The Best Websites & Apps To Manage Your Money

Pay off debt and accumulate assets ASAP should be everyone’s goal, and one of the things that makes the whole process bearable (and dare I say fun) is having the right software to measure our progress.

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Ready For Zero 

By the time word of Ready For Zero finally got to me, I was nearly debt-free. I remember hearing about the program before, but I think I misunderstood what it was or how it worked. Much to my surprise, when I checked it out recently I noticed it was FREE and had a really nice interface for tracking and managing your banking. The site boasts they’ve helped users pay down $150 million dollars in debt. They provide you with a personal plan that helps you get your finances in order and allows you to track everyone on your computer and through a mobile app.

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Money 4

I’ve been singing the praises of Money 4 for years, and it’s still the app I use for myself. Not only does it offer money tracking and budgeting tools, you can put in the holdings of your stock portfolio and it will update those values in real time. I LOVE seeing my entire financial picture in one place! You might be staring at the pricetag and thinking nearly $40 is too expensive for an app (especially when all the other options on this post are completely free!), but when it comes to managing your money, the one-time investment in solid software is worth it.  But if you’re still hesitant, there is the option to try before you buy: you can download a free trial. The downside? Unlike Ready For Zero which pulls from your bank accounts like Mint, Money requires you to enter spending manually. You can set up regular bills and paycheques in the scheduler, but otherwise you’re on the hook for remembering to enter in how much you spent at the grocery store.

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I regularly receive emails asking for investing advice, which tells me that many people don’t know what the good investing resources are. I’m still learning the ropes of the stock market, so I don’t offer too much investing advice on MAG. LearnVest fills the gap. This site does offer debt repayment help and budgeting advice, but it takes it one step further than Ready For Zero and Money 4 by offering investing plans. LearnVest pairs you with a Certified Financial Planner who walks you through setting up a portfolio and helps you monitor your investments. I haven’t tried this site yet myself but I really dig the idea of an online helping hand when it comes to investing.

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NetWorth IQ

One of the main attractions of personal finance blogs is seeing how someone else spends and saves their money. If you really want to scratch your voyeuristic itch, NetWorth IQ is the perfect site to creep on other people’s financial progress. Most of the profiles are anonymous (with the exception of some that link back to various personal blogs) and list all assets and debts of that individual overtime. Some people are uber-rich, some people may never recover from financial ruin, some people are lying. Regardless, one of the funnest things you can do is use the comparison tools to see where you stand relative to others in your age group, income range, or profession. I don’t use NetWorth IQ anymore, but sometimes I still like to peek in to see what other people have as far as personal wealth goes.

Any more best-of apps I should add to the list? Let me know in the comments below!

Spending proportionately to your income or your net worth

In my recent post summarizing my discretionary spending of 2013, I shared the numbers as a percentage of my gross income for that year. Mostly I did it so my spending would look less horrific, but I also did it because it’s a good way to look at your finances.

Things don’t cost what they are priced. How much something costs depends on your financial situation.

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how I react to more or less everything now that I am on the strictest budget of all time

If you really want to put things in the context of whether or not you can “afford” them, consider whatever object your heart desires in context of your net worth or income. Regardless of the price tag of an item, it makes a big difference if spending money on it is an almost negligible dent to your bank account or a huge cut out of your life savings.

Think about it:

When I spend $200 on concert tickets as a salaried employee earning $75,000, this splurge represents only 0.27% of my income.

However, if I drop $200 on the same tickets as a starving student earning only $15,000, they now eat up 1.3% of my income.

So maybe in your head you’re thinking, “but that’s still a small amount, it doesn’t matter!” ok, but if I go to 10 concerts per year (and I probably will), then it’s only 2.7% of happily employed me’s income but a terrifying 13% of studious me’s income. And that’s about where I can’t afford it anymore. Most of us can fritter away 1 or 2 or even 5% of our gross income, but once we’re digging into double digits, it’s taking money away from our needs.

Another way to contextualize your spending is to think of it in terms of your net worth. If you’ve built up sizeable financial assets, a little splurge here or there isn’t going to rock the boat. However, if you don’t have anything substantial, or worse yet have a negative net worth, spending anything can make a big difference.

