiny credit unions? Depending on the types of financial institutions you’re working with, you may be able to use a broad-scale aggregator or need a subscription-based system which can provide the level of customization that you need to add in those smaller financial institutions.
  • Collect all of your account information – logins, passwords, etc to begin the process.

I’m pretty lazy about this, so I selected an aggregating financial management platform. I use Mint.com but there are several others out there. If you choose to use an aggregating platform, you’ll have to use all of your user IDs, passwords and security questions and answers to connect your accounts via the PFM platform you select.

What’s out there?

While not an exhaustive list, here are a few of the available platforms and their abilities and details.

Company Name Price Calendar Cash-flow Goal-setting Aggregation
Mint.com Free No No Yes Yes
GreenSherpa $5.95/mo No Yes Yes Yes*
CalendarBudget $7.95/mo Yes Yes Yes Yes
Pennyminder.com Free Yes No Yes No
MoneyStrands.com Free No No Yes Yes
Loonie’s Desk Free No No Yes Yes
Geezeo.com (available only through banks/financial institutions) No Yes Yes Yes

*GreenSherpa is the only PFM platform that I am aware of which will manually add in a smaller bank or credit union for a user, in addition to the standard list of banks available to the back-end aggregating software that most PFM platforms use from a company called Yodlee.

What can a PFM do for you?

While a system like the envelope system can keep you on budget, a PFM can track long-term trends for you easily. For instance, in our household, we noticed that on average, our entertainment expenses were about $200 higher in the summer months. Why?  No AC in our house! We were always at the mall or the movies hiding out from the heat. As a result, we saved for two months and bought a freestanding air conditioner, which has kept the summer budgets in much better shape.

In Mint, I can track how much I spend on a category, or even with a particular vendor (a key measure of success for me is reducing the volume of transactions at a favorite local coffee vendor that rhymes with five-bucks).   I can also plan ahead for goals such as retirement, and funding the kids’ college and getting out of debt. It keeps me honest with myself and gives me a good picture of where I’ve been.

My Goals

I still start the budget out on paper every month, and then transfer it to Mint.com’s budget screen.  From there, I watch the green bars turn yellow as they approach their budgeted amount, and red as they hit it or go over.

With my husband and I working separate shifts, it also helps as a great way for us to check-in on the budget on days we can’t sit down and go over it. Since it matches our bank accounts by automatically aggregating everything, what you see is really what you get…or “got” as the case may be.

Mint.com's net income chart

Are you using an online budgeting system? If so, which one? What do you like and dislike about it?  We’ve used mint.com for two years now and the only thing that still seems to be missing is cash-flow projections, though we really know that fairly well. It would be nice to be able to enter our income projection into it, and work from that (this is why we still budget on paper first, and then adjust budgets every month). Otherwise, we love it!

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  • http://www.moneyStrands.com Lucia @ moneyStrands

    Hey Jessica, great post! I just wanted to mention that moneyStrands.com does offer a manual account feature in addition to automatic aggregation. Users can create a manual account and key in transactions or import them through a CSV, OFX or QFX file.

  • Helen

    Hi Jessica,

    I’ve been using Mint.com for about 2 years as well. I just recently set up a debt repayment goal, but I feel like it’s not calculating properly. For example, last month I was able to send $500 more towards credit cards than the amount I have in my goal. I triple checked and everything is classified correctly, but the goal does not reflect the overage, and actually shows that I paid less. Have you had any issues with goald and do you have any tips? I think Mint.com is great and am looking for better ways of utilizing it more.