As you know, we live in a new world of technology today.
Visiting your local bank, using a checkbook to write down spending, receiving your bills in the mail and writing out your budget on paper, still have merit, but can be automated with software and online services to save you time. Time and accuracy are the most notable advantages of technology.
As a volunteer financial coach, I often hear people complain about the time required to budget, track spending and save. In my opinion, these are responsibilities that shouldn’t ever be overlooked if you want to achieve financial goals, but I must admit, they do require an investment of time (although, small) if you want to reap the benefits.
I love using technology to help me automate the management my finances so I thought I would share a few tools I like best.
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Digit.co is a new financial service that was just launched that helps to automate saving money, without any interaction needed from the account holder.
You just sign up for a free account, link it to your checking account and mobile phone (where most of the banking occurs), and then Digit will analyze your checking account balance and spending trends. When Digit determines an amount it thinks it can safely save without causing problems for you, it will automatically debit your checking account and pull it into your Digit savings.
The amounts that Digit saves are typically small, anywhere from a few dollars up to 50 dollars or more. Over time, however, they add up to larger amounts. Peter has been using them to automatically save and invest in his “Digit & WiseBanyan experiment“, and has saved around $1400 in a few months! Read a full review of Digit here.
You Need a Budget (YNAB)
The key features I look for in money management software are budgeting and mobile spending.
I meet with a lot of people and first teach them budgeting skills the old fashion way by writing everything down. They have to write a budget on paper, use a spending diary (their paper envelope budgeting system) and keep track of spending in their checkbook. As stated before, it’s a time investment, but a little bit of work each day goes a long way in helping you manage your spending well.
You Need A Budget (YNAB) provides the way to automate all of this and adds the convenience of tracking spending on the go via the mobile app. Every transaction you enter keeps your checking register updated as well as deducts the amount from the assigned budget category. It also uses your location services on your phone to remember where you spend money so you don’t have to re-enter this information next time!
What is really great about YNAB, is the ease of use. They make all this simple whereas some software has confusing user interfaces or try to assign budget categories to transactions for you. Most people get YNAB and have fun using it.
Mobile Check Deposit
Capital One 360, Ally, Bank of America and Chase all provide the capability of depositing checks into your checking and/or savings accounts via your mobile phone. I bank with Chase for my business banking needs and have recently found this feature to be quite handy.
I’m not sure how they make all this work, but it is truly amazing! I received a check in the mail the other day, logged into my Chase account via my iPhone, took a picture of the check and deposited it.
This feature alone saved me a trip to the bank, which we can all appreciate today with the high gas prices!
Automated Investing Services
Another relatively recent invention is the advent of the automated investment advisor. These services will automatically invest your money for you in a low cost index fund, for a small fee.
These services typically have a long term outlook, and you can tailor them to invest for you based on your current age, the level of risk you're comfortable with, and more.
All of them allow you to setup automated deposits, making it even easier to invest. Two of my favorite robo-advisors (as many call them) are:
Automate Your Finances
I know there are many more financial tools out there, but I see these as a few of the core tools I’ll use for quite some time. At least until the technology evolves again!
These tools save me a lot of time and help me keep my money management to just a few healthy minutes per day.
How do you automate the management of your finances?