Review of Personal Capital Budgeting App

Hi, everyone. This is Lara Hammock from the Marble Jar channel and in today’s video, I’m going to review the budgeting function of the Personal Capital service and app.  This is part of my series on budgeting apps. 

Personal Capital is a financial management platform. Whereas many of the apps I am looking at do only budgeting, Personal Capital shows your budget, debt, and investments all in one place.  The service is free. The reason they can provide these financial tools for free is that they upsell you on their other services — financial advice and wealth management, which they provide for a fee.  I will only be considering the budgeting portion of their services. Perhaps I will do another video on the other tools that they offer.

Personal Capital’s website and app are pretty slick looking.  It is, however, fairly obvious that budgeting is a very small portion of what they are offering — and definitely not the main emphasis. That said, for a free service, the budgeting is not bad. Let’s go through it:

• Linking accounts - Personal Capital allows you to link your checking, savings, and credit card accounts. It pulls in transactions from your bank automatically, so all you need to do is tag them with the correct budget category.  This is great and a nice to have for a free service
• Budget line items - The app has a long list of budget categories, And although you cannot delete categories, you can add new ones and edit the existing ones. This is fairly flexible.
• Budget groups - Personal capital does not support budget groups or customized groups for your budget categories. They have three basic groupings: expenses, income, and other.
• Setting up a budget - this was the part of the app that I found the most curious. Personal capital allows you to set up a budget, but only one amount for the entire month. So you can say, I want to spend only $5,000 per month, but you cannot say I want to spend only $700 this month for groceries or $200 for utilizes.  Which brings us to
• Budget reports - Because Personal Capital does not allow you to set budget goals for each line item, it’s simply totals up the spending for each category. So you get a total, but no budgeted number to compare it to.  So for the groceries line item, you can see how much I have spent this month (the orange ring), you can see how that compares to my overall budget goal for the month which is $5000 (this is represented by the full circle), and you can see how it compares to what I spent by this time last month (the yellow ring).  This would be a dealbreaker for me.  Particularly if you are trying to change behavior, you need to set goals by budget category so that you can cut spending in those specific areas.  So, it does no good for me to know that I have spent this amount against my $5000 budget, when I only want to spend $700 on groceries this month. That comparison is not available.
• Past reports - The app does give you the ability to see your budget information from last month or last year, but not three months ago or seven months ago
• Tagging transactions - categorizing your spending is be tricky in Personal Capital. First of all, there is no inbox or holding area for all of the new transactions. That means new transactions are intermingled with old, so you’ll have to go looking for transactions to change. It’s unclear whether Personal Capital learns from prior transactions so that, for example, purchases from Giant Foods would always be categorized as Groceries. In addition, there is no place for notes within the transaction and no way to split a transaction between two different budget categories. That said, changing a budget item is pretty straightforward.
• Other - Two other things I noticed: you can’t add new transactions manually, which I find helpful to do occasionally. And there doesn’t appear to be an export feature.

All in all, I can’t imagine too many people are using Personal Capital only for budgeting. However, if you are not looking to change your behavior or limit spending, perhaps just knowing how much you’ve spent in each category is valuable information. In addition, If you are using the other financial management tools that Personal Capital has to offer, perhaps it is worth having everything together on one platform. Let me know what you think! Comments are always appreciate it and thanks for watching.