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Are you trying to get your financial house in order? Then you’re probably looking for the best apps to help you with your journey. Today, I’m comparing two of the most popular options: YNAB vs Personal Capital. You’ll learn which of these two services is right for you and how they can help you meet your financial goals.
There are lots of budgeting services from which to choose. One of the most popular services is the budgeting behemoth YNAB.
What sets YNAB apart from other budgeting services is its use of zero-based budgeting principles. YNAB encourages a proactive approach to budgeting versus a reactive approach taken by other apps. It does this by helping you allocate all of your income to spending and saving categories, which allows you to manage your financial priorities. Using a proactive approach to budgeting, you’re much more likely to meet your goals than if you just use budgeting to document what’s already happened.
The YNAB ecosystem is built around four unique rules to help you budget your money more effectively.
1) Give Ever Dollar a Job
First, YNAB allows you to prioritize what you do with your money. Because you allocate every one of your dollars to a specific purchase, you’re in charge of what your money does – not the other way around.
Let’s say your income is $2,000 per month. In YNAB, when you receive that $2,000, you might allocate $1,000 to housing/utilities, $500 to food, $250 to insurance, and $250 to your savings goals. No matter how you’re allocating your money, the key is to prioritize where it goes, and YNAB helps you do that.
And this approach results in a psychological impact too. Rather than stressing about your money, you’re simply executing your plan when you follow your budget. And that’s stress-free.
2) Embrace Your True Expenses
Does it ever feel like you’re facing a surprise expense every month? I used to feel that way, too, until I started using YNAB and learned about something called sinking funds.
Sinking funds are used to set money aside for future expenses – even those you might think are surprises. By embracing your true expenses, you’ll set aside money every month for the “surprises” like car maintenance, holiday shopping, and more.
By breaking these lumpy expenses into manageable monthly chunks, it’s much easier to stay ahead of your spending. When these expenses do come around, no stress, no fear, just follow the plan.
3) Roll with the Punches
Circumstances change, and your budget should too. Let’s say you planned to spend $500 on groceries this month. But then, all of a sudden, you decide you want to take a weekend getaway.
If you haven’t budgeted for the getaway, is all lost? No! Instead, move some of your spare money from the grocery category to your vacation category.
Again, you’re just reprioritizing your budget to align with your financial priorities. And that’s how a budget should work!
4) Age Your Money
Finally, if you’re caught in the paycheck-to-paycheck cycle, YNAB can help. Its budgeting principles allow you to spend less than you earn, and in turn, you’ll end up getting out of the paycheck-to-paycheck cycle. Over time, you’ll be spending “old” money that you earned months ago rather than living on next month’s paycheck.
These basic budgeting principles make YNAB a standout in the budgeting space. Of all the budgeting services I’ve reviewed, none is as robust or life-changing as YNAB. And this isn’t hyperbole – I have saved thousands (if not tens of thousands) since starting to use YNAB.
Personal Capital Overview
Personal Capital is different. It does budgeting, but it does a whole lot more.
Personal Capital is a holistic personal finance app to help you manage your spending, investing, and retirement plans.
While YNAB is known for budgeting, Personal Capital is known for helping you manage your entire financial picture. For example, if you’re curious about your investments, you can check out your investment portfolio at a glance, including tracking its performance and asset allocation.
In addition to its investment portfolio tracking features, Personal Capital also has some standout features to help you reach your long-term financial goals like retirement, savings, and more. But more on that in a minute.
YNAB vs Personal Capital: Key Similarities
Before I dive into some of the standout features of YNAB and Personal Capital, let’s talk about how these apps are similar.
Both of these apps feature budgeting functionality as well as ways to track your cash flow. They’ll show you how much you spent and in what categories, allowing you to track your spending over time.
Additionally, YNAB and Personal Capital each offer net worth tracking. Net worth tracking helps you keep tabs on your financial progress – watching your assets grow and shrinking your liabilities over time. Admittedly, the visualizations are a bit better in Personal Capital, but overall, the functionality is the same.
