Financial Planning Tools Pay Off
By JEAN CHATZKY
Last week, Finovate came to New York. Not familiar with it? That’s not surprising – many consumers aren’t.
Finovate is a conference, held every spring and fall (and once a year in London) that serves as a launching pad for innovations in banking technology.
Sounds like a snoozefest, but it’s actually not. It presents new and updated tools that can help you manage your money better.
You’ve heard of Mint.com? They’ve been there (several times). Prosper, the peer-to-peer lending site? Yup. Even I have spent some time up on that stage. I launched my Score Builder app, created in conjunction with SmartCredit.com, in San Francisco at Finovate last year.
Online planning advice
You know I’m all for financial advisers. Research has shown that people who use them save more and invest more for their futures. But I also acknowledge that having another person on your payroll isn’t appealing to everyone.
So if you don’t want an adviser, can’t afford an adviser, or you want to cross-check your adviser’s advice, some of the new online tools featured at Finovate may fill the gap.
First, there’s Personal Capital, which keeps track of your spending, saving and investing. The developers say they’re bringing together “high tech and high touch.” Like other online budgeting tools, this one pulls all of your accounts under one roof. But it also gives you free investment advice and will manage your portfolio for a fee of less than 1%.
Next up: Betterment, which is a sort of hybrid planning tool and online investment account. If you’re saving for college, you can sign up with Betterment – a New York-based tech startup – tell the site how much you want to save and when you need the money and they’ll recommend an asset allocation.
You can accept their recommendation or adjust it and start transferring money from your checking account to Betterment Securities, which is a broker-dealer (and member of FINRA) that buys exchange-traded funds based on your savings goal and time frame. The service costs between 0.3% and 0.9% each year, depending on how much you invest (there is no minimum balance).
Finally, LearnVest has married advice with budgeting tools – its My Money Center aggregates your accounts and allows you to set budgets and its boot camps are like free personal-finance courses in your email. Check out the Take Control Bootcamp (learnvest.com/takecontrol), which I helped develop. It’s free and can help you track your spending and budget and understand your credit score.
Rewards for everyday spending
Rewards were, without a doubt, the unofficial theme of the conference. It seemed like every other presenter was talking about yet another way for you to earn rewards or get cash back just by using your debit card.
They’re catching on to the fact that consumers are tired of wading through 10 daily deals in their email inbox every morning. You want to save money, yes, but you want to do it without the effort.
Offermatic is capitalizing on that feeling: You hand over your credit card and debit card information (securely) and Offermatic then offers you rebates and other rewards based on your actual spending history.
Let’s say you racked up a slew of charges for gas on a family vacation last week. You might get an offer for $5 or $10 off the next time you fill up at a particular gas station.
Offermatic CEO Faisal Qureshi and Arnaud Collin, vice president of marketing and product management, say that one thing that sets Offermatic apart is that it ties rewards to spending. Someone who spends $100 at a store will get a bigger reward than someone who spends $20. (I wondered if these rewards would impact the miles or points you earn from your credit-card company – Offermatic assured me that they will not.)
Swipely and FreeMonee were other presenters in this vein worth checking out.
Financial literacy programs
All the investment, planning and rewards technology in the world won’t help if people don’t know the basics: What credit-card debt is (and why you should pay it down); how your credit score impacts your finances; why you need to spend less than you make. At Finovate, we saw new ways to teach your kids about money.
FamZoo is a virtual bank that helps kids track their spending, saving and giving and shows them how to budget. DoughMain is a family calendar and chore tracker that can integrate real bank accounts and prepaid cards when you’re ready.
For the adults, there’s Wall Street Survivor, a stock-market simulator coupled with investment advice, so you can practice investing before you leap.
A few other things aren’t yet on the market but are worth looking out for. Transparency Labs is a much-need service that employs real experts to analyze the fine print in contracts and agreements.
That means you’ll be able to search their database for the key points you need to know about your cell-phone contract or credit-card terms and conditions. Benjamin Texter, a vice president at the company, tells me they hope to launch in early 2012.
SaveUp is another rewards tool, but it rewards you for saving and paying down debt, not spending. They’ll be going into public beta in the fall.
And finally, I chatted with Vincent Turner, the CEO of a new company called Planwise. Their tool is designed to help you understand how today’s decisions – changing jobs, buying a house – will affect tomorrow’s bottom line.
This article originally published September 28th, 2011 on New York Daily News