The following Personal Capital review is a true record of our experience, but it does include affiliate links. If you choose to join, we’d really appreciate it if you used our links. You’ll get great free tools and we’ll receive a small commission for the recommendation. Thanks in advance! XOXOXO
Welcome back frugal fanatics! This is our second full version of our Personal Capital review. We’ve been using the software at Personal Capital for several years now and have a great handle on how it all works. So, we wanted to share our experience with you and help you make the most of the free tools they have available.
In our opinion, Personal Captial provides the best free money tools around. Better yet, there’s no gimmicks or fine print to worry about. Just sign up for an account and you can use the tools for free. This Personal Capital review will cover each of the tools in-depth, explain how we use them personally, and answer some of the most frequently asked questions.
So, let’s get started, shall we?!?
Introducing Personal Capital
Y’all know that I love things that are free, right? I mean, when I hear the word “FREE,” I get all kinds of excited. My insides twist themselves in knots. My hands start to shake, a little drop of drool forms at the corner of my mouth, and I can barely keep myself from doing a Tom Cruise couch jump. It’s like I’ve drank 6 cups of coffee…without the constant bladder pressure.
So, yeah. I love me some free.
Which is why I’m so freakin’ excited to introduce you to the best free money tools around! Holly and I have used them for years. Heck, she even freelances at their blog. So yeah, it’s safe to say that we think these guys are great. Say hello to Personal Capital!
Seriously folks, if you haven’t started using Personal Capital’s free money tools, you’re really missing out. The free financial software at PersonalCapital.com helps you track your spending, analyze your retirement portfolio, and track your net worth. The best part of all is that it’s completely FREE! There’s no obligation for you to buy anything. Simply link your information and track all of your accounts, all in one place.
We have used Personal Capital for years. We love it, and we think you will too. These are simply the best free online tools around. Let’s start by taking a look at the tools themselves.
Personal Capital’s Free Financial Tools
Personal Capital has a super sweet dashboard which provides a snapshot of your complete financial picture. Whether you’re a newbie or an old pro, the dashboard is easy to use, allowing you to view all of your accounts in one place. Here you’ll find balances for all of your linked bank accounts, a list of your current investments and their balances, as well as a quick peek at your monthly cash flow. You’ll also be able to check out your current net worth on an easy to read graph. Here’s a peek at the dashboard:
How awesome is that?!?
How We Use It: Of course, the dashboard is the first thing we see each time we log into our account. It allows us to quickly see if there’s been any major changes to our financial standing. We simply check out what’s been happening on the dashboard, then move on to the other tools for more in-depth info.
Net Worth Tracker
Your net worth measures the worth of your assets versus the amount of debt you owe. It’s the best metric to measure whether you’re winning with money over time, and it’s something that everybody should know. It helps you understand whether your financial situation is improving or getting worse, which is why it’s so important to track this number.
Using the free financial tools at Personal Capital makes tracking your net worth a breeze. Just link all of your asset accounts (banks, investments, etc.) with your liabilities (mortgage, student loans, car loans, credit card debt, etc.) and voila! Personal Capital does the math for you, plopping your number right on the dashboard. Using the software, you can easily track your financial progress month after month – or even daily if you’d like. Here’s a shot of what you’ll see:
How We Use It: Personally, we’d drive ourselves crazy if we checked in on our net worth every day. We look at building wealth as a long-term proposition and try to keep emotions out of our decision making as much as possible. Since our investments and retirement accounts are part of the equation, net worth can vary greatly from day to day. Instead of riding the emotional highs and lows of the market, we take a look at our net worth about once a month or so, just to make sure we are staying on track. Again, for us, building wealth is a marathon, not a sprint.
Cash Flow Tool
One of my favorite features at Personal Capital is the Cash Flow Tool. To seize control of your money situation, you need to know how much you’re spending. More importantly, you need to know what you are spending on! Then, you can accurately compare your spending to your monthly budget, allowing you to fix holes in your planning or find creative ways to further reduce your monthly spending.
The fact is that tracking your expenses can be a total PIA. You need to constantly watch and record each and every dollar that you spend. It kinda sucks. But, not with Personal Capital. Once you link all of your accounts, Personal Capital will track and categorize your spending for you. You can view your each transaction by category, merchant, or date, making it super simple to see where your money is going. Frankly, it is a huge time saver…and quite possibly the most valuable free tool you’ll ever use. Here’s an idea of what the overview looks like:
How We Use It: We use the Cash Flow Tool all the time. Since we rarely use cash, it’s a great way for us to track how much we’re spending. One of our favorite money management tricks involves the Cash Flow Tool. After creating your budget, check in with the cash flow tool a few times a week. Compare the amount of money you planned to spend with your budget to the actual amount you spent according to the tool. It’s a great way to keep track of where you stand and help you stay on budget throughout the month.
