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 21^st 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!

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.

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

Several months ago I wrote an article providing some guidelines on how much of a person's assets should be in cash. After writing the article, I began to ponder the question in even greater detail, especially as it relates to retirees.

There is a lot of information available on how much of a retiree's portfolio should be comprised of stocks and bonds, but when it comes to cash, the information is almost non-existent (for the purpose of this article, I am defining cash as money held in a bank or credit union and covered by FDIC or NCUA insurance). Interested in learning more, I found some good advice that can guide any retiree when thinking about the cash component of their saving and investing plan.

• View the best savings account rates.
• View the best CD rates.

I first spoke with Phil Demuth, a frequently consulted investment advisor to high net worth individuals. He is a contributor to Forbes and is the founder of Conservative Wealth Management LLC. In Phil's opinion, cash has two functions:

One, it allows holders peace of mind and the ability to sleep soundly. This is especially true in difficult economic times (think back to 2008). Two, cash provides individuals with flexibility so that they do not need to sell volatile assets when prices drop and they can maintain liquidity in a bear market. Cash also allows individuals to take advantage of buying opportunities when the market is down. Individuals with lots of cash do not need to panic in hard times.

The downside of cash is the opportunity cost. Money invested in an FDIC insured account paying 1% APY is losing ground when the stock market goes up 10% or more in a year. Several other investment advisors I spoke with didn't like the idea of including cash in a retirement portfolio. David Houle, CFA from Seasons Investments stated that:

"In my opinion there's very little reason to hold cash in a retirement portfolio, especially given the low yields to be had on cash holdings. What's implied by the term "portfolio" is that it's the pool of savings that have been set aside to be invested for capital gain and income. That money, in general, should remain fully invested in assets that are going to generate a return. There are periods of time where one might want to hold cash temporarily for tactical reasons, but this is different than carving out a permanent allocation dedicated to cash."

Ilene Davis, a Certified Financial Planner echoed David's comments, saying:

First, to clarify, what some people consider their "retirement portfolio" are the qualified plans they have. A true retirement portfolio should include anything that is likely to be liquidated to provide funds through the retirement years.

Therefore, instead of focusing on a percentage that should be in cash, I would recommend that the focus be on how many months of expenses, plus emergency fund, should be in cash.

Brian Frederick, a CFP from Stillwater Financial Partners told me that:

The cash portion of a portfolio depends on someone’s age and what their work status is. For people in retirement, I typically like to see one to two years of living expenses held in cash or CD’s as it will provide a risk free source of money if they need to tap into it unexpectedly. For people still working, I encourage them to have 3-6 months of cash set aside for emergencies. Ideally, this would be in a separate bank account but I’ve also had clients do it inside of a Roth IRA if that’s their only money.

He continued to say:

Interest rates fell off a cliff around Thanksgiving 2008. As a result, cash should be viewed more as a safety net than an income producing asset class. The other side of the coin is that it is dangerous to reach for yield by using bonds – bond prices go down when interest rates go up. Most bond funds this year have lost money as a result of interest rates going up in May & June.

So does cash belong in your portfolio or is it just a part of your emergency fund? Unfortunately, there is no one formula to determine how much of an individual's net worth should be held in cash. It depends on how you think about investing and also your own emotional thresholds and risk tolerance.

Almost all of the experts agreed that at a minimum, those in retirement should have at least 3-6 months of living expenses in cash, while many think that 1-3 years is more appropriate.

Lower Risk Tolerance

Beyond this emergency fund, if you believe, as the famous investors Benjamin Graham and Warren Buffet do that cash is king, then you should set some aside to buy low, when everyone else is heading for the exits. This is exactly what Warren Buffet did in 2008, getting bargain prices on Goldman Sachs and other distressed companies and assets. Cash should also be part of your portfolio if you lose sleep every time the market dips. Peace of mind is itself a valuable asset. The percent of your portfolio you hold in cash will depend on the net worth of your assets, your income needs, and a variety of other factors. Mr. Demuth did caution that investing in bonds is not a substitute for cash. While some short duration, high quality bonds may approach cash in their risk profile, bonds can lose value and some can even default.

Higher Risk Tolerance

If you believe that markets will not crash during your retirement, market volatility does not bother you, you have enough wealth to weather a potential loss in assets, or you want to get the highest yield on your assets, then you should limit your cash to an emergency fund to cover living expenses for a certain period of time.

A qualified investment advisor will be able to listen to your need and design a suitable portfolio.

For the cash that you do hold, make sure you are maximizing its return by getting the best possible rate. BestCashCow's rate tables provide the most competitive rates on savings, CDs, and other FDIC insured or NCUA insured bank and credit union accounts.

• View the best savings account rates.
• View the best CD rates.

You can also use our Savings Booster Calculator to see how much extra income you can earn by switching to a high yield FDIC account.