For example, if someone that has $50,000 in savings buys a $50 shirt, they’re only spending 0.1% of their net worth.

If someone else that’s only accumulated $500 buys a $50 shirt, they’re blowing 10% of their net worth. Scary, right?

The point of this is what you can really afford is relative. Blowing 10% of your net worth on a tshirt is stupid, you can’t afford that! But going to 10 concerts that cost less than 3% of your income is ok, even if they’re $200 apiece.

The more you earn and the more you save, the more you can safely spend without putting your financial security at risk.

How To Cut Down The Rental Costs

The biggest monthly bill for most people to pay is rental, and you cannot influence the price you pay after signing the lease. Thus, you better plan well and consider all the details and aspects before you rent a property, as if you are paying too much, it will influence your budget and your life. The short-term impact is pretty obvious here – you will not have much money to spend time with your friends on Friday night, or to go to the seashore in summer. Long-term impact is much worse though – if you are paying a lot for rent, you will not have some spare money for emergency situation, and when it occurs, you will get a credit card debt which is another payment obligation. In case you already have the debt, your rental payments will prevent you from paying it off, and this will bring you higher interest. Hopefully, there are several strategies for you to avoid such financial troubles.

Reevaluate the Neighborhood

If you are renting an apartment or a house in some popular and prestigious neighborhood, the part of your renting price is simply a payment for the privilege. The parking lot is also expensive, and you are often required to pay additional fee. If you move away from the hip areas will save you much money without saving on the comfort and quality of the dwelling. Moreover, if you are away from the center, you will be farther from supermarkets and entertainments, you will have less temptations for wasting your money.

Have Realistic Requirements

Surely, renting an apartment with granite kitchen countertops and molding ceiling is great, but first look at your budget and be realistic. Finding an apartment with minimal maintaining problems and in safe neighborhood is a bigger priority for you.

Think About Having a Roomy

If you are ready to sacrifice the privacy and get a roommate, you will be able to save about 30-40% of the living expenses. In case you are ok about sharing groceries with other person, you will even have a chance to save on food. This way, with a roommate you will even have an opportunity to rent apartment inn better neighborhood.

Look For Exceptions

Looking for an apartment to rent is a time-consuming process, and you have to put in a lot of effort if you want to rent the apartment that would be cheaper than the market rate. For being ready to take decisive actions about the apartment renting you have to know what you exactly are looking for. Make the least of features you need in the apartment and make sure you always have all the information needed for handling in the application when you look at the apartment.

Stay attentive and patient in your search and don’t fall for anything that would be below your needs and above your budget. And remember that there is always a chance to find an apartment at the cost that would be lower that the going rate at the neighborhood.

Go and visit http://localmartca.com/ to find housing options for you.

My Car Expenses are Driving Me Insane

I hate driving. Hate it. I am paranoid about dying in a car accident so I can’t drive in the snow or rain or at night without freaking out. That said, I do love my car. Because when it’s daytime and I don’t have to drive in adverse weather conditions, it’s really, really convenient to have a vehicle. Lucy, my Ford Focus, makes life easier when I want to go somewhere far. But at what cost?

A really freaking large cost. I recently added up what this convenience is costing me:

Car payment: No money down, super-sized warranty (I have terrible luck with cars, we’ve already had to use this once), 5 years. $339.32/month

Gas: We used to have to fill up once a week to get to both of our jobs. However, I am now working from home and my husband only works about 9 miles away. I’m guessing we fill up about every other week. $70/month

Car insurance: I pay this automatically and 6 months at a time to keep the cost as low as possible. $439.77 every 6 months or $73.30/month

AAA Plus Membership: I don’t care what anyone says, this is a NECESSITY. In 2012, we maxed our uses out. Didn’t know there was a limit? Well, there is. Only we could ever hit it.  $108 a year or $9/month

Parking: We park with a permit from the city. $60 a year or $5/month

Oil changes: Assuming 1 every 3 months. $80 a year or $6.67/month

All of this, not including maintenance or tire replacement, comes to a whopping $503.29/month! Once again, this is assuming we NEVER have to change tires or have maintenance done. Ever. Which is false.