Investment Checkup Tool
The Investment Checkup Tool is another great addition to the Personal Capital lineup. After you link your accounts, this tool analyzes how well your investments are doing and provides ideas for how they could do even better. You’ll even get a customized investment plan based on your current portfolio holdings and stated goals.
Specifically, the tool creates a target portfolio allocation that’s ideal for your financial situation. It then compares that target allocation to your current portfolio and makes general suggestions regarding your level of risk and potential for returns. For beginners, that might all sound a bit technical, so let’s boil it down a bit more. The Investment Checkup tool helps ensure that you have the proper amount of exposure and diversification in your investment. Here’s a quick look at what you might see:
How We Use It: This is another valuable tool that we use on a semi-regular basis. Because we are DIY investors, we’ve used the suggestions on a number of occasions to rebalance our portfolio so it aligns with our ideal asset allocation mix. Before we make a change, we always compare Personal Capital’s suggestions with those provided by our brokerage account. When we get a suggestion from both to rebalance our holdings in a certain manner (which is almost always the case), we go ahead and make the change.
Another great tool that is offered by Personal Capital is the “Fee Analyzer.” If you want to find out how much your current investments are costing you, this is the tool for you. The Fee Analyzer searches for hidden fees and shows you how much they’re costing you over time.
Many of us depend on mutual funds to help fund our retirement. Although mutual funds can be a great investment vehicle, they can also be costly. One of the best things about the fee calculator is that it clearly exposes how much those funds are costing you…and how they can affect your retirement savings. Here’s what the Fee Analyzer looks like:
How We Use It: This tool is super valuable if you’re using a financial advisor or have work-sponsored retirement accounts. While you’re going to incur costs with any investment, one of the keys to long-term growth is keeping those costs down. Of course, if great advisors often can save you thousands by keeping you on the right path and helping you not to make decisions based on fear and panic. Consider that before making any sort of changes based solely on fees.
Last but not least, Personal Capital also offers a fantastic retirement planning calculator. With this tool you can set your retirement goals and measure whether your financial plan is on track to meet them. It’s a pretty cool little tool, and – again – it is completely free!
The Retirement Planner isn’t just a simple calculator, though. It also helps you plan for big expenses (like college, weddings, etc.), income events (like raises and social security payments), as well as analyze your spending and savings habits. For reals y’all, it is a pretty powerful tool. Best of all, it’s completely FREE! Hopefully, your Retirement Planner will look something like this:
How We Use It: The Retirement Planner is another tool that we use on a fairly regular basis. It’s not only a great way to make sure that you’re on track for retirement, we’ve used it to help us see the big picture. From time to time, we have a little bit of a panic attack about where we stand financially. (What can I say? We’re human.) By heading back to the Retirement Planner, we’re almost always talked off the ledge. It helps us realize that we are, in fact, doing great. Not only will we be able to retire on time, our plans for early retirement or on-track as well.
Personal Capital: Frequently Asked Questions
No Personal Capital review would be complete without answering a few lingering questions. Here are some of the most common:
Is Personal Capital Really Free?
Yes. Using Personal Capital’s financial software is completely free. The tools are free to use with absolutely no obligation for you to buy anything. No cost. No catch. Start using the free tools now by signing up for an account here.
How Does Personal Capital Make Money?
Simple. They provide wealth management services.
After linking $25,000 in portable assets, you can have Personal Capital professionally manage your portfolio. You’ll get 2 licensed financial advisors whose job is to help you grow and optimize your investments. As a “Registered Investment Advisor” (RIA), Personal Capital will charge you a percentage of the total amount of money you have managed.
Again, it’s completely your choice whether you join Personal Capital’s wealth management program. You make the call. Even if you don’t join, you can still use the tools for free, no questions asked.
I’m Interested in Wealth Management Services. What are the Fees?
If you choose to do business with Personal Capital, you’ll be charged a fee based on a percentage of the total balance you have invested through them. Personal Capital is not the cheapest online advisor around, but they do offer a more hands-on approach using live advisors than some other competitors. As if August 2016, fees are as follows:
- Up to $1 Million Invested: 0.89% annually
- $1M to $3M Invested: 0.79% annually
- $3M to $5M Invested: 0.69% annually
- $5M to $10M Invested: 0.59% annually
- Over $10M Invested: 0.49% annually
Once again, this is an optional service. Using their financial tools is completely free, regardless of whether you choose to invest with them.
Personal Capital Review: The Verdict
As this Personal Capital review comes to a close, I’m sure you already know what our verdict is. We absolutely love using Personal Capitals free financial software. And since you’re under no obligation to use their wealth management services, we give Personal Capital a 5 out of 5 rating!
Guys, I’m not kidding when I say that Personal Capital has the best free money tools around. They do. The tools are simple to use, easy to understand, and they are completely FREE! You know I love that.
We use them. We love them. We think you will too.