Ask Stacy: How Safe Are Budgeting Sites Like Mint and PowerWallet?

Online budgeting sites Mint and PowerWallet require that you enter your most personal financial information, including bank user names and passwords. Can these sites be trusted?

Both techniques work, but are time-consuming. And when it comes to things like budgeting, the less hassle, the better.

Finally, someone came up with an idea to automate the process. You give a site or app your checking and savings account numbers, and based on what’s happening in those accounts, it automatically tracks and categorizes your income and expenses for you. You provide a budget, including your goals and spending limits; it tells you instantly if you’re on track.

Just as online shopping can beat traditional trips to the store, these services beat the pants off traditional budgeting methods. They’re simply easier.

Why we partnered with PowerWallet

There are several sources for online budgeting sites and apps, any of which will get the job done. Here’s why we chose to partner with PowerWallet.

I’m nearly 60, which puts me at a disadvantage tech-wise to many in the online world. But as many of you reading this can verify, being older also has its advantages. One is experience. Another is connections.

Long before there was an Internet, I was doing personal finance stories on TV. As a result, I came to know the owners and managers of many financial companies, from banks to credit counseling agencies. One example? PowerWallet. Bob Sullivan (not the Bob Sullivan whose articles appear on MTN) and Howard Dvorkin are the principal owners of PowerWallet, and I know them both very well. In fact, when PowerWallet was still on the drawing board, our team provided input to theirs. This website was their first partner.

That’s the kind of relationship I prefer. Does it mean I have an inside track on every detail of their business? No. I can only guarantee the results of businesses I directly control, and I don’t control PowerWallet. But when it comes to recommending someone else’s business, I vastly prefer those whose principals I know personally.

That’s why we partnered with PowerWallet.

How safe are sites like Mint and PowerWallet?

As I explained earlier, sites like Mint and PowerWallet are able to track your expenses because you’re allowing them access to information from your bank, credit card, savings, investment and other accounts. That means giving them the user names and passwords to all of those accounts.

Scary stuff.

It will come as no surprise that these companies say they’re safe. You can read Mint’s security page here, and PowerWallet’s here. A few bullet points from PowerWallet’s security page:

  • PowerWallet is a read-only product, which means we don’t store your data. No one can transfer or remove funds.
  • Our site goes through rigorous testing every day to provide the highest level of security and ensure the maximum level of protection against identity theft, viruses, spyware and other online threats.
  • PowerWallet will not sell or distribute your personal and confidential information at any time, for any reason. We safeguard your online privacy and are 100 percent committed to protecting your personal information.

Of course, as Home Depot and Target will attest, no store or site is totally safe. But it’s important to remember that even if a crook broke into Mint or PowerWallet, they can’t steal your money because you can’t make cash withdrawals or transfers on these sites.

Then there’s the final layer of protection. At the end of the day, you’re typically not liable for fraudulent transactions, whether they arise from a hack to your bank’s website, malware planted on your computer or a stolen credit card. Big hassle? You bet. But it shouldn’t be a big loss.

What’s the alternative?

Got more money questions? Browse lots more Ask Stacy answers here.

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