Transform your computer into a sound financial planner
Creators News Service
Still managing your money on paper? It's time to enter the digital age.
From paperless financial statements and online bill payment to the latest financial planning sites, the Internet may be the most valuable money management tool in your arsenal.
The top websites help consumers compile all their financial information in one location, see their spending patterns emerge and take charge of their home finances without shuffling a pile of paperwork or ever stepping foot in a bank.
"I have been digital for years, and the main reason was ease of use," said financial advisor Robby Schultz, a partner with Rollins Financial Counseling, an investment advisory firm based in Atlanta.
"I can access everything from my office, home or on the road. With a few keystrokes, I can pay all of my bills and never have to write a check, go to the mailbox or ever pay a late fee," he said. "Additionally, I can pull up past statements, review any items and notice trends developing."
Most banks, insurance companies, utilities and credit card companies offer the option to receive electronic statements and pay bills online. But jumping from one site to the next can be as big a hassle as sorting through the pile of snail mail to find a payment stub.
Sites like checkfree.com let registered users pay everything from household utilities and mortgages to cell phone bills and newspaper subscriptions from one secure, central location. Checkfree.com works with hundreds of companies nationwide and the service is free. Just register, link your bill payment to a checking account and set up an automatic payment schedule.
To track individual credit card purchases and daily debit card use, check out the latest money management sites like mint.com. Named one of the 100 Best Products of 2008 by PC World magazine, the website helps consumers track their spending and stay on target with their budgets by downloading and categorizing individual transactions. It's like having a personal financial planner.
Users register anonymously using only a valid e-mail address. It's free and it takes less than 5 minutes to sign up.
The site securely downloads transaction data from more than 5,000 bank, credit card and investment accounts on a daily basis to give users a near-instant overview of their spending habits. The results are presented in simple, easy-to-understand pie charts.
Set a budget for each category and mint.com will send a gentle e-mail reminder or text message if you go over your budget. The website also alerts users to unusual account activity, low balances, bank fees and upcoming bills.
Wesabe.com offers similar services, including the ability to review multiple account balances on one page and sort individual transactions by category. The site then offers personalized tips for smarter shopping.
If you make frequent purchases at a particular restaurant, for example, you will receive customized, user-generated tips on how to save money on your next night on the town.
While going digital can certainly streamline all things financial, it is not without its risks.
Reputable financial websites are more secure than ever, but the potential of identity theft and fraud do exist. Keep in mind, though, the risk is there whether you're pushing paper or entirely electronic.
"From my years as an advisor, I have had many clients that were digital and few had real problems," Schultz said. "The horror stories I have heard have always been from the ones that get paper statements, and you don't know there is a problem until you review the one monthly statement -- sometimes that's weeks after a problem has occurred.
"The benefits of checking online are, if you do it often, you can usually catch things pretty quick."
The key to protecting yourself is remaining vigilant, he said. Check your statements and accounts often.
Only access your accounts from personal computers with adequate firewalls. Do not store your log in information on laptops or work computers, and be sure to log out from each website when you are done. Unless you know a network is encrypted, skip the Wi-Fi networks for financial matters.
Finally, be sure to choose a strong password -- one with a combination of letters, numbers, symbols and capitalization.
"Something like 'FaiThful459' is going to be considered a very strong password, and the amount of time to hack in will not be worth it for most people," Schultz said.