Beyond basic budgeting and net worth tracking, these two apps couldn’t be more different. Let’s talk about some key differentiators.
YNAB vs Personal Capital: Key Differences
While both services offer budgeting tools, YNAB and Personal Capital have different approaches. YNAB takes a proactive approach, while Personal Capital uses a reactive approach.
Personal Capital can help you track spending that’s already happened, but it falls short in helping you plan your spending. Also, Personal Capital doesn’t allow you proactively map out your desired spending in specific categories. Again, it’s just showing you what’s already happened.
If budgeting is what you’re after, Personal Capital falls woefully short, and in my opinion, YNAB is the way to go.
But don’t dismiss Personal Capital just yet. It has some remarkable features, which I’ll get to in just a minute.
Beyond budgeting, Personal Capital offers a much broader feature set. While its budgeting tools are lackluster, Personal Capital has various tools to help you track your overall financial picture. Before I get too carried away, though, let’s talk about some standout features in YNAB.
Standout Features: YNAB
First, YNAB is phenomenal at helping you track your progress towards spending and saving goals. Simply choose a target spending (or saving) amount for a given category, and set a date you want that money to be available. YNAB then tells you exactly how much money to allocate to that category each month.
When you follow this approach, YNAB can help you prioritize your spending across categories and help you see your progress towards each of your goals.
Next, while YNAB’s reporting/visualizations are a bit more simplistic, its budget reporting is very robust. YNAB allows you to track your month-on-month spending by category, so you can see where you’re improving and what categories might need some more work.
While countless other features make YNAB lead the pack amongst its peers (like its sinking fund functionality, customizability, and a great mobile app), there is one more feature to flag.
YNAB has a massive repository of budgeting tips available through its online resources. Wondering how to budget with a partner? YNAB shows you how. Curious how to budget if you don’t have a consistent W-2 income? You can learn that too. With the resources YNAB offers, all of your budgeting questions have answers – answers that can help improve your financial life. YNAB is serious about helping you get better at budgeting, and somehow they manage to make it fun along the way.
Standout Features: Personal Capital
Is Personal Capital good for budgeting? The answer is that it’s just okay, and using a dedicated service like YNAB is a much better approach. But Personal Capital offers a vast feature set of other personal finance tools unmatched by any other service.
In addition to the features I’ve mentioned earlier, below are some of my favorite Personal Capital features.
1) Retirement Planning
Wondering if you’re on track to meet your retirement plans? With Personal Capital, you can visualize your retirement savings to see if you’ll meet your goals.
The app performs a detailed scenario analysis to show you the likelihood of meeting your goals. It’s even customizable for everything from retirement age to spending in retirement.
It is an awesome feature!
2) Retirement Fee Analyzer
Investment fees are the enemy of financial success. Think I’m exaggerating? Just use Personal Capital’s Retirement Fee Analyzer to see just how much money you’re losing to fees. The results are often stunning.
Personal Capital will lay out your annual fees and show you exactly how much your portfolio is losing to fees, including how many years of retirement that is costing you.
If you ever wondered if the fees you’re paying are too high, you need to check out this feature.
3) Investment Checkup
Finally, Personal Capital can help you understand your investment portfolio, showing you everything from your asset allocation to the historical returns based on your portfolio mix.
If you’re unsure whether your portfolio aligns with your investing goals, Personal Capital can help you figure that out.
Personal Capital is a comprehensive suite of financial tools that helps you track your net worth, make sure you stay on track for retirement, and much more! The best part about Personal Capital is it offers a FREE way to track your investment and cash accounts and plan your financial future! Check out this review to learn more!
Now that we’ve covered the standout features let’s get into some specifics about each of these apps. When choosing a personal finance app, one of the most critical features is synchronization.
Whether it’s tracking your spending or your investments, you’ll want an automated system that makes it easy. Both of these services do an excellent job at syncing your data.
