Keeping track of your full financial picture is no small task. There are a lot of moving parts. You set up a budget, track your expenses, and then review. Plus, you make investment decisions and monitor your net worth.
All of these aspects of money can be a lot to balance. Is there really a single financial software platform that can do it all? Thanks to the free tools that come with Personal Capital, there might be!
In this Personal Capital review, we take a deep dive into one of the personal finance community’s favorite tools. Explore how Personal Capital works and then discover the various tools within it that can help you build wealth for free by focusing on your finances today and your future goals.
What is Personal Capital?
Personal Capital is often compared to tools like Mint and other budgeting tools, However, Personal Capital is so much more than a budgeting app. This free tool is actually a comprehensive piece of financial software that is accessible through both desktop and mobile devices.
Personal Capital allows users to keep an eye on their financial health and investments with a few easy clicks. Personal Capital promises to allow you to “get a 360-degree view of your money”. Whether you already do regular money check-ins or are looking for an easy way to start, Personal Capital might be just the tool that you and your family need!
How does Personal Capital work?
Like other fintech apps, Personal Capital does a lot of the heavy lifting for users. By authorizing access to your other money accounts, Personal Capital pieces together a total money picture for you.
Here’s how you can get started with your Personal Capital Dashboard in four easy steps:
- Create a Personal Capital account. Sign in with your email and phone number, then confirm your identity. They take security seriously–more on that later!
- Link your financial accounts. Search by the name of each financial institution or type in the web address.
- Update your login credentials for each account. Personal Capital then verifies each account with the financial institutions.
- Verify that all of your accounts are added. You can now see them all in one place!
Users can link their checking and savings accounts, as well as credit cards and investment accounts. Unlike some apps that focus solely on budgeting, Personal Capital encourages you to link as many accounts as possible. The more information you share with Personal Capital, the more detailed your financial picture becomes.
To streamline the process even more, make sure that you identify all of the accounts you would like to add and find your login credentials ahead of time. If you leave off an account or need to remove one later, it is very easy to edit your Personal Capital Dashboard.
What free tools does Personal Capital provide?
One of the biggest reasons why Personal Capital has so many devoted fans is because of the free financial tracking tools it offers. After you set up your Personal Capital account and link your accounts to it, you can take advantage of these free tools to help you build wealth.
If you’re like us, you know what it’s like to have app overload on your phone. One of the best parts about Personal Capital is that all of these different tools are housed within the app in order to help you streamline your financial checkups.
Here are all of the tools that you can access with Personal Capital.
The Personal Capital budgeting tool has two distinct features.
One part of the tool allows you to analyze your spending and savings. Users can sort by date, category, or merchant. This feature is helpful for people who want to keep a closer eye on where their money is going. After all, it’s important that your spending (and saving!) align with your goals.
The other aspect of the budgeting tool will feel familiar if you’ve tried out other budgeting apps in the past. The Personal Capital budgeting tool allows you to set a spending target for the money. Then, you can track your spending over time.
If you find yourself struggling with setting an accurate spending target, Personal Capital can help. The app sorts your transactions by type, so you can see where the majority of your money is going.
Additionally, if you want to customize your transactions, you can use their general categories or get as specific as you’d like. Perhaps you want to categorize each kiddo's extracurricular activities or label different household expenses. Get as detailed as you need to be!
You can even separate out work-related expenses if that’s something you get reimbursed for and don’t want it to come out of your personal budget. The flexibility of this tool is something that we love.
If you are new to budgeting, Personal Capital can do a lot of the work for you. However, as you are ready to really drill down into the numbers, you have the option of getting as specific as you want.
One of the most effective ways to keep your finances healthy is to track your spending and understand your cash flow.
Fortunately, Personal Capital makes this very simple. Acting as a personal finance manager, Personal Capital tracks your income and your expenses. Then, all of that information is transformed into user-friendly charts that let you see how your cash flow changes from month to month.
Keeping an eye on your cash flow is especially helpful if your income varies from month to month. Many people recommend that individuals with a variable income budget with either their highest expenses (so you know you can cover everything!) or lowest income in mind.
Personal Capital takes all the guesswork out of that by capturing the information in one sleek tool.
If you’ve ever seen someone discuss their net worth in detail, there’s a good chance they’re using a tool from Personal Capital to review it. The net worth tracking feature is one of the most beloved aspects of Personal Capital, and for good reason!
