If you’re like most of us you have a smart phone. If so, you’ve probably already learned how to manage a lot of your life. You may be using apps to wake you up in the morning, to remind you of meetings and other important dates, to keep track of your music and to provide you with the news of the day. But did you know that you could use that phone to automate much of your personal finances? There are a number of great apps that can help you better manage your money whether you’re saving, investing or just want to keep an eye on your cash flow. But of all these apps there are five you could harness to put your financial life basically on autopilot.
One of our personal favorites for budgeting is Mint.com. The app Mint Bills distills down the best of what this program offers and presents it in clear, easy to understand snapshots of your overall budget. It combines this with the ability to pay your bills. All that’s required is that you sync your bill-paying account with those bills you pay each month such as your credit card bill, cable, cell phone, etc. Mint Bills will then determine when your bills are due and send you an alert. You could open the app and pay the bill right there and then. Mint Bills also allows you to track your investment accounts and your savings. Another feature of this app, which you should definitely take advantage of is its alert system. If any suspicious transactions occur on your account or your account balances run low, it will immediately tip you off. You can download Mint Bills free and any payments you make via your bank account are also free. But one thing you don’t want to do is use this app to pay bills with a credit card. These transactions cost a $4.99 processing fee, which switches to a flat 4% if the payments are over $125. Do the math. That’s $5 per transaction. Ouch.
You’ve probably heard that old adage that giant oak trees from little acorns grow. We’re assuming that this probably has something to do with the name of this app. Whether that’s true or not, this app is a great way to start investing if you don’t have much money. You link it to your debit card. When you use the card to buy something and it doesn’t come out to be a round number, Acorns will round up the transaction to the nearest dollar and then save that change. When your savings balance hits $5, Acorns deposits the money in whatever investment account you chose. You will need to provide the app with some personal information regarding your investment goals, your income and your net worth. It will then recommend one of five investment portfolios. These portfolios range from aggressive to conservative and consist of ETF’s that are chosen and rebalanced by the Acorns people. The app is free to download but costs $1 a month until there’s $5000 in your account. After that, Acorn’s fee is 0.25% of your total assets per month. If you decide to withdraw your funds there are no fees.
Would you like to be able to save money without even knowing you’re doing it? I mean, talk about painless. After you sign up for Digit you will need to link it to your checking account. The app has a very smart algorithm that will monitor your spending. Then every few days it will determine what you can afford to save. It will then move the money into a Digit savings account, which is insured by the FDIC up to a maximum of $250,000. The beauty of this app is that it only takes a small bit of cash at a time so that you hardly notice the money has been withdrawn. It also eliminates the fear of overdrawing your account because of this was to happen, Digit will pay any overdraft fees. Most of the savings transfers that Digit makes range between $5 and $30. However, there is one downside, which is that you don’t earn any interest on your money. This means that you don’t want to use this account for long-term savings. You would be better off leaving that money in high interest-bearing accounts. But Digit represents a terrific way to save up for something mindlessly such as gifts for the holidays or a weekend getaway.
There are a number of ways to get your credit score. You could get it on the site www.myfico.com if you’re willing to either pay for it or sign-up for a free trial of one of FICO’s services. You can also get your credit score free from the three credit reporting bureaus – Experian, Equifax and TransUnion. Some of the credit card companies are now giving credit scores free. Even Mint now provides them. But we really like Credit Karma because it gives you that critical credit score not from just one of the three major credit-reporting bureaus but from two of them – TransUnion and Equifax. It will also provide you with a complete summary of your credit history and let you see almost immediately what would happen if you were to make a new credit inquiry or get an increase in one of your credit limits and how this will affect your credit score. Credit Karma can also be very useful for monitoring your credit to see if there are any suspicious activities. Just as important, it’s free.
Finally, the app Personal Capital offers all the same would impact your credit score. budget-tracking abilities of programs such as Mint but is great if you are an investor and would like to track all your investments in one place. One of Personal Capital’s most important features is that it will analyze your mutual fund and retirement account fees and then alert you if they’re are higher than average. You can also see snapshots of how your investments are doing in real time with a feature called Investment Checkup. To take advantage of this you will need to sync your accounts with the app or to its website. If you have more than $100,000 in assets Personal Capital offers a financial advisory service that provides low-cost wealth management services. Personal Capital is free to download. The fees for financial advice start at 0.89% for assets under $1 million.
A word of warning
All of these apps with the exception of Credit Karma require that you link them to your financial accounts. As you might guess they each have an impressive list of security and privacy protections to ensure that your information stays secure. However, beyond this you should take whatever steps you can to protect your accounts on your end. This means setting up a PIN on your smart phone or what’s even better is fingerprint ID. Also, sign up for two-factor password protection if it’s offered and alerts that will tell you if your account changes.
The net/net is that if you’re willing to spend a few minutes downloading and setting up these apps you will have basically automated the most important parts of your personal finances – and saved yourself many hours of drudgery.