YNAB is a bit nuanced in that it automatically tracks your key budget-related accounts (like your checking account, savings account, etc.), but it doesn’t thoroughly track your investment accounts.
Personal Capital, on the other hand, does an excellent job of syncing your investment accounts. However, some of my accounts are sometimes a bit slow to sync to Personal Capital.
In other words, both of these apps sync well, but neither of them is perfect.
In comparing the YNAB vs Personal Capital mobile apps, I have to give the nod to Personal Capital. Personal Capital’s interface is nearly identical on the desktop, tablet, and cell phone apps. If there’s a feature you love on the desktop website, expect to see it on mobile.
YNAB’s mobile app is also excellent. While it doesn’t give you quite as many pretty reports as Personal Capital, it gives you the exact functionality you need to manage your budget on the go. However, one area where YNAB falls short is that not all desktop functionality is available on the mobile app. Feature parity has improved recently, but sometimes you still need to login to the website on a desktop computer to make specific budget tweaks.
When it comes to pricing, I would argue that both of these services are excellent values.
As of this writing, YNAB comes in at $11.99/month or $84 per year. Now, you may be thinking that it is expensive when there are other free budgeting services. However, YNAB more than pays for itself. How? Because the app saves the average user hundreds of dollars in the first year, something that few other budgeting services can claim. You can signup for a free trial to see if you like YNAB. And if you ultimately become a paying subscriber and decide it’s not for you, YNAB offers a no-questions-asked money-back guarantee.
Personal Capital’s pricing model is different. Personal Capital is free. Yes, you heard me right. It’s entirely free. With that said, there is no reason not to sign up for Personal Capital. The way Personal Capital keeps its software tool free is that it also offers an advisory service. However, you can use Personal Capital without opting into the advisory service – that’s what I do.
In terms of customer service, YNAB is a home run. Anytime I have had to contact support via email, they have been knowledgeable, responsive, and resolved my issue quickly. Unfortunately, there is no phone support, but you should be covered between the email support and the robust online help center.
Similarly, Personal Capital offers support via its online contact system. While Personal Capital does have a phone line, this likely isn’t entirely helpful in receiving product support (as it’s primarily for those using Personal Capital’s advisory service).
When it comes to financial data, security is always top of mind.
YNAB’s security policy is exceptionally robust. In fact, of all the financial services I’ve ever used, I have to give YNAB credit for being the most transparent. YNAB encrypts all of your data, and YNAB does not access your data unless you explicitly request them to do so (i.e., for troubleshooting). Additionally, when linking your account credentials, YNAB does not have access to your login information. Rather than bore you with the details, I suggest you check out YNAB’s security policy for yourself.
Wondering if Personal Capital is trustworthy? The answer is yes. Like YNAB, they use military-grade encryption technology to keep your data safe. Additionally, you can rest easy knowing that Personal Capital does not sell your financial data. Because they are a fiduciary, they maintain strict controls as they relate to your data. Check out their security policy if you want to learn more.
YNAB vs Personal Capital: Which is Best for You?
Let’s get down to brass tacks. Comparing YNAB vs Personal Capital, which is best?
Unfortunately, like many things in life, it depends.
If you’re looking for the best available budgeting solution, YNAB is my top choice. It’s the budgeting app that I use, and I think it’s the best option for most people.
However, if you’re looking for a service to help you get a grip on your overall finances, including investments, retirement and savings plans, and more, Personal Capital is the way to go. It is simply the best holistic money management tool I have used.
Asking whether you should use YNAB or Personal Capital is the wrong question to ask. Instead, you should be asking how each of these apps can help you improve your finances. These apps excel in different areas. I think you should be using both YNAB and Personal Capital, as they are two of the best financial tools available. I use both of these tools regularly, and I think you should too.
So, sign up for a YNAB trial to start getting your budgeting in order, and then create your Personal Capital account to start tracking your overall financial picture. Once you do, you won’t believe how quickly your financial picture changes!