August 31, 2010 by Leah
I signed up for Thrive several months ago after reading about it in some reputable publication or another. It’s basically a free internet-based personal finance tool, like Mint, or any number of others, that help you track your debt, your spending, and achieve your financial goals. Thrive is supposed to be the best at giving advice (some of which you might not want to hear). Part of the thing with these sites is you give them access to your accounts (checking, savings, debt, investment) and they automatically track and analyze your spending habits. They make money by offering different ideas on how better to manage your finances. E.g. Thrive keeps telling us we could be making $114 more a year if we switched to an American Express high-yield savings account. This wouldn’t cost Aaron and me anything (except switching costs) and AmEx would probably give a small kickback of some kind to Thrive if we did so. We both think it’s a good idea to have a higher-interest savings account, even, but there are those switching costs. Time, security, learning a new system, having yet ANOTHER account to keep track of… No wonder we haven’t done it yet.
When I first signed up for Thrive, I was in Alaska, using a federal credit union, which didn’t have the technological capacity to be linked into Thrive, so all I could see was my credit card activity. That wasn’t so useful, because Thrive thought my income was zero (my income was directly deposited into my checking account) and every month sent me a cheerful email telling me I was overspending. When we got married and moved, I discovered that I could link our Chase checking and savings accounts into Thrive and start to use it the way it is meant to be used. Since I can see our joint accounts from my personal Chase login, I went ahead and linked them to Thrive. The problem? Aaron hates the idea of our personal financial login info going to a third-party site. I suppose I could start plastering his inbox with a barrage of information about how safe and awesome these sites are and how they will help us achieve our financial goals (that strategy worked for some close friends of ours who were in the same situation), but for now we have an uneasy peace – he doesn’t think about it, and I’m reasonably happy with the limited but useful information Thrive currently gives me.
The information I get from Thrive is an accurate picture of our income and spending. (Funnily enough, even though it can now see our income, it still tells me I’m overspending.) My student loan accounts are inferior Alaska instruments and therefore lack the technical capability to be linked to the Thrive system. Aaron’s student loan accounts are with Fannie Mae but I would have to ask him for the login info to those accounts, which I’m reluctant to do for aforementioned reasons. We have no mortgage. We have no investment accounts (well, Aaron has a retirement account into which he deposits enough to maximize his employer match – no sense passing up free money).
Thrive is handy as a big picture tool, but for detailed analysis I have to go through it transaction by transaction. The software is good, but it doesn’t always code things correctly (sometimes this is a mistake on the part of the vendor, as well). Our favorite restaurant, Open Sesame, showed up as a grocery expense last time we dined there. My last order from Lunapads was categorized as “Clothing,” which initially seemed wrong, but after some thought I left it as such. My pre-interview shopping spree purchases at Buffalo Exchange and Banana Republic were all categorized correctly, as were our two other restaurant forays this month. A Bed, Bath, and Beyond purchase of kitchen goodies was categorized as “Home Improvement;” I changed it to “Hobbies.” (Although I suppose a vegetable steamer, pastry cloth, in-cupboard turntable, and grill basket do improve the home environment.)
A slightly weird thing is that, in tracking spending, Thrive tracks “Purchases” and “Bills” separately. I was freaking out looking for Duke’s rather hefty medical bills under “Purchases,” and discovered them categorized under “Medical” in the “Bills” section. I re-coded them to count as veterinary purchases, since we will not regularly be spending close to $1000 a month at the vet. The reason Thrive differentiates (sometimes arbitrarily) between the two is to make sure you have enough money to cover “Bills” and to allow you to manage (well, cut back on) “Purchases.” Now that I’ve figured this out, I like it. Obviously, our loan payments, car payment, internet, and phone bills will have to be covered every month. Obviously, I will not need to buy a new suit again for the next two years unless I happen to lose the last 25 pounds
Thrive also sets budget goals by spending category (how, I know not) that I’m going to look into as I start to use it more. (This month I overspent the clothes/shoes category by a few hundred dollars. Oops.) If I find this feature useful, it should help me as I look at a couple of big-ticket items we would really like to buy (a push mower for the lawn and a steam cleaner for the carpet). Apparently, one can set one’s own budget goals, as well, based on one’s circumstances.
This morning, full of determination to use this nifty financial tool, I logged on to check how we’ve done with our August spending. I was greeted with the happy news that we spent less than we earned, saving a whopping $581. Callooh! Callay! Not ONLY does this represent a huge improvement over July, we spent 89.5% of our income, and my current goal is to live on 90% of our income and sock away the other 10%. (Granted, there is still most of a day left in August but if I buy anything today it will be a bottle of Two-Buck Chuck to celebrate.)