Quick – can you tell me your net worth?
How about the balance on your credit card (okay, cards)? Your savings account balance?
For many folks (okay, face it, most of us) the answer to those questions is only available after a multi-hour session digging through recent statements, online accounts, possibly tax returns, and the like. But it doesn’t have to be that way: and getting a handle on questions like this doesn’t have to cost a lot of money, either.
One of the first tenets of sound financial planning involves an understanding of where we are now. What is our current financial picture? What assets do we have? What liabilities do we owe? What is coming due soon? What income can we expect? Without an understanding of where we are, it’s hard to figure just how we’ll move toward our goal, be it financial independence, comfortable retirement, or a new home.
I have written in other posts about the various ways you can use the internet to help you with your financial records, and so in a way this is just an update. The difference is that we’re focused primarily on “organizing” our information here.
Two very good *free* options that I have had experience with are Yodlee (www.yodlee.com) and Mint (www.mint.com). These sites are commonly referred to as “account aggregators”, meaning you will have all of your account information in one place once you’ve set things up.
Each of these sites provides you with the ability to link all of your accounts – checking, savings, retirement, IRA, credit card, etc. – in one place. This takes a little while to set up the first time, because you have to go through all of your accounts and set up your aggregation site with the passwords, account numbers, and such. Once you’ve gone through this process, you’ve got all of that information available at your fingertips, and this is where the real power of the sites comes in…
Now, you can see at a glance what all of your balances are, up-to-date as of the moment you clicked on “update”. I’ve tested this out, and, while your mileage may vary, these aggregators have been current on activity that has happened within an hour or two. I went to the ATM and withdrew some cash, and within an hour or so I went to Mint and updated, and voila!, the account was already current.
In addition to the ability to see your balances, each of these sites will notify you when a bill is coming due (such as for a credit card), as well as to project your income and bills for the coming month or two. There are built-in tools that alert the user when spending in a particular category is above the norm.
Granted, these two tools are not the only ones out there, and they may not be the *only* tools you will use to organize your finances. You could also use the likes of MS-Money or Quicken, which both include online account aggregation tools as well – but each of these products comes with a price tag, albeit pretty low cost in the scheme of things.
With free tools like these available, there is little reason to *not* get your information organized these days. And for many folks, just getting things organized is the small step that becomes a giant leap for your personal financial situation. So get going – Aggregate!
Click the link to pick up a copy of A Social Security Owner's Manual or if you'd prefer the Kindle version (and let's face it, ALL the cool kids do!), you can find that at this Kindle version link.
I can learn from you, you can learn from me - please leave your comments and links!Jim Blankenship, CFP®, EA, is an expert in personal retirement, IRAs, and tax issues, with more than 25 years of experience in the industry. Read more from this author
And if you've come here to learn about queuing waterfowl, I apologize for the confusion. You may want to discuss your question with Lester, my loyal watchduck and self-proclaimed "advisor's advisor".