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Balancing checkbooks and relying on paper bank
statements is so last century.
Over the past two years, websites such as Mint, Buxfer, Geezeo and
Wesabe are wooing users with powerful online money management
tools and the promise of access to their financial information
from anywhere in the world.
And it's working.
New user signups have tripled for industry leader Mint.com since
the financial crisis hit the United States in September,
with 40,000 people joining in the last week alone.
Geezeo had 20,000 visitors a month back in May -- today, they're
averaging 150,000.
And they're by no means alone.
"You have this generation of people using debit and credit
cards, but removed from where their money is going," Geezeo.com co-founder
Peter Glyman told AFP. "The silver lining is that it creates an
excellent audit trail."
The ability to aggregate credit card statements, checking
account balances, and other financial data together into a simple
interface was what attracted 32-year-old Kelly Whalen to Wesabe.com.
"With so many accounts all over the place, it's hard to figure
out what's going on with just a pen and paper," she said.
With the help of Wesabe's financial tools, as well as its anonymous
user discussion forums, the stay-at-home mother of four from
Pennsylvania embarked upon a "No-spend Month."
With some preparation, she was able to limit almost all of her
extraneous spending for an entire month.
"We ended up saving 500 dollars, which was our Christmas
budget," Whalen said. "It showed just how much money goes
out the door."
Whalen is one of thousands of users who have cut down on their
spending with help from the site.
"Half of our users have changed their spending as a result of
using our program," said Mint founder Aaron Patzer.
"Average user spending has decreased by 300 dollars to 400
dollars per month over the last year."
Additionally, while Mint, Buxfer.com and Intuit's Quicken
Online offer a host of spending analysis tools, Geezeo and Wesabe
offer discussion forums akin to the social networking groups in
Facebook.
"Money management is something people have been doing for
years, but most of us aren't trained on this," said Wesabe's
vice president of marketing Gabriel Griego.
"Now, people can log on and post the most intimate details of
their financial information anonymously, and get detailed and
thoughtful advice from people who are going through the same
thing."
Most of the websites also offer the ability to send text
messagesto users warning about unusual spending or upcoming bill
payments.
And some even offer support for Apple's iPhone, giving users
mobile access to their information.
Still, with all the benefits and tremendous growth of the new
financial websites, the average age of its users has remained around
30 years old.
"Security is a big issue for all financial sites," said
Buxfer co-founder Shashank Pandit. "Some people are scared
about this whole idea of putting finances on the Web. But it's not
any better or worse than their bank."
Another barrier for customers has been that most of the websites
cannot offer automated bank and credit card account synching
outside North America or Britain, although some offer users the
ability to manually upload their information.
Another thing that has left potential users uneasy has been the
website's business models.
While almost all of them are backed by venture capital money and
have yet to become profitable, Mint makes its money by suggesting
lower interest credit cards and higher yield savings accounts through
its partners.
The others either have advertisements or tiered membership options.
Still, the sites insist they are committed to free access for their
users.
Whalen said her experience has been worthwhile.
"Having the ability to see this information is like personal
finance 101," she said. "I thought having credit card debt
wasn't a big deal, but when I saw how much of our monthly budget was
going toward debt, that was a big wake-up call."
-- AFP
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