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November 2013

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New Online Money Management Tools to Try
Four online tools for assessing your finances, paying down debt and managing investments

New personal finance tools are constantly being developed and released, and it can be difficult to tell them apart and determine which are right for you. Sorting through them all is a chore that many people don’t want to pile onto their current financial tasks of budgeting, paying down debt, growing savings and handling day-to-day money matters. This list will help you learn about a few of the new money management tools available online so you can more easily find the best ones for you.
The fun and free FlexScore money management tool was Forbes contributor Richard Eisenberg’s favorite out of those newly unveiled at the Finovate Fall 2013 conference. It works by calculating a score based on how well you manage your personal finances, which is a process that only takes about 15 minutes. The tool really shines in the ways that it shows you how to improve your score. The highest score to set as your goal is 1,000.
Certain activities like lowering your mortgage rate by refinancing can improve your score by around 24 points. Your score will go down if you make moves that aren’t as financially safe, such as putting all of your investments into one stock.
“You’ll get dinged for a lack of diversification,” describes Jeff Burrow, the president and co-founder of FlexScore.
Because this is a free tool, it’s important to understand exactly how it makes a profit to determine if it matches with your usage goals. FlexScore makes money if you end up using the financial institutions listed on its site. The good news is that there is no obligation to use those institutions. FlexScore also keeps costs down by not offering a human to talk to about reaching your financial goals.
This may not be the right tool for you if you’re partnered and have shared finances because it doesn’t offer a score for an entire household. If you have personal financial goals you would like to work toward, it’s a great idea to use a personal FlexScore for each financially active member of your household.
Guide Financial
The issue with many online personal finance tools are that they do a great job keeping track of how you use your money, but fall short when it comes to guiding you to use it better. Guide Financial aims to do things differently, offering advice in a step-by-step manner. The one area where it shies away from offering advice is investing.
This tool can help you learn exactly how to refinance and save, locate savings accounts with the highest yield and how to pick the best retirement plan. Scott Burns, one of Guide Financial’s co-founders, described that the future of the tool will comprise 25 categories. These future categories will include saving for college or a vehicle.
“One of Guide Financial’s coolest features, I think, is its search functionality,” states Eisenberg. “It lets you quickly see whether you’ve shelled out more lately in one category — say, dining out — than in previous months, so you can then curb this type of spending accordingly.”
Ready for Zero
Ready for Zero is another online tool that focuses on clear-cut guidance for achieving a financial goal. It’s specifically designed to help users make a plan for paying down debt and keeps them on track by sending encouraging messages and monitoring financial activity.
This online tool is great for people who tend to avoid thinking about debt, making it harder to tackle. Encouragement keeps users focused on the end goal: zero debt.
“When you manage to pay off a debt, it even posts a golden trophy icon beside your filled-in progress bar,” states Stacy Rapacon from Kiplinger’s Personal Finance.
Financial Guard
This is one option that is not free, but you do get good services for your money. For less than $150 a year, it rates your ETFs and funds with a letter scale from A to F. It calculates the letter grade based on fees and performance and uses that to inform you which to keep and which other investments you could purchase to make your portfolio worthy of an A.
Eisenberg cautions that “the algorithm-based investment advisers don’t know anything about your financial life beyond what you enter into the brief questionnaire. And the services generally don’t offer access to a living, breathing financial planner.” This means that tools like this are best saved for people who would like to use them in conjunction with a financial planner, specifically those who have so many investments that they can’t form an overall picture of their progress.
“So I’d say if sites like these appeal to you, give one a try,” states Eisenberg. “But get yourself a human financial planner too, so someone is working with you on the big picture and money issues beyond investing.”


Published by Avidia Bank
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Disclaimer - All content contained in this newsletter is for informational purposes only and should not be relied upon to make any financial, accounting, tax, legal or other related decisions Each person must consider his or her objectives, risk tolerances and level of comfort when making financial decisions and should consult a competent professional advisor prior to making any such decisions. Any opinions expressed through the content in this newsletter are the opinions of the particular author only.

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