Using Personal Capital to Track Your Expenses

Disclosure: I have not been paid or compensated in any way by Personal Capital. I use (and truly believe in) their free product. All Personal Capital links within this blog post are my referral link, so if you sign up and link an account we each get a $20 Amazon gift card.

I started using Personal Capital a little over two years ago. I had recently realized that I was close to paying off all of my student debt in full and wanted a was tired of tracking all of my many accounts (student loans, car payment, checking, and savings at the time) in a little notebook I kept in my bedside table. I thought that there must be a better way out there to amalgamate all of my personal finance data in one place, and ideally visualize my savings going up and my debt going down. A quick Google led me to Personal Capital and I have been a proselytizing convert ever since!

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Seeing the ‘Liabilities’ total shrinking with every passing week encouraged me to figure out ways to pump up the ‘Assets’ total. Using Personal Capital encouraged me not only to seek out side-hustle work and pay more attention to my savings strategies, it also motivated me to start learning more about investing. I had always been contributing to my employer-provided 401k, but with this new interest in money I actually started going in and adjusting my allocations and bumping up my contribution per paycheck. Beyond that I also researched robo-advisors and started apportioning more and more of my paycheck into my different investment accounts. This certainly speaks to my personality, as I have always loved statistics and number manipulation, but I really think I wouldn’t be as interested in my personal net worth if it weren’t for Personal Capital’s great tools and visualizations showing me that my work is actually doing something!

Getting Started with Personal Capital

If, like me, you need a boost of encouragement, here are 4 easy steps to setting up your account:

  1. Sign up! It’s free and all it requires is your email and a password.
  2. Answer a few questions about your retirement and savings goals. Personal Capital uses this data to calculate how much you should save per month to hit your goals. Don’t worry about having exact numbers, as you can always go back and change your answers or generate new and different scenarios.
  3. Link some accounts. Personal Capital integrates with most major banking and financial institutions. If your bank or investment is not listed, you can add it manually. You can also manually add assets like your house or car value, that contribute to your net worth.
  4. Check out your Net Worth and Cash Flow. Personal Capital does all of the math and tallying for you to figure out your assets vs liabilities, and succinctly displays your net worth. It also divides every purchase you’ve made into categories, so you can see where you’re spending the most.

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Tracking Your Expenses

One of the best features of Personal Capital, in my opinion, is the categorization of expenses. For every transaction recorded in each of your accounts, Personal Capital allows you to select a category for it to live in. This will help you get a “bigger picture” look at your finances, and ideally help you see which categories are a little bloated (for me, it is definitely Travel and Restaurants!) and should get reigned in.

This “bigger picture” mentality is especially useful when looking at months (or years!) in review. I like to take stock of my finances pretty regularly, so I often compare this month to the last, or this month to the same month a year ago (i.e. February 2018 vs February 2017). This gives me a good idea of when major purchases tend to hit like car insurance payments or hefty travel expenses around the holidays. With that knowledge I can plan ahead with fewer surprise costs. For me, without this comprehensive and aggregate view of my money management, I would not be able to make the most informed decisions about my finances like setting savings goals, changing 401k contributions, and deciding on investment opportunities.

Anyone else using Personal Capital to track their spending? Tried a different app and have opinions or recommendations?? Let me know in the comments!