Wesabe Personal Finance Site Goes Broke; HelloWallet Fills Its Coffers

Wesabe

Wesabe, a personal finance competitor to Mint.com that emphasized its community features, ran out of money. CEO Mark Hedlund wrote in his farewell message that the site had been operating on starvation rations recently, which is "unacceptable" considering the security demands of hosting users' personal account information. Only the bulletin boards will remain operational after the end of the month. The site launched in 2005.

This could just be a case of a company failing to distinguish itself or find solid revenue sources in a crowded space increasingly dominated by one company. Mint has continued to add users and features—3.5 million registered and 1 million active users today, compared to 1 million registered users last March before its acquisition by Intuit. Their newest feature, Goals, debuted just last week. It moves Mint farther into the financial planning space by allowing people to identify and work toward spending goals like a vacation or a house, rather than just tracking their spending, saving, and investments.

HelloWallet

But new companies are still lining up for the job of helping Americans better manage their money. Most recently, a site called HelloWallet has drawn the backing of Steve and Jean Case of AOL and the endorsement of none other than Bill Clinton. Their uniqueness is not in their financial planning tools and widgets, promising to help you find a better interest rate on your savings account, etc., but in the books—HelloWallet markets itself as the only truly independent personal finance site, accepting no money or advertising from banks. (They plan to charge users a monthly fee to participate—we'll see how well that works out.) This is an area of vulnerability for Mint—their crucial bond of trust with users is inescapably compromised by the realization that their money comes from advertising deals with financial institutions.

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2 Comments

  • Jones Jonson

    Yes, It is almost very guidance financial software . I have got much help by this.

  • Bill Barnett

    I for one contest HelloWallet's claim that it is "the only truly independent personal finance site" as that has been our mantra since we founded BudgetSketch in March 2008. There are many other "independent personal finance" sites but I'll let them speak up for themselves. As far as HelloWallet's definition of "independent" is concerned, they'll want to check that with their attorneys and VC backers.

    What escapes most people who are struggling with their personal finances and every startup trying to "cash in" on them is that personal finance must start with a plan, AKA "a budget". Profit driven personal finance sites, and apparently we can now add HelloWallet to that list, attempt to start by tracking spending.

    At BudgetSketch we feel this "water over the dam" approach to personal finance is not only wrong but counterproductive. The solution must start looking forward, not back, with the creation of a budget. Budget in hand you can then track your performance against the plan by tracking expenses. Sites that generate what they call a "budget" from past spending data only ensure the persistance of bad habits.

    As this article states, and quite ironically, many personal finance sites fall prey to their own poor financial planning. Wesabe won't be the last. BudgetSketch operates by the principals under which it was founded and has been built patiently with an eye on the bottom line. We are beholding to no VC and no creditors, only ourselves and our users, and we're very proud of that fact.

    Let's be frank. What most personal finance sites are after is their user's data. BudgetSketch's primary aim is to help those currently struggling with their finances as we struggle with our own. We don't have years of financial pedigree beyond those spent in the School of Hard Knocks. We know what helped us and believe that we can fix this economy one budget at a time if we share our solution with others. Yes, we're a couple of "boy scouts" and proud of that too.

    Good bye Wesabe. Good luck HelloWallet. As for BudgetSketch, we'll rely on hard work and commonsense.