The formula behind calculating a net worth isn’t complicated. You simply total up all of your assets and subject your liabilities.
However, that’s easier said than done many times. The more accounts you have, the more complicated it can be. Unless you have Personal Capital. Then, it’s as simple as clicking over to the net worth tool to see where you stand.
The Personal Capital app is designed to give you a full picture of your financial health, and the net worth tool is an easy way to review it. This tool captures all of your account balances–from savings to retirement–and your cash flow, creating a single chart to help you see your net worth.
You also have the option of adding real estate to your net worth. Personal Capital and Zillow can be linked to provide a ballpark figure on your property values to see how that shapes your net worth as well.
Does it ever feel a bit like sorcery when people correlate your spending today to how it impacts your retirement years or even decades from now?
One of the biggest struggles with finances is that it is so difficult to make the future feel real. Yet that’s exactly what the Personal Capital savings planner tool is designed to do.
This tool creates an annual savings range for users. Then, it helps project the prospect of you reaching your retirement goals based on that savings.
While it still isn’t a crystal ball and therefore can’t promise to be 100% accurate, it can help you see if you’re in the ballpark. Sometimes, it seems like the sacrifices we make now will never pay off. This tool can give you some of that instant gratification that you need to boost your motivation and buckle down to ramp up your savings rate.
How can Personal Capital tools help me plan my retirement?
The Personal Capital tools like the budgeting tool and savings planner are focused on what your money looks like today. However, the people behind Personal Capital know that what we do with our money today drives our future. That’s why Personal Capital also offers free tools to help you plan the retirement of your dreams.
Understanding the Personal Capital investment philosophy
Personal Capital’s investment philosophy is at the core of their retirement planning tools. They aim to help users do three things:
- Better understand your asset allocation.
- Use diversification to your advantage.
- Optimize your taxes.
What's the purpose of focusing on those three things?
By understanding your asset allocation, you can ensure that your portfolio is working hard enough to meet your retirement goals. Diversification helps your investments weather storms, and optimizing your taxes means that you keep more of your money working for you.
These components of investment and retirement planning sound complicated (and it can be), but thankfully, Personal Capital offers tools to simplify all of that.
Personal Capital pulls information from your investment accounts to give you a snapshot glance of your portfolio with their investment checkup tool.
Within that tool, you can analyze your portfolio using the “Allocation” option. Personal Capital will categorize and color-code your investments.
By breaking your portfolio down into cash, US stocks, international stocks, US bonds, international bonds, and alternatives, you can see if your asset allocation matches your risk tolerance and your investing goals. If Personal Capital determines that your portfolio is too risky given your projected retirement date, it also suggests ways to achieve similar performance with less risk to your retirement goals.
You can also take a deeper dive, exploring everything from market cap, industry, and more. If you’re someone who really loves to dive into the numbers, the investment checkup tool also gives you the option to explore how your portfolio would have performed in the past.
While past performance can’t predict the future, it can help to educate you more about market history and your own investment strategy. That's in line with Personal Capital's overall goal–to help you get a better understanding of finances.
Fees are a hidden saboteur in any retirement plan. Personal Capital is here to help!
After you link your investment accounts with Personal Capital, the fee analyzer tool gets to work. It will uncover hidden fees in your accounts. Plus, you can also use the tool to research ETF or index funds that can serve as a substitute for any high-fee mutual funds. This fee analyzer tool makes it easy to see why index funds really are the perfect tool to reach financial independence.
You can also use the fee analyzer tool to see how your contributions, employer match, and other fees will impact your retirement.
Are you someone who is struggling to make the commitment to send more money to your 401k or other retirement accounts?
By using this part of the analyzer tool, you can see how much a difference it will make in your retirement planning by bumping up your contribution. Let Personal Capital help with the visualization. Then, it’s a no-brainer to increase your contribution the next time you earn a raise or receive a bonus.
Whether you intend to go back to school yourself or you are looking to help your children or grandchildren afford school, the Personal Capital education tool can help. This powerful tool will help you estimate how much money you need to save today to afford the cost of education in the future.
