Here’s A Financial Advisor You Can Use Free–At Least For Now

Have you heard of the app Mint? It’s a tool that will help you track your spending, create a budget and even stick to it. For it to work, you must link it your checking account, savings account, credit cards and if appropriate any investment accounts. Thousands of people use Mint because it’s free and does an excellent job of what it does, which helps you with your budgeting. The downside of Mint is that it can’t help manage your finances, as would a financial advisor. But there are new tools called Pefin that can help you manage all of your finances much as would a financial advisor.

Free … for now

To use Pefin you’ll need to link all of your accounts, and some other data.  It will then show how all of your finances will look over time – depending on those things that happen in your life. The developers of the program call it an AI (artificial intelligence) financial advisor and because it’s now in the beta stage it’s free. It will then go to $6 a month for the next 12 months and then $12 a month thereafter. While this may not sound like a lot it’s important to consider that it’s an ongoing cost and will ultimately cost a total of $144 a year, which is a bit pricey. Of course, when you compare that to what a financial advisor would charge you and if you want the “big picture view” of your finances the $144 a year might be worth it.

The difference between Pefin and Mint

As noted above, the main focus of Mint is budgeting. In contrast, Pefin’s focus is on your financial timeline with a graph where you can include all of the milestones in your life and how much they will cost you over time. The graph will change whenever you add a new milestone and then show you how much you would save and spend year by year.

Planning on having a child?

Here’s an example of how Pefin works. You plan on having a child. So you enter this as a life event. Pefin will next ask you some questions about your plans with that child such as do you intend to send him or her to a private or public school? And how much do you think you will save for college? Your financial timeline will then change. You would probably see your retirement savings go down during certain years – like when it’s time to pay for college. In addition, Pefin will offer advice about planning for those goals. If you do decide you want to have a child it will show your child related expenses by age such as $3230 a year to raise a child age three to five years and then $4899 a year when the child is 11 to 18 years old. Given Pefin’s numbers, you might actually decide to not have a child.

Your spending habits

For Pefin to work it needs to pull all your income information so that when your income changes (hopefully, as you earn more) the graph will change along with it. Pefin will even learn your spending habits over time. So this would give you a clear picture of what your financial life will look like one year from now, five years from now, and, really, for the rest of your entire life. Because everything is connected any moves you make will affect your complete financial picture.

And there is more

Pefin comes with a host of other useful features. As an example of this it will estimate how much you will earn in Social Security based on your income. It will tell you how much you can expect to pay in taxes and what kind of taxes you’ll pay.

Not every feature now available

The good news is that for now Pefin is free because it’s in the beta stage. The downside of this is that not all of its features are currently available. However, the major ones are and since the tool is free it’s worth checking out. Pefin ultimately will even include a category for your investments so you’ll be able to analyze your portfolio and Pefin will offer suggestions for how you could improve it to get a better ROI.

There’s no replacing real

Of course, Pefin can’t replace one-on-advice from a real, honest-to-goodness financial planner. But it can give you a good and thorough idea of what your money will look like over time, which can be a great tool for long-term planning. Since it’s free for now you might just as well sign up for access and give it a try. You can always cancel out when the cost goes to $6 a month if you don’t feel that you’re getting fair value.

Speaking of children

If you’re like many people – and especially grandparents – that are taking care of someone else’s child, you may be able to claim him or her as a dependent and get a tax break. But the rules for this can get tricky. Fortunately, the IRS now has a tool that will tell you if you can claim someone as a dependent or not. As an example of this let’s say your child graduates from college but then moves back in with you while working full-time. Whether you can continue to claim him or her will depend on a number of different factors. You could spend the requisite amount of time reading all the convoluted rules for claiming a dependent or you could just use a new interactive IRS tool called Who Can I Claim as a Dependent.

If you use this tool it should require only about 15 minutes as it will ask you some questions about your arrangements and then give you a simple answer. The questions you will need to answer will include things such as your marital status, your relationship to the dependent and the amount of support you provide. You will also be required to enter your basic income information and your adjusted gross income. Be sure to have all your information ready because if you’re inactive for 15 minutes while desperately searching for a missing document the system will kick you out and you’ll have to start the “interview” all over again.