Ten Tools To Help You Get the Most Out of Your Savings

Ten Tools To Help You Get the Most Out of Your Savings

Below is my list of financial software tools that I find to be the most useful in helping grow and manage your savings. I've focused on tools for those in their twenties or thirties but these tools could benefit any age group.

Following up on my previous article on ten things recent college grads need to know about savings, this article is designed to help those starting out to optimize the funds that they have (while the article is focused on those in their twenties, everyone could benefit from the majority of these tools). The 21st century has brought with it the advent of user-friendly financial software that is sophisticated enough to be useful yet not overly complicated. The number of companies in this arena increases daily and there are surely more services available than the ones that I’ve listed below. That being said, those that I have chosen are some of the most affordable (ideally free) and efficient programs I've found.

  1. Mint.com: Perhaps the most well-known of the bunch and the first that I encountered, Mint is a fantastic tool for those looking to streamline their budgets. Mint allows you to link all your bank accounts, credit cards, loans, investments and more, so that you can easily keep track of your income and spending. Each expenditure is categorized so you can observe any trends.,The site also allows you to enter your budget for each category, so you get accurate picture of your spending habits. Mint will even analyze your accounts and find ways for you to save money, including alerting you when you have a payment due or have incurred a bank fee. For young savers fresh out of college, Mint is a tool that emphasizes accountability and fiscal responsibility.
  2. Ready for Zero: With Geezeo no longer taking on new customers and Wesabe down for the count, RFZ does exactly what its name implies – helps you pay down your debt. The software gives you informative infographics on all your outstanding debt that allows you to visualize progress. It also provides payment reminders as well as general suggestions on the best way to pay off  debt. If you’re willing to pay a little extra ($75 per year) for a Plus account, you’ll get automatic paycheck alignment, credit score improvement planning, and a lot of other goodies.
  3. Planwithvoyant: How can you prepare for an uncertain future? Voyant Inc. has you covered with software designed to help you forecast the impact of uncertain events. It’s a pretty user friendly interface even for those without finance backgrounds, and Planwithvoyant makes it easy for you to set up a financial plan.  The goal here is always to get the highest expected return with the lowest amount of variability and risk;to that end, Voyant lets you test a variety of different scenarios’ effects on your financial condition, such aspregnancy, retirement, etc. They’ll also give you suggestions on how to mitigate some of that risk through different investment strategies. Voyant also has a listing of financial advisors whom you can ask for advice and a (what type of forum?) forum to boot, making it a good jumping off point for young investors who don’t want to deal with more sophisticated investment technology.
  4. LearnVest: This may be a female-focused financial advisory site, but don’t let that fool you, it has value for both genders. LV is a little pricey, but you do get some bang for your buck. In addition to a real-life financial advisor you communicate with vie email and phone, they give you nifty infographics and cool diagrams so you can see where your money is  and where it’s going. LV also emphasizes   financial education, offering a wealth of articles on the subject andvirtual bootcamps for those who are into that kind of thing.
  5. Shoeboxed: So you’ve got that nice company card to expense all your work and travel expenses and rack up points. The only thing is, even in the digital age, keeping track of all those receipts can be a serious pain in the neck. That’s where Shoeboxed comes in: quite simply they take all your receipts and keep track of them for you in one place. Neat huh? There is a free version and multiple free trials, but for a little more money you can save yourself a lot of hassle. However, if you’re absolutely insistent on doing a lot of the tedious work yourself in which case it will always be free.
  6. Portfolio Monkey: This is not the sexiest program, but it is incredibly effective as an investment evaluator. Using historical data, Portfolio Monkey will analyze your current portfolio allocation and make suggestions. Specifically, it’ll offer different stocks that have a low correlation with your current portfolio (diversification lowers your risk) and high expected returns. The app then lets you run various simulations based on different hypothetical investing scenarios and allows you to compare your portfolios to others. While this site may require a little more sophistication than others, it is certainly a valuable, free tool to have in your arsenal.
  7. Buxfer: Don’t worry, just because you’re out of college doesn’t mean you still can’t have roommates. Unless you’re making buku bucks or live where housing is cheap, chances are you have a roommate or two (yes, besides your cat).  Yeah yeah it lets you do all that budgeting and financial planning stuff, but Buxfer is also great for sharing expenses. Whether you’re trying to figure out rent and utilities with your roommates, collect on IOUs, or hinting to your significant other it’s time he/she paid for dinner, this app is an easy way to reduce tension in your life.
  8. Pocketsmith: Yes, another app to help you keep track of bills! The good thing about Pocketsmith, in addition to its smooth interface, is its long term planning options. It can be easy to fall into the trap of living month to month, with all these new expenses coming in that you didn’t have before. Pocketsmith helps keep you on track with your monthly and annual spending compared to your actual income, allowing you to start building a savings that lasts more than two months. For those that like to have concrete goals or those that have trouble holding themselves accountable, this is the platform for you. The calendar-based viewing allows you to see with a quick glance how you’re doing from week to week.
  9. FINRA: Wait a minute….that’s not software, that’s just the government!? Actually FINRA isn’t the government, it’s a private corporation that is regulated by the SEC, but still they’ve got some nice free tools. Between their Broker Check and Risk/Scam Meter you can save yourself a lot of grief and avoid financial predators. For those of you who aren’t interested in combatting fraud and doing background checks on your potential financial advisors, these tools are not for you. Bernie Madoff eat your heart out!
  10. Credit Karma: Finally, acredit score that’s actually free! Hopefully none of you got caught up in FreeCreditScore.com, because Credit Karma will give you that score for virtually free (you do have to give up the last four digits of your social; they’re not mind readers). They give you a report grade based on a variety of factors, compare you to other similar users (in terms of age, state, etc.), and suggest ways to improve your score and lower your overall debt. There is a slight conflict of interest in that different credit card companies can advertise on the app, but it’s fairly obvious and, because it’s free, you know they had to pay the bills somehow.