When you use the education tool, you can create an education goal based on the age of the prospective student and the type of school they hope to attend. Afterward, you can either manually enter your current savings or link any accounts. Then, the average cost calculator will ballpark the expenses for you, including tuition, housing, and supplies.
The planner even accounts for inflation, giving you a more accurate number to use to guide your savings strategy. Once you have a goal set up, you can then review how this education goal fits within your larger financial picture using the Personal Capital retirement planner tool.
What does retirement mean to you? If you are like some people, you are aiming to retire at the traditional retirement age, like 65 or 70. For others, though, their retirement age might be much lower. This is especially true for people who are pursuing FIRE (Financial Independence Retire Early).
No matter when you intend to retire, the Personal Capital retirement planner can help you see if you are on track.
This tool evaluates your savings to see if you are on track to retire based on your target retirement date. It also projects your estimated monthly income. This can help you ensure not just that you get to retire, but that you get to retire on your own terms, living the life you want.
One of the biggest concerns people have about retirement is that they aren’t always sure how their portfolio will weather big storms. The recession simulator portion of the retirement planner tool allows you to see how you would have fared during the Great Recession or the Dotcom Crash. While this doesn’t mean your retirement plan is infallible, it does offer an important perspective.
Other key features of the retirement planner tool include the ability to run different scenarios. These scenarios can be especially helpful as you learn more about financial independence or navigate big life events. This tool allows you to see how your retirement is impacted if you save more (or less) or retire a few years earlier.
You can also anticipate big expenses, such as purchasing a second home or sending your kids to college. To make your planning more precise, you also have the option of adding different income events. This feature allows users to account for Social Security, pensions, and even rental income.
You can also generate a spending plan with the retirement planner tool. That way, you can get an in-depth look at what your spending might look like in retirement. All of the various features help you see what your future looks like now. They can also help you anticipate the changes you might make to improve your financial picture.
What advisory services does Personal Capital offer?
In addition to the free tools to help you build wealth, Personal Capital also offers wealth management advisory services. In order to access these services, you pay based on the size of your investment portfolio. If you have less than $1 million in assets under their management, you will pay 0.89% each year to use their advisory services. The more assets you have under their management, the lower the fee becomes.
While these services certainly aren't free, they are in line with other fee-only advisory services. Since they are fee-only advisors, you don't have to worry about hidden fees or pressure to purchase products that don't align with your plans.
What is Personal Capital Cash?
In addition to their free tools to help you build wealth, Personal Capital also now offers access to an account called Personal Capital Cash.
This account is FDIC insured, and there is no minimum daily balance. While the interest rate is not as high as online high-yield savings accounts, Personal Capital Cash could be a nice option for people who want to streamline their finances, managing everything within one app.
Personal Capital Review FAQ
Personal Capital has nearly 2 million registered users. With so much interest in the tool, there are bound to be more questions about how Personal Capital works. Here are our answers to some of the most common questions about this financial platform.
Is Personal Capital free?
The Personal Capital app is free to use, including all of its tools that can help you build wealth.
However, once your net worth crosses the $100,000 mark, you can expect a phone call inviting you to learn more about their wealth management services. If this sounds like a catch, don’t worry. Personal Capital users happily report that if they do pass on the wealth management services, the calls stop.
Personal Capital also pledges to never share your information with other companies, which means one call from Personal Capital is all you get. No telemarketers, no-nonsense.
How long does it take to set up a Personal Capital account?
The amount of time it takes to set up an account definitely varies by user.
Overall, the process is straightforward. However, the more accounts you add (and the more login details you need to recall or reset), the longer it takes.
Most people estimate that they have everything set up within 20-30 minutes. It’s certainly something that would make a nice complement to your next money check-in session.
How does Personal Capital keep my information safe?
Personal Capital is committed to keeping your account safe. Account safety is an important part of your financial health, and that’s why Personal Capital will never sell your data. In addition to safeguarding your data, Personal Capital has a security team that will continually review their security best practices to stay ahead of cybercriminals.
One of the most important ways your account stays safe is by encrypting your data. Additionally, no one at Personal Capital can access your login credentials. That means that the only person who is accessing your account is you!
Additional Safety Measures
Another safety measure that Personal Capital put in place requires you to authenticate each device that accesses your account. Since Personal Capital is so mobile-friendly, it’s also a nice touch that it features Touch ID authentication on iPhones and mobile-only PINs for both iOS and Android devices.
