Financial Technology Can Stretch Your Dollar

Let’s face it, saving money isn’t nearly as fun as spending money. But saving money is also more time-consuming than spending it. You can spend yourself into debt in just a few minutes, but it seems like it takes forever to save even a dollar. Luckily, technology can save you time as well as money. You just need to know what to look for.

So, let’s dive right in with the starting point for any savings plan. It’s a budget. You can’t save money until you know how much you earn and how much you spend. Now, no one likes to hear the words, “make a budget.” But it’s so easy to do these days. If you don’t relish the idea of putting pen to paper, there are scads of websites, apps, and programs that handle the drudgery of budgeting. Many of them cost nothing, and the ones that do charge, well, it only costs a few dollars. Here’s how they work.

One of the most popular budgeting apps is called Mint. They were the first one, way back in 2007. Another is called Personal Capital. There’s also Monarch and a bunch more. But a lot of banks and credit unions offer similar programs on their websites for their customers. Best of all, many are free. But how do they work?

These apps safely sync with most bank accounts, so they automatically pull in your financial data — all with tight security. Then, you just type in your income and expenses, and these programs do the math for you. You can even project your savings if you eat one less takeout dinner, or if you refinance your mortgage. The software does the heavy lifting!

Of course, each app has its own special set of features, and if you want a deluxe version, you can even pay a few bucks for an app like YNAB, which stands for You Need a Budget. Or you can get an upgraded version of some free apps, like Goodbudget Plus and EveryDollar Premium. They come with different plans, and you can spend anywhere from $6 a month to $20. But really, for most people, the free versions are just fine

If all of this is a little too techy for you, there’s a middle step. Websites like Tiller let you download customized spreadsheets that stay on your computer, and you can easily personalize them. Quicken has software that’s been around for decades and most of us are familiar with. Each solution has its pros and cons, but they all work. So it’s really up to what makes you feel the most comfortable. But they’re all good alternatives to pen and paper.

We’re not big fans of the extreme couponing trend, mostly because we preach moderation in all things. You can spend many hours clipping coupons to save not very much. But we suggest a simpler way: Find the stores you love and follow them on Twitter. Then keep checking your feed, because stores like the ones listed here have gotten quite sophisticated about tweeting out back-to-school deals. Thing is, some of these are “flash sales,” which means they come and go quickly. So keep that phone handy!

So we just talked about technology you can use to help yourself spend smarter. But what about saving more money? Many employers offer to help you with that, and they embrace a few different technologies to do it. Let’s review a few right now.

Why not get paid while you’re saving money? More than 9 in 10 Americans are paid through direct deposit, and almost all of them have access to a neat feature: You can direct some of that money AWAY from your checking account. You can send it DIRECTLY to a savings account you don’t normally see. Imagine if you send even $10 a week to a savings account. At the end of the year, you’ll have more than $500. And you literally spent a few minutes setting it up, then did nothing the rest of the year!

Direct deposit also works very well when you get a raise. Just divert that extra money into a savings account. You won’t be tempted to spend it because you never got used to having it, and you don’t constantly see it in your checking account. To set up multiple direct deposit streams, simply talk to your Human Resources or payroll department. They can walk you through this easy process. It’s basically a form you fill out, sometimes on your work computer, and then you’re good to go.

All right now let’s talk investing instead of saving. Where you work might offer valuable services that can save you big. One of the most popular is a 401(k), which helps you save for retirement. What’s so special about a 401(k)? Many employers match a portion of your contribution to this retirement account. It’s free money! It also has tax advantages and can result in you paying lower taxes.

A 401(k) isn’t just a tax-free way to save for retirement, and the employee match isn’t the only way to make money. You also invest your savings inside the 401(k). In other words, the money doesn’t just sit there like a savings account, earning interest over time. So even just a small amount invested today can turn into thousands of dollars in fifty years – without you having to lift a finger.

Nearly 7 in 10 Americans have access to a 401(k) through their employer. All you need to do is ask your Human Resources department how to get started. You fill out some paperwork, set aside maybe 1 or 2 percent of your salary automatically, and suddenly you’re saving money. Even better, you don’t notice it’s gone, because it comes off the top of your paycheck. Ask your HR department about 401(k)s as soon as you can.

If your head is already starting to spin, you’re beginning to understand how complicated investing can be. Fortunately, you can get free help. If your employer offers a 401(k), they often don’t start it up on their own. They work with big financial companies you’ve probably heard of: Vanguard, Fidelity, Merrill. These 401(k) providers offer a range of educational services. They won’t tell you what exactly to invest in, but they’ll help explain the concepts. Some even offer online quizzes to help you determine your risk tolerance. And all of this is free.

Before we stop talking about how your workplace can help you save money, there’s one other benefit we quickly want to mention. It’s called a Health Savings Account, or HSA. It does the same thing as a 401(k), except you set aside money for healthcare instead of retirement.

We could spend an entire webinar talking about these lucrative benefits, but we suggest you chat up your HR department. Believe it or not, they WANT you to take their money. Why? Because companies that offer these benefits know their employees will appreciate them. Those employees are more likely to stick around and work hard. So let your bosses help you save! Just talk to your HR department. They WANT to help.

Sometimes when we promote budgeting apps, people confuse those with Cash App, which is a specific mobile payment service. Others are Zelle and Venmo. Scammers often target these apps because you’re actually paying people through them. BUDGETING apps aren’t usually targeted because there’s little opportunity to rip you off. Still, this is a good time to review some of the tech used in scams – because it’s decidedly LOW tech.

Here’s a rule to remember: Never do anything just because someone is calling you. They’ll tell you about an old delinquent account, and if you don’t pay right now, the police will arrest you. Never mind that there hasn’t been a debtor’s prison in this country for two centuries. One of the most popular scams is a phone call from the IRS saying you must pay back taxes RIGHT NOW or the police will be summoned. For starters, the IRS never calls you, they only send letters. And never If you ever get angry phone calls demanding money, at least ask for a callback number. If they won’t give one, you know it’s a scam. And if they do, check the Internet to make sure it’s listed. Use technology to decipher the scam.

Thank you for joining us today, see you next time!