The hard work of financial independence begins with a budgeting exercise. To develop more sustainable savings habits, we first need to understand what we spend. 

The next step is the sometimes-painful adjustment to a more frugal lifestyle. That usually means more dinners at home, rethinking entertainment, and limiting major purchases. I went from 10 percent monthly savings to 65-70 percent. This process creates the new sustained cash flow to maximize savings.

One can adjust to a new lifestyle in a handful of months. Not to take away from the challenge of these steps, but the excitement and initial commitment to a new lifestyle can make this first part seem easy.  

Sustain the lifestyle

The next stage of financial independence is difficult, it is sustaining the momentum built and committing—for the long term—to an entirely new lifestyle. And it is a lot of work. 

In a recent book, a husband commented on his wife’s feelings toward their new FIRE lifestyle. He said she “feels all the negatives (giving up her car, living with family, eating at home), but she couldn’t feel the positives (a higher net worth, more cash).” Indeed one of the biggest criticisms of the financial independence movement is the depression and anxiety engendered in giving up so much and worrying about spending. But that is a conversation for another time. 

Our objective is how to track and sustain the momentum of savings and frugal living over the long term. Tracking all financial accounts offers a holistic picture and visibility into one’s overall finances. The challenge is each account is constantly updating. Bank accounts will rise and fall with deposits and spending. Stock accounts will go up and down. Real estate values will fluctuate. As a result, a static tracker like an excel spreadsheet must be constantly updated to reflect the present value of overall finances. 

To combat that problem, a number of software solutions exist to offer a holistic picture of finances in one place. 

The aggregator business model

Many of the financial aggregators on the market today do not cost money. That does not mean these services are free. As part of the user agreements, a user offers a full disclosure of his financial information, providing bank, stock, and other financial login information.

The company gets access to information about an individual’s purchases, spending habits, and net worth. This offers business development opportunities through targeted selling of additional services. 

Data security is also worth consideration. 

Lets take a look at the top contenders. 

Personal Capital 

In the financial independence community Personal Capital reigns supreme. As a software tool it focuses on investment accounts with limited focus on spending and budgeting. The graphical interface is beautifully designed and shows financial information over time in a way that is intuitive. 

The software also leverages a set of algorithms to assess an investor’s asset mix by age and offers helpful tips on increasing or decreasing risk accordingly. For me, it is the best visual representation of any of the software solutions out there. 

Personal Capital makes its money as a financial advisor. Once a profile is set-up, one of the company’s eager representatives will aggressively contact the new user to offer additional fee-based financial services. Just tell them know for a few weeks and they will generally stop calling. 

Mint

Mint is almost entirely focused on tracking purchases and spending across different accounts by aggregating credit card transactions and ATM withdrawals to assess spending. The software crunches those numbers and assesses purchases by category, returning a helpful real-time chart for review. 

The software allows users to set budgeting goals and sends Pollyannaish messages when those thresholds are breached. Those are definitely not for everyone, but for me I’ve found a message indicating I’ve exceeded my spending limit for the month gives me pause and can lead to me rethinking a purchase. 

A common complaint of Mint is that it offers a historical perspective without strong tools for projecting goals into the future. Other applications are better at the forecasting side of the equation. 

Mint makes its money off of targeted advertisements, particularly credit card sign-ups. It is also part of the Intuit family (think TurboTax) so offering this application more data helps a company know nearly everything about you. 

You Need a Budget (YNAB)

YNAB goes beyond expense tracking and into the real of expense forecasting and planning. The site claims that before a user spends a single dollar, YNAB will help think through spending priorities—immediate, short-term, and long-term—and allocate money accordingly. It also offers multiple check-ins throughout the month to assess if budgeting is on track and suggest possible adjustments. 

YNAB is a subscription model so users sign up to use its service. 

Status Money

Status Money leverages fear and insecurity to help you save. The software introduces uncomfortable social comparisons to peers in similar demographic ranges. Did peer pressure help you to make decisions that you might not have made otherwise? Then Status Money might be for you!

The idea is a user will input demographic, location, credit score, housing and other financial information. That builds a profile that is assessed against others in a analogous category. It is a Keeping Up with the Joneses for finance. That can be a powerful motivator depending on ones temperament. 

The software is free and makes revenue by offering tailored financial services to the individual. 

Conclusion

There are many offers today for a person hoping to get a more holistic view of their finances in one place.