When you use the financial software, you can be confident that their encryption is rated higher than most banks. Personal Capital also prides itself on being at the forefront of cybersecurity and has a team dedicated to researching improvements on an ongoing basis.
Review more about Personal Capital and their commitment to your safety here.
Do I have to link my accounts to use Personal Capital?
Yes. Unlike some apps that give you the option to manually input data, Personal Capital requires users to link the Personal Capital accounts with other financial accounts. Rest assured that keeping your data and information safe is their top priority.
How is Personal Capital different from other budgeting tools?
What sets Personal Capital apart is the vast array of tools it offers via a single financial software solution.
Other budgeting apps like YNAB or Mint might be more detailed in terms of goal setting with your budget.
However, where Personal Capital truly shines is its ability to help users review their budgeting and saving today. Then you can see how those habits are shaping your financial future with all the other tools that are available within a single app.
What do I do if I need help with Personal Capital?
Personal Capital really is focused on helping people put their money to work for them. If you need help with Personal Capital, there are several different ways you can get your questions answered.
The Personal Capital blog offers a closer look at financial topics. From investing and retirement to taxes and insurance, there are myriad articles that will help you get a better handle on topics that impact your finances. They're reader-focused, which means they're written for you. No MBA required!
Additionally, you can access their robust Support page.
On their Help page, you can access their Personal Capital Frequently Asked Questions or send a direct message using the Contact Us feature.
This feature can help with everything from login issues to product feedback and everything in between. Users say that responses are timely and thorough.
Can I export data from Personal Capital?
We know there are some true spreadsheet lovers among us. No piece of fintech is going to replace your commitment to Excel, and that’s OK. Personal Capital understands, too. That’s why they make it easy to review and export your data from Personal Capital to Excel.
Once you log into your account, navigate to the Transaction page. From there, you have the option to export your data as a CSV file. That allows you to open it with Excel or convert it to Google Sheets.
What if I’m unhappy with Personal Capital?
With 1.7 million users, it’s hard to imagine that you will be unhappy with the financial software. However, Personal Capital has robust user support and help options if you need to troubleshoot or ask a specific question.
If you really want to close your account, Personal Capital makes that process easy as well.
Log into your account and locate your name at the top of the Dashboard. Navigate over to the Settings option, and then scroll to the bottom. Once you are there, you will see an option to Delete User Account to remove your information. It's that simple!
How does Personal Capital make money?
This question is fairly common, and it’s an important part of being an informed consumer.
While many financial tools make money through recommending products or advertising, Personal Capital does neither. It offers robust free tools to all of its users.
It also offers people the option of using their wealth management advisory services, which does come with a fee.
Key Takeaways from our Personal Capital Review
When it comes to money management, some people assume that the process requires expert input. Even if you don’t feel like a financial pro, Personal Capital offers the tools and support necessary for anyone to get a complete understanding of their current financial health.
Maybe you want to focus on creating a budget that works for your family and get your spending under control. Maybe you’re on the path to FIRE and want to see how your investment and savings stack up. Perhaps you're somewhere in between. Regardless of where you are on your financial journey, Personal Capital can help.
Tools like the budgeting and cash flow tools will allow you to ditch your debt. They can also help you design a lifestyle that is aligned with your goals and priorities. To encourage you to be future-focused, Personal Capital also offers tools like the investment checkup and fee analyzer to help take the guesswork out of reaching your retirement goals.
While no one piece of financial software can do it all, Personal Capital comes close. And the best part is that these robust tools that are designed to help you grow your wealth are completely free. Click here to get started with Personal Capital today to review your current financial snapshot.
What do you think of this Personal Capital Review? Which of their free tools is your favorite?
Please let us know in the comments below.
Personal Capital compensates Andy Hill (“Author”) for providing the content contained in this blog post. The opinions expressed in this publication are those of the authors. Advisory services are offered for a fee by Personal Capital Advisors Corporation (“PCAC”), a registered investment adviser with the Securities and Exchange Commission. Registration does not imply a certain level of skill or training. PCAC is a wholly owned subsidiary of Personal Capital Corporation (“PCC”), an Empower company. PCC is a wholly owned subsidiary of Empower Holdings, LLC.© 2020 Personal Capital Corporation. All rights reserved.