As an engineer at heart, I know that being able to measure and track data is essential to getting better. When I started to get serious about my finances, I took the same approach by tracking our budget and net worth.
This process used a manual spreadsheet with a tedious process of logging into all of my financial accounts once a month. I would record the values of each account and then be able to determine trends over time.
While this certainly worked, it was not the easiest to keep up with. When I finally found Personal Capital, I realized it was a game changer. I
What is Personal Capital?
Personal Capital is a free suite of tools that allow you to automatically track your monthly budget along with your net worth.
The basic idea is that you can connect all of your financial accounts to Personal Capital. This is a one-way lookup connection into your bank accounts to determine your transactions and account values.
The benefit is that you can then see all of your accounts from one dashboard. Not only can you track your overall net worth, but it gives details into your expenses and income. It also shows your investment performance and provides suggestions on building your emergency fund.
Personal Capital is free to sign up and use without restrictions. They monetize the app by upselling investment management, but that is completely optional. However, they do provide great value to be prepared for retirement and grow your investments.
Quick Look
| Description | Automatically monitor your financial accounts and investments from one dashboard. |
| Asset Monitoring | Bank Accounts (Checking & Savings) Investment Accounts Retirement Accounts Credit Cards Other Assets (Home) Custom |
| Liability Monitoring | Student Loans Car Loans Credit Card Debt Mortgage Custom |
| Real Time Tracking | Net Worth Monthly Budget (Income & Expenses) Cashflow Bills Investment Performance |
| Financial Planning | Retirement Planning Savings Planning Emergency Fund Planning |
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Why We Chose Personal Capital
When I came across Personal Capital originally a few years ago, I didn’t think too much about it. At the time, I was tracking my budget using a spreadsheet and was able to get a rough idea for my expenses. It was getting the job done, even if it wasn’t too pretty.
Fast forward to last year, which is when I really started to get serious about our finances. At this point, I realized it didn’t make sense to spend an hour each month trying to log and track expenses. I started to look around again for a more automated system and found Personal Capital.
After further research, I realized that it would do everything I was looking for. It would track my monthly expenses from one dashboard, show my investment performance, and monitor our retirement accounts. On top of that, it also tracked our net worth in real time, without needing any complex calculations.
I did a quick search for other options but didn’t want to overthink it. Since Personal Capital is free to sign up and use, I jumped right in. Over the next few months, it has proven to be very useful for tracking our net worth and budget.
Another benefit is that my wife and I can see all of our finances together in one place. There is no need to use different accounts since everything can be consolidated into one dashboard.
Getting Started with Personal Capital
After opening a new account, the first step was to link our bank accounts. This is a simple process and starts with searching for your financial institution.
Once you find it in their search box, it will prompt you to enter your login credentials to link your account. In most situations, it will also request you to confirm your security questions and uses two-factor authentication.
Once linked, Personal Capital will pull the data from your bank account and display it in your dashboard. Some of the information it can pull includes individual transactions, payments from employers, and expenses paid out.
Besides your checking and savings accounts, you can also link your investment and retirement accounts. Credit cards can also be linked to give a full picture of your specific expenses. If you have a mortgage or other assets, those can also be included.
In all cases, the transactions can be edited in your dashboard to categorize them however you want. This gives you the power to full track all of your bills and expenses.
How to Use Personal Capital
To get the most from your account, there are a few areas that you will want to focus on once you have linked your accounts.
The first is your net worth. This is a graph that shows how your total net worth changes over time. As you save money and your investments grow, your net worth will also go up. This can also be a powerful tool to show if you are spending too much money, causing your net worth to decrease.
The next is your monthly budget. This feature shows your cash flow for each month, both in and out of your account. You can set a monthly budget for how much you can spend while still saving money.
One cool feature is that the system will alert you if you are over or under your spending at the same time the month before. This can help to keep you on track to reach your financial goals.
Your account will also track your investments and how well they perform. Depending on how you are allocated, they may have recommendations to perform better.
Their retirement planner will also help analyze if you are saving enough money to reach your retirement goals. Personal Capital also tracks your emergency savings to make sure you are saving enough for unexpected costs.
The one paid feature of Personal Capital is if you would like to use their financial advisors to manage your portfolio. This is completely optional and is not something I am currently using, but could be a good option for wealth management.
Is Personal Capital Safe?
One of the first questions my wife asked was, is it safe? After doing some research, I believe the answer is YES, Personal Capital is safe to use.
While any online platform can be a target for hackers, Personal Capital uses the best encryption, two-factor authentication, and security available.
On top of that, there is no sensitive information saved to your Personal Capital account. Your bank login credentials are not saved to the system, so it is impossible to get into those accounts.
Since Personal Capital only pulls information from your financial institutions, there is no risk of tampering with your actual funds. The system is unable to transfer funds, buy or sell, or adjust the value of any of your accounts.
Overall, I feel comfortable and safe using Personal Capital.
Who is Personal Capital For?
Personal Capital is great for anyone looking to optimize their finances. It is a great platform to really understand your expenses and income, allowing you to maximize your net worth.
Young adults can benefit from using a central dashboard to develop good habits early in their life. Couples can track all of their finances on one place with no extra effort once set up. People closer to retirement can use the retirement planner to make sure you are ready for your golden years.
Personal Capital is truly a powerful tool that can benefit anyone looking to get ahead financially. Plus, it is 100% free to use!
Try Personal Capital Today for Free
Personal Capital is my number one recommended financial tool to help you achieve your goals. If you are looking to save more money, retire early, and optimize your investments, this is the best platform to use.
Sign up for free to start using Personal Capital