Use this list as a nice jumping off point for your path to a higher level of financial responsibility. I’m sure many of you have different programs that you use already that aren’t listed, so feel free to leave suggestions in the comments. Happy saving!

Ten Tips for Recent-College Grads to Save More Money

Ten Tips for Recent-College Grads to Save More Money

While money might be tight for recent college grads, there is no better time to start putting some money away for the future. Here are ten tips to help you save more.

You're finally done with school for a while and have begun to earn some money instead of always spending it. While savings may not be on the top of your mind, it should be. Money that you save in your twenties has a long time to grow and with the power of compounding interest can become quite large in the future. Whether you decide to use that money to start a business, buy a house, or live comfortably in retirement, the earlier you get into the habit of putting some money away, the better.

Below are some tips you can use to maximize the amount of money you put into your bank or investment accounts.

  1. Write it down: In college it was acceptable to live paycheck to paycheck (or entirely off your parent’s generosity). Now that you’re on your own, one of the keys to sticking to a budget is committing to it on paper. There is a difference between not spending all your money and purposely setting money aside for future use. Everyone has a point of diminishing marginal returns between spending money now and saving it for later, but whatever that point is for you, make sure you’re setting a consistent amount per paycheck aside. One suggestion I’ve heard for those struggling to stay on budget is to take out the amount you’ve budgeted to spend for that month in cash. That way, when the cash runs out you know you’ve hit your budget. It’s much harder mentally to part with bills than it is to buy something with the swipe of a card.
  2. Take the Match: If you’ve managed to snag a full time job then it’s possible that your employer is offering you a 401k match program. Take the match. This is free money.  Not only will your company be depositing extra cash into your account via the match, but the money grows tax-deferred, meaning you will not be taxed until you withdraw the funds later in retirement. If you really need the money later in life, you can also borrow against your 401k funds.
  3. Interest Rates and Inflation: It is important to realize that the interest rate you think you’re getting on your savings account, certificate of deposit (CD)[1], or bond is not the return you’re actually receiving on your money. As the amount of currency in the economy increases, so does inflation, meaning that your gains are relatively worth less. In fact, if the inflation rate is high enough and your interest rate low enough you are essentially gaining nothing by leaving your money sitting in your account. The bank knows this of course, and adjusts interest rates according to inflation, (the “real” interest rate). Do your homework, and keep this in mind when deciding where to keep your hard earned coin.
  4. Build credit while you can: You might be wondering what place a spending vehicle has in an article on savings, but building credit is actually critical to saving money in the long run. You’ll want credit later in life (or even now) to buy a car, house, or any other sizeable bank-financed transaction. Unless of course you can pay for all of that in straight cash, it’s good to get a credit card while you have a consistent income (assuming you have one) so that you can secure a favorable credit limit. The goal here is to buy a durable good and pay it off slowly and on time. By doing this you can build a solid credit history and secure a lower interest rate when it comes time to take out a loan.
  5. Credit unions are your friend: They tend to give you better interest rates than typical banks, less and/or lower fees (which are always helpful when you’re just starting out), and favorable annual percentage rate of charge (APR)[2] on credit cards. Mine in particular has the added benefit of only charging a 1% fee on all international transactions, making it an ideal tool for traveling abroad. Credit cards also have the added bonus of refunding fraudulent charges where a debit card does not. You can find credit unions in your area here.
  6. Know your loans: There is a small minority of students who are fortunate enough to graduate without debt, but for the rest of us, loan payments will soon become a part of our monthly “routine”. That being said, there are certain things you can do to mitigate some of the damage to your wallet. One of those things is loan consolidation, which is available for federally funded loans (I’m currently considering this option as we speak). Loan consolidation can result in a reduced overall amount of debt, and only having to worry about one loan payment makes it less likely that you’ll end up with late fees (not that you’d ever forget anyways).
  7. You don’t have to pay for it all at once: This is true for loans and any other transaction where you don’t have to pay the entire balance up front (which is everything if you use a credit card). The tradeoff between avoiding interest rates and having spending flexibility (and future savings accumulation) cannot be ignored or pawned off due to ignorance of other options. Just because you have the funds to pay off sizeable chunk of your loans doesn’t mean you have to or should. That cash could be used to fund other opportunities and get you through periods of unemployment, so you’re not forced to take a job you don’t like just to pay the bills. It’s also a consideration you have to make when determining whether or not to buy or lease a car, for example. It’s nice to own your ride, but leases tend to come with maintenance and give you more month-to-month flexibility.
  8. Don’t be afraid to negotiate: There are few things in life that are non-negotiable, and the ones that aren’t you can still try to finagle. Whether it’s overdraft fees or interest rates on your accounts, you won’t get what you don’t ask for. Banks today are a dime a dozen, and they heavily compete to house your precious earnings. If you don’t like what you’re hearing, switch banks, or at least threaten to.
  9. Hold off on health insurance if you can: Thanks to the Affordable Care Act, we all get to stay on our parent’s health insurance until we’re 26. If they’re ok with keeping you on the plan and/or the cost of your company plan is more than what it takes to keep you on your parent’s plan, then opt out of insurance at your full time job. Companies deduct benefits from your salary, and one easy way to save is to take more home each paycheck. However, if you do need insurance and are working a temp job (which usually won’t provide insurance) or on the job hunt, it might not be a bad idea to work at a local CVS or grocery store to be eligible for benefits. You can’t work if you’re not healthy, and without health insurance medical fees can make visits to the doctor unaffordable.
  10. Read your snail mail: This is something I haven’t always been the best at (that’s why they have e-statements and notifications), but it is important. Your bank, credit union, or other financial institution will periodically send things to you in the mail. These documents range from bank statements to changes in terms and conditions and *gulp* even fees. If you don’t read your mail, you won’t know it happened, and you’ll be setting yourself up for failure. Do yourself a favor, and sift through all the junk mail to make sure you’re not missing anything.

