- Dave Kinzer
Use Personal Capital To Track Finances
Updated: May 11, 2020
It’s important to monitor your overall financial status on a regular basis. I recommend you total up all your assets and debts once every three months. This practice will help you understand exactly where you stand and how close you are to accomplishing your financial goals.
Remembering every single username and password for each of your accounts and recording the totals down on a spreadsheet can be tedious, though.
Personal Capital is a free online tool that makes this process a breeze. To do a financial checkup, instead of having to login separately to your 15 different accounts, you just login to personalcapital.com.
There you’ll see all of your balances. This allows you to get a snapshot of your financial situation in seconds.
Personal Capital uses all sorts of nifty graphs and charts to show your balances and progress towards your goals. The overview page shows you your net worth, cash flow, budget, portfolio balance, retirement savings, and emergency fund.
Using information you entered when you set up your account, Personal Capital will show how well you’re doing in different areas. For instance, based on your income and expenses, it will show how much money it recommends you have in your emergency fund.
In a similar way, it’ll show how close you are to funding your retirement, paying off debt, and paying off your mortgage.
I particularly like the “Retirement Planner” section. After you’ve plugged in your numbers (age, when you want to retire, how much money you think you’ll need in retirement, etc.), it will analyze the effectiveness of your current retirement funding plan.
Personal Capital tells me I have a 75% chance of meeting my retirement goal. Specifically, it says, “You’re roughly on track for retirement, but your plan may require flexibility.” So I may need to change some things.
Another useful feature is the budgeting tool. It categorizes your monthly spending so you can see where you are spending your money.
There are some limitations to the budgeting tool, however. It can only categorize purchases you make with a debit or credit card. If you use a check or cash to pay for something, it will be able to tell you that you spent some money, but it won’t know what you purchased.
For example, when I click on “budgeting”, I see a summary of my expenses by category. When I scroll to the bottom, I see that the category with the lowest amount of money spent ($19.95) is “taxes”.
Ha! Does Personal Capital really think I only spent twenty bucks on taxes? Doesn’t it know I live in Illinois?
After a bit of detective work, I figure out the $19.95 was a fee I paid to H&R Block when I filed my taxes.
Since I don’t pay my property taxes with a credit card, it doesn’t include that expense here either. It lumped my property taxes in with “other expenses”. I had to comb through that category to find my property tax payment and manually move it to the “taxes” category.
If having a rock-solid budgeting program is important to you, keep looking. You might consider using Mint, another free personal finance app. I haven’t used it, but I’ve read that it has a much better budget section.
Personal Capital makes its money by offering to manage your investments. Every now and then, it will invite you to talk to an advisor so you can “optimize your portfolio”.
These ads are small and easy to ignore. I’ve never used one of their advisors so I can’t comment too much about it. I will say the description of the service seems fine, and their fees are reasonable.
So would I recommend Personal Capital? Absolutely. The ability to see all of your accounts on one screen is great. The various tools that show your progress towards different financial goals is useful. And it is free.
If you need help keeping track of your money situation, Personal Capital is a great app.
BONUS: If you decide to start an account with Personal Capital, use this link: https://share.personalcapital.com/x/OVqJlh If you sign up through the link, you'll receive a $20 Amazon gift card and so will I. Their website says in order to receive the gift card, you have to link a qualified investment account, such as a 401k, IRA, etc.