What are the Best Options for Managing My Money?
The tools you can’t live without if you want to be successful.
Options are great. The ability to choose between different products is usually an advantage because you can find exactly what will fit your needs.
But with all of the choices and market saturation we face these days, the number of options you have for something like personal finance can simply be overwhelming. What do you really need to be successful and what can you really do without?
The information below can help you understand the different range of tools you have available and the steps you need to take to choose what’s right for you.
Basic personal finance really starts with a budget. You have to have some way of knowing what’s coming and where it’s going out as you spend. Without being organized, you can’t make effective plans to reach your goals. So as much as it may pain you to hear it, you need a budget.
But budgeting apps and PFM platforms can actually make budgeting easy – as in, enter a few account numbers and let the program do most of the work to organize everything. So it’s in your best interest to have a place where you can see all of your financial accounts and a full picture of your outlook all in one place.
Fact: Only 16% of Baby Boomers use a PFM, compared to 44% of Millennials.
If your bank offers a robust enough program, you may not need a third-party service like PowerWallet or Mint. But if your bank doesn’t offer a platform – or what they offer doesn’t fit all your needs, then going to an outside provider may be necessary.
Financial institutions offer a wide range of tools and resources you can take advantage of when you’re a client (or member, in the case of a credit union).
- In most cases, you should be an active user of your online banking platform. This will at least allow you to monitor your transactions and balances daily.
- Automatic bill pay is usually a huge advantage to avoid late or missed payments. You have to decide if you want to set it up through your bank – which your bank may give you certain incentives to do – or through the service provider. This second option can be beneficial if your bill payment amounts on certain accounts vary widely.
- Banking apps are practically indispensable if you’re a tech-savvy smart phone user. they usually offer extra features, like quick deposit by taking a picture of your check.
- Direct deposit of paychecks is almost always a great choice. The only downside is if you face garnishment to repay a debt or loan, you will lose a portion of everything that gets put into your account.
- Automatic withdrawals can be dangerous – particularly when you set up something like a payday loan. Auto bill pay is something you can turn on and off whenever you want, but auto-withdrawal is something you agree to at the beginning of a contract so it can be hard to stop it if you have a problem (or they can keep withdrawing even when you think you’ve paid everything off).
For the purposes of this section, we’re defining credit tools as anything related to your credit score if you have loans and/or credit cards.
- By law you are entitled to download one free copy of your credit report each year and, without a doubt, you should take advantage of this every year.
- Credit monitoring is useful to know exactly where your credit score is at any given time. You don’t necessarily need it – even if you’re about to apply for a loan or a new credit card – but it can definitely give you peace of mind. It can also help you make strategic decisions about taking on new debt.
- Credit repair is only really useful (or even relevant) when you have errors or mistakes in your credit report that could potentially be removed to improve your profile. If you don’t have mistakes, you don’t need credit repair.