As consumers watch what they spend more closely in these credit-squeezed times, services such as Mint.com’s personal finance site could come into their own.
As a Mint user, I can see bar graphs of my monthly spending in particular categories. I can also compare my spending to that of other users in San Francisco, in California or the US as a whole.
So my family seems to spend far more in Costco than the average San Franciscan but we are way behind in spending on entertainment.
Mint, launched just over a year ago, now has 600,000 members and the data it collects anonymously, as its software automatically categorises users’ bank and credit card transactions, give it some fascinating aggregated insights.
Aaron Patzer, founder and chief executive, told me he had collated statistics on credit card balances – one institution topping the table with its members having an average balance of $167,000.
The company concerned was IndyMac, and the reason the figure was so high was that its customers had a line of credit tied to their home equity. Three days after Mint carried out the survey, IndyMac became the second largest bank failure in US history.
With its nightly collation of such statistics, Mint has its finger on the pulse of how consumers are cutting back in the recession, with figures more up to date and with greater granularity than anything the federal government can produce.
“We know which merchants are being hit hardest and we have seen how people are now saving more and spending less, with a big fall in spending in September,” said Mr Patzer.
There are one or two caveats – Mint only tracks card spending not cash and its audience is skewed towards a younger demographic, with 40 per cent of users being women – compared to the typical 47-year-old 85 per cent male demographic of a Quicken or Microsoft Money user.
Nevertheless, Mint should find plenty of buyers for such insights, although currently it is not trying to monetise the data. Instead, it is relying on the commissions it gets for referring users to banks, credit card institutions and investment products where it has calculated they can save money.
Mint announced a text-messaging service today that delivers instant balances to users and it plans to launch an iPhone application in January with greater functionality. Web users in Canada and the UK can expect Mint’s tools to be available to keep a check on their finances later next year.
