Like most people today I depend on apps. On a recent run with some friends, I realized how much we all depend on these apps to monitor our exercise and other activities. Of particular interest to this financial advisor, an increasing number of apps are available to help people manage their personal finances. Which leads to an interesting question: what should you look for in a personal finance app?
Before you start shopping, consider how you want to use a personal finance app. They differ in the type of functions available. For example, Bankrate.com breaks them into these four categories:
Budget tracking apps allow users to record expenditures as they are made to keep track of bank balances and budget categories. Some allow users to create a budget and then watch how closely expenses are tracking to it.
Financial assistant apps collect, store, and report information from users’ various savings and investment accounts, providing a single place to keep track of asset performance.
Loan calculator apps estimate payments and current balances for loans. Some also track how long it will take to achieve pay off.
Spending and saving apps allow users to perform a wide-range of activities, including “what if” scenarios.
Once you have decided on which category may be useful, there are additional criteria to consider. Taking the time to do some research before you download will help you select the app that best fits your personal finance needs.
- Credibility. As everyone knows, not everything written on the internet is true. For example, The Wall Street Journal and The New York Times are generally considered more credible than an anonymous blog. The same principle applies to apps: understand who’s providing the information.
- Security. Before using any financial app, read the privacy or security statement which is typically located at the bottom of the company's web page or in the About section of their website. If you don't see one online, contact the company to request a copy.
- Clarity. A personal finance app should provide information that is easy to understand. Some apps offer detailed charts on stock performance using a wide variety of financial analyses. However, if you don't understand the underlying report, the app may be useless.
- Relevance. Remember the old saying: “If the only tool you have is a hammer, you tend to see every problem as a nail.” The same applies to financial information. A mutual fund company may be an excellent source of information about mutual funds, but it may be less useful for providing information about estate planning.
Using an app to help with your personal finances may be a significant first step in becoming a better money manager. When it comes to financial planning and analysis, no single solution works equally well for everyone. An independent financial advisor in DC can be a trusted ally to help you make sound financial decisions.
Have questions? Get in touch today!
Source: Insights Articles
Material discussed is meant for general illustration and/or informational purposes only, and it is not to be construed as investment, tax, or legal advice. Although the information has been gathered from sources believed to be reliable, please note that individual situations can vary. Therefore, the information should be relied upon when coordinated with individual professional advice.