Handling your money properly can be difficult. Small expenses and little luxuries add up quickly until your entire paycheck has disappeared, leaving you with no money to reach financial goals like saving to buy a house or investing towards your retirement.
Thankfully, there is no end to the number of personal finance tools that are available to help you take control of your money. Whether you want help budgeting, need to automate your investing, or just want to know where all your money is going, these tools can help.
1. Budgeting Software – Mint or You Need a Budget
The first step that anyone should take when learning how to achieve financial goals is creating a budget. Tools like Mint and You Need a Budget (YNAB) make that easy.
Mint is an automated online money management tool. You provide Mint with the account information for your bank, credit cards, and investments. Every time you make a transaction with a linked account, Mint automatically tracks and categorizes it for you. You can go back and view historical spending data to see what you’re spending your money on. You can then use that to create a budget right inside the app.
Once you’ve built your budget, Mint will automatically track it and tell you how well you’re sticking to the budget.
You Need a Budget works similarly. It can sync with your bank and credit cards to track expenses.
Budgeting is essential to saving because it lets you keep a closer eye on where every dollar goes. YNAB claims that new budgeters save more than $6,000 in their first year of sticking to a budget.
2. Robo-advisors – Betterment or Wealthfront
Saving up enough money to be able to purchase investments is hard enough. Deciding what to actually invest in takes the difficulty to a completely new level. Robo-advisors can help you reach financial goals by taking the guesswork out of investing for you.
When you start working with a robo advisor like Betterment or Wealthfront, you’ll answer a series of questions that help it learn about your goals and risk tolerance. Then, the program will automatically invest your money in a diversified portfolio of stocks, bonds, and other investments. All you have to do is deposit or withdraw money as you want to.
The best part is, robo advisor fees are lower than most human financial advisors while providing better returns because they aren’t subject to the biases that humans are.
3. Automated Savings Apps – Acorns
If you have trouble sticking to a budget, the best way to save may be to force yourself to. Though the concept was popularized by Bank of America’s Keep the Change program, apps like Acorns will help you invest your money in the stock market, automatically.
When you open an account, you’ll link your credit or debit cards. From then on, every purchase you make will be rounded up to the next dollar. The extra amount will then be automatically invested in the market based on your risk preferences and goals.
So, if you buy a candy bar for $1.07, your card will be charged $2, and 93 cents will be deposited in your investment account, automatically.
Even small amounts, saved and invested regularly, can grow to a significant size over time. By automatically putting money aside as you make everyday purchases, apps like Acorns can help you reach financial goals.
4. Payment Apps – Paypal, Venmo, or SquareCash
It might sound odd at first, but apps that let you pay your friends back for dinner, movie tickets, and other outings can actually help you reach financial goals. That’s because these financial tools, used in concert with one of the online money management tools mentioned before, makes it easier to track your expenses.
Cash is great for paying friends and coworkers back for things, but cash also has a tendency to disappear. Even the most dedicated budgeter will sometimes forget to log cash expenses, leaving them scratching their heads as they try to figure out where the money went. With an app that transfers money directly from your checking account, your budgeting app will automatically see the transfer and track it.
Money transfer apps also let you add notes to each transaction, so even without budgeting software you can go back and look at previous payments and see what you’ve been paying people back for. If you notice you're sending people a lot of money for covering the bill when you go out to eat with coworkers, you might consider bringing lunch from home a few days a week.
5. Coupon Apps – Ibotta, SnipSnap, RetailMeNot
Everyone needs to go shopping sometimes. Whether you’re buying necessities like groceries or toiletries or something more fun like a new outfit or a game, you might be able to save some cash with a coupon.
Some coupon apps, like RetailMeNot and SnipSnap, track retailer coupons that are distributed by mail or in-store circulars. You can pull the coupon up on your smartphone, scan the barcode at the register, and reap the rewards right away.
Other apps such as Ibotta offer rebates on popular products including food, cleaning supplies, and toiletries. Once you make your purchase, you’ll take a picture of your receipt or scan the barcode on the box. The app will verify your purchase and send you some cash as a reward.
Even if you can only save $5 a week by couponing or earning rebates, that adds up to more than $250 a year, which can put you well on your way to reaching smaller financial goals.
6. Credit Card Reward Optimizers – Reward Summit or SmoreCard
Credit cards are among the most powerful, and the most dangerous financial tools available. Many credit cards offer rewards. Some offer miles towards future flights on specific airlines. Others offer hotel points. The most versatile reward option is cash back, which gives you a rebate on every purchase you make with a credit card.
You can earn as much as 2% cash back on all purchases with some cards. Other cards that offer bonuses for making purchases at certain stores offer 5% back or more!
The hard part is knowing where you should use which card. If you use the wrong card, you could wind up earning just 1% when you could have earned 6%. That 5% difference could be worth a lot if you’re making a purchase worth hundreds of dollars.
Personal finance tools like Reward Summit or SmoreCard tell you exactly which card to use where. Just load up the app, and they'll use your location to tell you which card offers the best rewards.
Given that in 2015, the average American family spent more than $55,000, you’re looking at hundreds or thousands of dollars in rewards that you could earn and use towards your goals.
The danger lies in the fact that using a credit card is the same as taking out a loan. If you don’t pay it back within the first month, you’ll accrue interest. Americans hold a total of more than $800 billion in credit card debt, and with the huge interest rates charged on credit debt, you’ll quickly pay more in interest than you’ll earn in rewards if you use a card to spend frivolously.
Managing your money can be difficult but with a little help, you can get closer to reaching your financial goals. Keep these personal finance tools in mind as you take control of your finances and start saving.
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