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Now obviously, a lot of people drive quite a bit cheaper than this because they don’t have car payments. But we aren’t even at the average! The average used car payment in 2012 was $351/month. The average new car payment in 2012 was $452/month. People are spending a lot to drive.

What’s the alternative?

If we both got bus passes and ditched the car, we would only be paying $200/month for transportation plus whatever a rental car costs when we leave town. However, a co-worker of my husband lives very near us and takes the bus an hour and a half each way! Driving takes only 20 minutes. If my other half works 20 days a month and saves around an hour and ten minutes each way, he is saving 46.67 hours of commute time. That’s like 2 days folks!

So for now, we pay for time. We pay because we are upside down on our vehicle. We pay because we don’t know if we will be in a public transportation friendly area a year from now. And let’s face it, we pay because it makes our lives so much easier.

For now, we will be keeping our beloved Lucy. Maybe someday we will save money by going carless, but not today. Hey, at least we only have one, right?

Do you own a car? How much do you pay per month for transportation? Anyone else name their cars like a teenage girl?

5 Little Ways I’m Stretching My Budget

It’s no secret living on less takes some adjustment. After enjoying a good full-time income, my new bare-bones budgets means I have to get creative if I want to keep some fun and luxury in my life. Below are some of my secrets of how I’m making my money go just a little bit further!

Step 1…

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Just kidding, here’s the real list ;)

1. A cash-back credit card. Gone are the days of my baller Amex, now I can be found swiping my MBNA cash-back card. I get 1% cash-back on all purchases, and 2% cash-back from grocery stores. Unfortunately, this is only up to $1,250 per month, but now that I’m on a reduced budget I’m optimistic I’ll get below that sooner or later. In any case, it’s nice to get some of my spending back. Dollars are tracked as points and once you accumulate 5,000 points, they cut you a cheque for $50. I deposit my cheques in savings or work them into my budget.

2. Discount gift cards. This has been one of my shopping secrets for years, but since I’m all about sharing the wealth, I’ll pass it on to you guys ;) One of the best ways to be able to afford things from my favorite stores is to buy gift cards at a discount. Sometimes people end up with gift cards for a store they don’t frequent or don’t like, so they’re willing to sell it for cash instead — and usually less than the gift card’s value. I always look for 10-20% discounted value. For example, if someone has a $100 gift card for Banana Republic, I’ll buy it from them for $85. Worried about getting scammed? I always meet the seller at the store, where I have the cashier verify the balance before I hand the money over. This practice is particularly lucrative post-Christmas, when tons of people will have received unwanted gift cards as stocking stuffers and will be looking to trade them for cold hard cash to pay off their Christmas shopping credit card bills!

3. Swagbucks. Yes, I’m still singing the praises of Swagbucks, maybe because the more you use them, the more you seem to get. I’ve been racking up Swagbucks and using them to buy Amazon gift cards. I then use the Amazon gift cards to buy much needed household items for my home, and the spending generates 1-2 Swagbucks per dollar spent, which puts me that much closer to another gift card. This is the easiest boost to my budget ever.

4. High-interest savings accounts. As I earn money from freelancing, I immediately transfer it to a high-interest savings account with ING (if you want a free $25, sign up using my orange key: 32251507S1). From the savings account I then withdraw however much I need that week, leaving the rest of the balance in the savings account. This is a better option than keeping all my spending cash in my chequing account, which only pays 0.25% interest vs. 1.35% interest in the savings account (I’m currently getting 2.5% interest as part of a promotion!). It’s only a few dollars per month, but I like to think of it in the context of a free small coffee or two. I keep my Emergency Fund and other savings in high-interest savings accounts too. Because I don’t make withdrawals from these, the interest accumulates and helps my funds grow for future use.

5. Dividend paying stocks. Now that I’m earning less money, I’m contributing less to my brokerage account, but that doesn’t mean it’s not still growing. I’ve been a fan of dividend-paying stocks since I started my portfolio, and I still think they’re an important part of long-term investing. I always reinvest my dividends, often in more dividend-paying stocks, which means I’m continuously increasing my dividend income and boosting my overall portfolio. Like the high-interest savings account, the benefit here is pretty minimal, but in times of limited income I’m in total “every penny counts” mentality so I’ll take what I can get.