Wesabe Review

Wesabe is an online finance tool and community designed to help you manage your money better, both by giving you a holistic view of your finances, and providing you with a wealth of forum advice to make smarter spending and saving decisions. Is Wesabe really the next-generation answer to contemporary financial woes, or just another Web 2.0 fad? We break it down in this review.

PRODUCT OVERVIEW

First and foremost, Wesabe is a free Web application designed to integrate financial statements from your bank, credit cards and investment accounts into a single interface. Put simply, it gives you a big-picture view of your spending and saving. (For those that have read our review of Mint.com, much of this will sound familiar.) It’s intended to be the Web 2.0 answer to Quickenand the late MS Money, but with a twist.

Wesabe combines its basic Web application with an online community, most of which is comprised of an online forum, made up of like-minded spenders and savers. Rather than give you canned financial advice from a Web magazine (like MS Money) or asking you to hew to a one-size-fits-all automated fiscal plan (like Quicken), Wesabe plugs you into the so-called wisdom of crowds. Wondering what part of your household budget to cut, how much you should be saving for a house, or whether you’re paying too much for a gym membership? Wesabe’s other members are there to answer — with all the pros and cons of any online forum conversation. There’s some spam, some nutcases, and some lag between questions and answers, but the answers themselves are often pretty useful.

Naturally, there are some security concerns with putting so much sensitive data into a Web application, and Wesabe does give some assurancesthat your identity and data are kept encrypted. Since we’re not clear on how Wesabe generates revenue, we suspect it’s based on some kind of data analysis, which gives us pause about long term privacy and data security.

INSTALLATION & SETUP

To join Wesabe, just click any of the ubiquitous orange sign-up buttons that appear on most every page of the site. From there you’ll be taken to a signup page which requires an e-mail address, password, screen name, ZIP code and country of residence — plus the usual terms & conditions acceptance.

Completing the signup brings you to a welcome screen, where you are offered a guided setup process, or allowed to start exploring the site on your own. Like most users probably will, we accepted the setup help. This, in turn brought us right to the Add an Account page, which lets you search out and select your bank for assistance in importing your financial data. (You are also offered the option of listing a Cash Account for any hard currency you possess outside a bank.)

This, unfortunately, is where the wheels started to come off. Much like AceMoney, Wesabe asks that you manually download a data file from your bank and then manually upload that same file to Wesabe.

Mint, Quicken, and MS Money all have the capability of directly downloading our data from our admittedly obscure credit union, and Wesabe’s requirement that we manually handle that transaction is a rather daunting feature deficit. Wesabe officially cites security concerns with using third party services to download such data as its reason for excluding an automatic download feature. For our part, we’d rather have an encrypted third-party transaction than risk all the potential versioning errors and file-management headaches that can be associated with manual downloads and uploads.

Wesabe also wanted us to classify what kind of account data we were downloading, from which account number, and what the current balance of each account was. Again, Mint, Quicken, and MS Money could all gather this information automatically without risking user error in the setup process.

It was only after we set up our first account and imported the data that Wesabe wanted us to establish some security safeguards around the information, asking us to create a second password and some security questions.

All that to add one account, and we needed to repeat most of that process for each savings, checking, credit card, and investment account we wanted to track. Not an enticing prospect. After that, we finally got to actually put our data to work, which was a slightly more satisfying experience.

INTERFACE & EASE OF USE

As we’ve stated before, the single greatest obstacle for all personal finance applications to overcome is the crude nature of most every user’s basic financial data. Bank statements don’t include enough information for any program to properly categorize and analyze all your transactions. For debit card users, most of your transactions will just list a date, amount, and point-of-sale code number, leaving it to you and your receipts to figure out exactly what goods and services were purchased. Old-fashioned check numbers are a little worse, unless you get a cancelled check image with every transaction.

Thus, the first job of every personal finance app is to make identifying and categorizing your transactions data easy. Wesabe does a fair job of this — provided you’re okay with the idea of open-ended tagging.

Unlike every other personal finance app we’ve seen, Wesabe does not have any default financial categories like Mortgage/Rent, Groceries, or Utilities. Instead, you are invited to create your own list of categories using self-chosen tags, much like users tag photos on Flickr or links in deli.icio.us.

