Beyond The Kitchen Table: Sorting Finances Online Several free financial planning services on the Web help financial slackers and diligent planners make sense of how they're spending their precious dollars. Professional financial planners say such programs are useful tools, but they don't do the heavy lifting.
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Beyond The Kitchen Table: Sorting Finances Online

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Beyond The Kitchen Table: Sorting Finances Online

Beyond The Kitchen Table: Sorting Finances Online

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From NPR News, this is ALL THINGS CONSIDERED. I'm Robert Siegel.


And I'm Michele Norris. And now it's time for All Tech Considered.

(Soundbite of music)

NORRIS: Hard times are leading many of us to pay greater attention to our personal finances. We're thinking more carefully about what we spend and where we spend it. And this week, we're focusing on a new generation of Web sites that are trying to make it easier to work out precisely where the dollars and the cents are going.

NPR's Katia Dunn set out to try one of the most popular. It's called

KATIA DUNN: In my household, there are so many things we like doing better than managing our finances, like video golf.

(Soundbite of video golf)

Unidentified Man: (unintelligible)

DUNN: Which was what my fiance Joel was doing when I tried to enlist his help in signing us up for an online financial management program.

Did you want to stop video games and…

JOEL: Can I just finish this round?

(Soundbite of laughter)

DUNN: But our finances.

JOEL: I know, but I'm playing better than I ever played.

(Soundbite of laughter)

DUNN: Okay. is designed in part to help financial slackers like us.

Mr. AARON PATZER (Founder, So it just basically puts your finances on autopilot.

DUNN: Aaron Patzer is the founder of, a free financial planning site. He started his company two years ago.

Mr. PATZER: I essentially - I sat alone in a room for seven months, worked 14 hours a day, seven days a week and came up with the core algorithms behind Mint.

DUNN: Once you've created an account, Mint sorts out your finances. It draws simple charts that help show you where your money is going. It prompts you to pay your bills on time. It suggests ways to make the most of credit card incentive programs.

Some professional financial planners say programs like this can be a useful tool, but they still don't do the really hard work, like rounding up your financial documents and putting them into Mint's database. That's time-consuming. Also, there's the psychological side of finances.

Ms. MONIQUE TILFORD (Your Money or Your Life): It's just data. You have to have someone on the other side asking the right questions about what's your goal here?

DUNN: Monique Tilford is a with a nonprofit money management program called Your Money or Your Life. She says some people are reluctant to take an honest look at their finances.

Ms. TILFORD: If you put in, let's say, I mean, how much money you're spending on alcohol, if that's under groceries, you're not going to see it.

(Soundbite of laughter)

DUNN: After I persuaded Joel to put our financial data into Mint, we took a close look at our spending over six months. We examined how much we spend eating out compared with groceries. Actually, it was pretty reasonable.

Were you nervous to see this number because you didn't want to know what it was?

JOEL: Yes. I was avoiding trying to figure out exactly how much we spend on going out and drinking. And it turns out, had I done that earlier, I would've not felt bad at all.

DUNN:'s Patzer says he believes using online tools can give people more of a sense of control over their money. Soon, Mint will be introducing an incentive program, first to have you round up data, then it charts it. And finally, the program moves you slowly towards setting goals. You win points when you succeed.

But he says the incentive program will be optional. He doesn't want to lose customers who can't bring themselves to come clean about where their money is going.

NORRIS: That's NPR's Katia Dunn. And we're joined now by Omar Gallaga. He covers technology culture for the Austin American-Statesman, and he's a regular part of our Monday tech conversation. Hello, Omar.

OMAR GALLAGA: Hi. Good to be here.

NORRIS: I'm curious. Are you one of these hip Web-savvy users with financial management skills that are now turning to to figure out where your money goes?

GALLAGA: No, no. I'm really not.

(Soundbite of laughter)

GALLAGA: And I'm generally not hip in the first place. But - no, I've actually been watching a lot of my friends and coworkers migrate to sites like Mint, you know, and use the iPhone app and things like that. And I'm still rocking Microsoft Money 2002.