This isn’t by any stretch of the imagination meant to be an exhaustive list of guidelines, but they are easy to implement and can pay huge dividends if adhered to. Look out for the next article on digital tools you can use in conjunction with these methods to keep your life on track.

Are you a recent college graduate with some other money saving tips? Post them below. I'd love to hear them.


[1] A financial product with a set maturity rate that pays the owner an agreed upon interest rate in exchange for restricting withdrawing funds on demand without incurring a penalty. They typically range in length from one month to five years.

[2] The rate per annum at which your financial institution charges interest on your outstanding debt

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Citibank Offers A 15 Year Fixed-to-Floating Rate Structured Note With a Yield Up to 10%

Citibank Offers A 15 Year Fixed-to-Floating Rate Structured Note With a Yield Up to 10%

Rate information contained on this page may have changed. Please find latest savings rates.

Citibank is syndicating an interesting Structured Note which is very similar to the one issued by JP Morgan last month, but is callable, has a 10% coupon and has no S&P contingency.

I have written previous articles on this website about Structured Notes (an introduction to these notes is here).  While Structured Notes involve real risks, I have suggested that those trying to put money away safely with a long horizon can pick up yield by placing some small part of their assets in these Notes.

In this recent article, I discussed a JP Morgan Chase issue that was tied to the spread between the 30 year Constant Maturity Swap (CMS) and the 2 year CMS.   The instrument, which is now fully syndicated, pays the 30 year rate minus the 2 year rate times 4 to a maximum of 9% annually, provided the S&P stays above certain benchmarked levels.

This new Citibank offering is similar, except it is tied to the 5 year CMS instead of the 2 year.   The Note, which is callable, pays 10% in the first year and then in years 2 through 15 pays four times the 30 year CMS rate minus the 5 year CMS rate to a maximum of 10%.   Determination of applicable rates is based on a measurement date 2 business days before the quarterly pay date, and the Note pays nothing if the 5 year CMS rate is greater than the 30 year CMS rate on that measurement date.

I was somewhat enthusiastic about the JP Morgan Structured Note and actually took a small position in it.   The Citibank Note will be more interesting to some as it has certain advantages over the JP Morgan issue.  In particular, I discussed the large risk associated with the payment condition set in the JP Morgan Note that the S&P index not fall by more than 25%.  The Citibank Note does not have this S&P contingency; it is entirely based on the CMS spread.   It also pays 10% in the first year and can pay up to 10% in subsequent years.  Earning 10% on your money is obviously more attractive than 9%.

I personally am not sanguine and would not recommend buying these Citi Notes for three reasons.  First, unlike the JP Morgan Notes, this Note is callable after the first year.  On an illiquid 15 year note, a call feature creates tremendous disparity between the buyer and the seller/issuer.   The seller, Citibank here, has the option to call it quits at any given quarter if the spread is not moving in their favor.  Second, I am more concerned especially when I look out over a 15 year horizon at the spread between 30 year and 5 year interest rates (as reflected in CMS), than I am about the spread between 30 year and 2 year rates.  (I will however admit that charting the rate for the last 15 years shows that the risk has not been dramatically greater.)  Third, Citibank is less credit worthy than JP Morgan, and would be more vulnerable in the event of another banking crisis in the next 15 years.

Rate Comparison

While I wouldn’t recommend this instrument, those interested in this note can find it listed under CUSIP 1730T0A82 and ISIN US1730T0A821.