Archive for the ‘Finance Tools’ Category

Free Online Money Tools

Aside from the free personal finance managers mentioned here, there are also some other online finance tools that I use that can be of value to you.

Credit Karma

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A FICO score is what most people refer to as their credit. It’s a number that determines how much interest you will be paying on that loan from the bank or that loan from the car salesman or the interest rate of your credit card and your credit limit. In other words, this number is critical to your credit rating.

Each of the credit reporting agencies  (Equifax, Experian and TransUnion) has a different score, but you have to pay each time you choose to see it. With Credit Karma, you get something close to this score for free. The score you are provided is not your true score but an approximation.

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One feature that it has is a Credit Report Card which grades you based on criteria such as Total Debt, Debt to Income Ratio, Debt Length etc. There is also another feature which allows you to see what effect actions such as opening another credit card or increasing your limit on a card will have on your score. It’s a great tool to check out if you are interested in taking care of your credit.

Networth IQ

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The most important factor in determining wealth isn’t your income, but how much of that you keep and accumulate. So it is pretty important that in earning more money, you ensure that your overall networth is growing.

This is an online tool that helps keep track of your networth (as the name suggests). You manually put in numbers for amounts for savings, debt, assets, stocks etc and then this tool keeps track of how your wealth is growing and changing from month to month. Here’s my current badge below.

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Tip’d

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Think of tip’d as a digg (link) for finance. For those who haven’t used digg, it’s a site that aggregates links and they are ranked by popularity. In the same way at tip’d, articles from various sources are linked to this site by either the authors or others who have read them and the links are ranked by popularity (the number of tips received). This is useful in that it links you to various finance categories (Business, Currencies, Funds and ETFs, Personal Finance etc) and you can catch up with the latest news within these categories. You can also discover other bloggers and information sources that you can keep track of with an online reader.

Let me know of other tools out there as I am sure there are many that I haven’t tried myself.

Where is my money going?

Those who cannot remember the past are condemned to repeat it – George Santayana

When I began this blog, one of the things I wanted to discuss was managing money i.e. budgets, investments, frugality etc. This will be one of my first articles towards that end with more to come in the future.

When I first got out of college, I took a year off to try to find work before I returned to graduate school. At this point, I was in credit card debt. The first credit card I ever got extended me $5,000! First of all, I had no business being handed a credit card equal to that amount as I was earning about $6,000 annually (from tutoring and working in the dorms). However, I was the one who mismanaged credit and handled the card as free money. When I was broke, I would pay for things using the card and buy stuff that I could honestly have done without. I got drunk with purchasing power and over time, I got other cards and bought more stuff. Therefore it was inevitable that when I got out of college with no income, I would end up being very broke. I knew I had to fix my leaking boat before it sank and I drowned with it. This was the point where I began to figure out what personal finance was and how to be the navigator of my financial journey.

The first thing I had to learn was: Where was my money going? This is usually the first step that most personal finance managers will tell you to do. Even though I had an idea that I was spending a lot on clothes and food and electronics, I needed to know what percentage was being spent where. This would help me figure out where money was being spent (or wasted) and the first things I would probably need to trim when I wanted to manage my finances properly.

I started with Microsoft Money that a relative had purchased, but it wasn’t free and I believe at this time Microsoft has actually stopped selling this program. In more recent time, numerous free online tools can be used for this same purpose. There are three that I have experience with Mint, MoneyStrands and Thrive

My favorite so far has been Mint for functionality and interface, but I’ll leave you to check out some reviews to decide for yourself (Mint Review, MoneyStrands Review, Thrive Review)

So what do these sites do? First, they consolidate most your financial information into one site i.e. checking accounts, savings accounts, CDs, credit card accounts and investments accounts as well. Secondly, they each have a feature that is able to show you graphically where all your money is going i.e. groceries, rent, food etc. You can basically pull up a pie chart in Mint that will show you proportions of where your money went for a certain month. This works very well if like me you have multiple accounts because it allows you to keep track of  how much was spent on gas overall whether it’s on a credit card or a debit card. Here’s a screen shot of my spending in August 2008 just to give you an idea of how this feature works (As you can tell I wasn’t very smart with eating out)

One of the worries that people have is about the security of having to enter bank information into a third-party site. I will tell you that I have been using Mint since May 2008 and I haven’t had any issues. If however you’re still worried, then there are other options such as Microsoft Excel and paper and calculator. In the end, your peace of mind is the most important factor to consider.
Overall, this is where you can figure out how much you’re spending on fast food per month, or how much gas you spent last month in comparison to the two previous months or how much you spent at Christmas last year and so on. This first step will help in setting up a clearer view of your financial picture as the next step is preparation of a budget.