(Soundbite of laughter)

GALLAGA: It feels like I'm in the Stone Age. And my wife is still using a paper ledger. So, no, no, we're not quite there yet. Actually, this is one of the cases where I definitely wasn't up to speed on the latest when we started working on this piece. But just from playing with a lot of these sites over the weekend, I think I've kind of seen the light, and I'm ready to take my finances to the next level - the 2.0 level.

NORRIS: Now, you noted that some people are actually doing this on their iPhones, they're using applications for their personal data devices. It seems when I look at a lot of these sites, that they're designed for a younger, hipper generation. Maybe we're not a part of it, but it seems like that's exactly who they're designing for.

GALLAGA: Yeah. They definitely look like more fun to use. They look more like social networking sites. So yeah, they definitely are targeting kind of a different audience than the people you would traditionally think, you know, were using Quicken or Microsoft Money. But even those sites, even, you know, like Quicken online, you know, is kind of going after that audience as well.

NORRIS: I like the names, also -

GALLAGA: SmartyPig, Wesabe, yeah, Thrive, the other Web site is just And, you know, a lot of them have that sort of Internet startup feel to them. I was looking at some of the about us pages for some of these sites, and, you know, they all look like young, hip employees at any dot-com startup. You know, and, you know, you're kind of trusting them with your finances.

(Soundbite of laughter)

NORRIS: Well, speaking of trust, my, I guess, immediate question would have to do with trust and security. What do sites like this do to ensure the safety of the users? I mean, you're handing over credit card information, loan information, all kinds of personal information.

GALLAGA: Well, they're doing a lot of things that the online banking sites do, secure Web servers, encryption, virus and spyware protection. You know, Mint, especially, they claim, you know, we're doing the same kind of security that you would find on these financial institution Web sites. One site that I talked to, SmartyPig, they're FDIC insured through a community bank in Iowa.

So, and another way that they're protecting their data is by decentralizing it. They might never ask you for your Social Security number or even your first and last name. And the passwords and logins you enter would be stored in a different place as the actual data. So even if someone hacked into your account, they might get some of that information, but they wouldn't know who you are or any of your bank account information. They wouldn't be able to do anything with it.

NORRIS: Omar, one of the things that I thought was interesting about the sites, and I just sort of cruised through some of them, is the way that people are so open in the internal blogs on some of the sites. You have people talking about how much they spend on moisturizer, how much - you know, one person was worrying about whether or not they should get a pet and they actually were trying to figure out how much money that would cost. And there was a lot of information that they were sort of putting out there in the open on a subject that people are normally very private about.

GALLAGA: I think so because I think right now, on sites like Facebook, you know, you have this culture of sort of helping each other, of presenting a problem and having the community help you solve it - I guess like a sort of personal crowd sourcing, where you kind of have all of your friends and maybe even people who have some financial expertise giving you help and advice.

And a lot of these sites are employing some element of financial experts, you know, people you can either connect with personally or, you know, you can send an email and get an answer back or kind of a forum structure. So, really, that's what the sites are aiming for, not just to inform you better about your habits, but also giving you a structure to change your habits or move in the right direction.

NORRIS: You know, the way you spend your money in some ways says something about who you are and how you live your life. Is there anything surprising that you found out about yourself?

GALLAGA: Well, just based on one month of bank statements, apparently my biggest expense is transportation. So it tells me I'm commuting a little bit too much, probably.

(Soundbite of laughter)

NORRIS: Buy a bike.

(Soundbite of laughter)

GALLAGA: Yeah. Simplify.

NORRIS: Well, Omar, this all sounds interesting. I assume that you will be posting links on our Web site.

GALLAGA: Yes. I'm going to be posting links to all of these financial sites, as well as a lot of news stories that we found related to them on the NPR blog:

NORRIS: Thank you, Omar.

GALLAGA: Thanks. Have a good week.

(Soundbite of music)

NORRIS: That's Omar Gallaga. He covers technology culture for the Austin American-Statesman. And he talks to us most Mondays.

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