This has the advantage of sparing us the trouble of correcting any mistakes an auto-categorization system might make (like deciding whether any transaction with the word Gasin it is a utility company or a filling station) and it means that the categorization system is personalized for your use. Moreover, tags allow overlapping categories, so you can distinguish between car washes and brake jobs within car maintenance expenses by tagging each respective expense as car, car washand car, maintenance.

The downside to tagging is that, unless you’re very disciplined about using the same tags over and over again, you might split your expenses into duplicate, similar categories. For example, one month you might tag the Wash&Shine as car wash, the next you might accidentally use carwash, and Wesabe doesn’t make it easy to correct the mistake. Thus, you’ll have tow categories dividing up what is really just one set of expenses.

The good news is that Wesabe has the simplest bulk-categorization system we’ve yet seen. If you have a repeat transaction — like a regular paycheck, mortgage payment, or even favorite grocery store — Wesabe offers the option of automatically tagging each similarly listed transaction with the same tag. Thus, Pizza Hut can become tagged as eating out, fast foodevery time it shows up in your bank statement.

Once you’ve categorized all your transactions, you’re ready to analyze your spending and start setting some budget limits. Hopefully, that’s all you want to do, because those are the only features that Wesabe offers.

OVERALL PERFORMANCE

For every tag you create in Wesabe, you can view your spending in the category, and set a budget limit on how much you want to spend in that category.

You can also view your overall spending by account, and by for you complete financial profile.

Finally, in one of its few advantages over Mint, you can track your past income, so you can see how much money you tend to bring in.

This is the basis of all of Wesabe’s automated guidance and analysis tools, and they’re a fairly shallow lot. More shallow, in fact, than even the lightweight tools offered by Mint. You can’t pay your bills or conduct any transactions from within Wesabe, nor can you project out your future cash flow or schedule future bills. Wesabe is a souped-up bank statement, and nothing more. If you want a one-stop shop for managing your finances, Wesabe isn’t it.

The real meat of Wesabe is in the online community, which offers the guidance that Mint, AceMoney, and most other financial planning applications don’t provide.

You can join any of several dozen subject-related groups, with such evocative titles as Paying It Off, Saving Up, or Spend Smarter. You can also browse just the most popular groups, which will put you where the current forum activity is at. Any groups you join will appear on your main account analysis page, highlighting their most active discussion threads.

The first red flag around forums was our discovery that Making Wesabe Betteris consistently in the top three most popular groups, meaning that feature requests and troubleshooting are a large part of Wesabe’s online discussion, and thus that the site isn’t as well-tailored as you might expect. We’re all quite impressed that you can enter transactions into your Wesabe account using Twitter and/or your smartphone, but we’d rather you worked on automatic downloads of bank statements first.

That said, the discussions within the Wesabe community were — by forum standards — very on-topic, spam-free, and helpful. Wondering what percent of your budget should go towards long-term savings? Wesabe has a several threads dedicated to the topic, each offering hard numbers and anecdotal advice which, to our surprise, proved very helpful in sketching out a household savings plan. As is expected with a Web-based application, the audience appears to skew a bit young, with many threads centering around paying off college debt, setting up a grad-school-friendly budget, or buying a first car, house, or medical plan. Put simply, we didn’t see a lot of near-term retirement-planning advice in the forums.

CONCLUSION

Wesabe is a very lightweight financial management Web app with a lively and engaged community bolted onto the side. We can and would heartily endorse anyone joining Wesabe’s discussion for thoughtful, open, and honest advice on financial issues and household budget planning. You won’t find rarified debates on the Fair Tax or rants about the WTO, but you will get tips on helpful online coupon sites and advice on how to pay off your credit cards.

As to the actual Web application, we don’t have much good to say about Wesabe. The tag-based categorization seems more useful in theory than in practice. The manual data uploads are more trouble than they’re worth and, like the tags, needlessly susceptible to user error. The analysis tools are more cute than helpful. Everything feels lightweight and entry-level.

Bottom line: Wesabe is a great financial planning community that is overly preoccupied with a not-ready-for-prime-time financial Web app. Go there for the advice, and do the best you can with the tools.

PROS

• Vibrant, helpful forums
• Intuitive interface
• It’s free

CONS

• No bill-pay features
• No automated data download
• Lightweight analysis tools