Financial Apps for Lazy People

lazyIf you’re like me, you want to use your money well. You want to buy things you want. You want to pay yourself first by setting a few dollars aside for emergencies and investing a few coins for retirement. You want to pay your bills on time, and in full every month but those things rarely happen the way you know they should. Behavioral economics explains that most people do better when things are automated and we don’t have to actively make choices. Why do you think so many people know exactly what they need to do and then they still don’t do it?

Making good financial decisions with every single purchase day in and day out is challenging. Instead of making things harder for yourself why not use automatic savings and/or investment apps? Here is a round up of what’s available.

 

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Apps for Automatic Saving

Digit – There is a free trial period of 100 days. It’s $2.99 a month after that. It basically uses an algorithm to figure out how much money can be moved from your checking account into your Digit savings account. Digit accounts are FDIC insured. There is a desktop version and an app. FAQs are here.

Qapital – Free. You set “rules” that tell the app when and how much money to move to your Qapital account to reach your savings goals. It’s a little more complicated than Digit. Qapital accounts are FDIC insured. App only. FAQs are here.

To read a comparison of Digit and Qapital, click here.

 

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Apps for Automatic Investing

Acorns – It’s $1 per month for accounts with less than $5,000 in them. The app rounds up the change from purchases and invests the change in the stock market. Find out more here.

Stash – There is a $5 minimum and $1 monthly fee for accounts under $5,000. You decide when to invest and how much to invest. Find out more here.

 

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Apps to Manage it All

Mint – Free.

YNAB You Need a Budget – Free for 34 days and $4.17 every month after that.

 

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Personal Finance Software

Quicken Money – if you’re not a fan of phone apps but you’d still like to keep an eye on your money, this may be the software for you. It tracks spending, can track investments, and even comes with a free app if you’re so inclined.

 

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Other Options

If all this sounds like a little too much, you can stick with the tools provided by your financial institution (many offer programs to help you save the change from transactions or create a holiday savings account), invest in your 401k or 403b through your job, or invest for retirement on your own by opening an Individual Retirement Account (IRA) through whatever company suits you.

Whatever works for you is best. There is no right or wrong. It’s important that you start now though. Even if you can only use the change from your purchases, something is always better than nothing. Take advantage of compound interest and start now.

 

 

 

 

Good Bye MyRA

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MyRA was a program started to help young people and the working poor invest for retirement. Contributions could be as low as $5. The hope that young people and people with few resources could take part in investing for retirement (because we all know Social Security isn’t gonna be enough) was a lofty goal. This may have been especially helpful for people of color since we’ve all read the studies about net worth and cycles of poverty.

Unfortunately, the MyRA program will be stopped under the Trump administration. It was never really given the resources to take off. That was the main reason given for its close. The working poor don’t have lots of options to move up the socio-economic ladder and now they’ll have one less option.

myRA Might Be the Solution for High School and College Students

myRA

If you’ve read “10 Things College Students Need to Know About Money” you know that I am a HUGE advocate of young people investing from retirement as soon as they have earned income. For many people that time is while in high school or college while you’re working part-time or eeking a living out of financial aid. Often, young people don’t know how to open an Individual Retirement Account (IRA) or don’t think they have enough money to open one (get my list of investment accounts you can open for less than $100 here).

The United States government is here to help with the new myRA (my retirement account, get it?). According to the U.S. Treasury,  these accounts are:

  • Easy to set up (you can have the money deducted from your payroll check if you wish)
  • Designed to help people with little money or no access to a retirement plan from work.
  • No risk of losing money (funds are invested in a Thrift Savings Plan-like account)
  • The funds you invest are NOT tax-deductible but you also can take them out whenever you like without penalty.

The best part? There is no minimum amount required to start an account and according to Forbes, ” additional contributions only have a minimum of $5.” The goal is really to get you into the habit of investing when you are young and have few dollars. The return isn’t great (think 1% or 2% per year) compared to a regular traditional or Roth IRA or 401(k)/403(b) but starting now with a few dollars and little interest is better than not doing anything.

Fool.com also notes:

Account holders can contribute up to $5,500 per year ($6,500 if over 50) and may continue to contribute until their total account balance reaches $15,000. All funds are invested in a newly created Treasury bond

Once you’ve grown a nest egg big enough to open a traditional or Roth IRA, or you have a job that provides a 401(k) or 401(b) hopefully with matching, you can roll the money over into a new account.

Click here to find out more about myRA accounts.

 

 

Wanted: Single Women to Invest

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Financial Advisor Magazine just came in the mail. This month there is an article about attracting more single women as clients. There are two great quotes that I wanted to share with you:

“Women are better investors than men” – Wibberly, CIC Wealth

“80% of men will die married but 80% of women will die single” – Penta BBH, Center for Women & Wealth

If those two quotes aren’t enough to get to start investing, I don’t know what else to do. Those quotes tell us that women are AWESOME at investing and that heterosexual women are going to have a substantial amount of time not married (at least our 20s and ten, fifteen, perhaps 20 years after our partners die). What are you waiting for?

Start investing now. If your job offers you a 401k or 403b (tax benefits and usually matching) start contributing now. Call HR. Now. If you’re worried about how much money is going to start coming out of your check, start by contributing just 1% and increase your contribution percentage a bit every year.

If your job doesn’t offer you a retirement plan, open an Individual Retirement Account (IRA) as soon as possible. Depending on whether you choose traditional or Roth there are tax benefits now or tax benefits later. You won’t get the matching but you will get to take advantage of compound interest.

Not sure where to begin? Find a fee-only advisor and get hopping! If you’re 30 years old and can contribute $415 per month you can build a million dollar nest egg by the time you retire at 67 years old. Can’t contribute that much? No worries. Something is better than nothing. If your nest egg ends up smaller than you’d like, you can partner your investments with your Social Security payments and go live in one of these 8 beautiful countries.

Either way, it’s time to get hopping.

 

How Much Money Do I Need to Invest to Become a Millionaire?

People tend to think that it’s difficult to start with nothing and end up a millionaire, but in actuality it’s not that difficult if you take advantage of the magic of compound interest. Business Insider recreated a chart from a David Bach book to illustrate this point. My only issues are that it assumes a 12% return every year which is a little optimistic and that it focuses on age 65 when the full retirement age for social security has now been raised to 67 to people born after 1960.

BACH-bi_graphics_building a million-dollar retirement account

A 10% return is more probable and an 8% return is a bit conservative. I prefer to be conservative.

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If  you start when you’re younger is takes less money, over more time, to become a millionaire. Regardless of when you start, it’s important that you start. Having something is always better than having nothing.

31% of Americans Have No Retirement Investments – Tips for Starting

Portrait of Smiling Family on Steps“Nearly a third, or 31% of U.S. adults said they had no savings or pension to help them afford retirement, according to the Federal Reserve Board.”  – CNN Money

Extended family sitting outdoors smilingI want to say that I’m surprised, but after working with students, employees and retired folks for the last seven years ….  this is what I already know. If you’re part of this group, you’re going to be in for a HORRIBLE surprise come “retirement age”. Either you won’t be able to retire at all or the money from Social Security will only be enough for you to afford a room in your kid’s house and no fun, but it’s not too late. Here are my tips for creating a retirement plan and sticking to it … at any age.

0 – 16

Think it’s too early to start thinking about your child retiring? Not so. Though you can’t take advantage of tax-deferred plans like IRAs (you’re kid probably has no earned income) you CAN put a few dollars away every month in a regular investment account, buy individual shares of stock or purchase savings bonds. Let’s assume that you contribute $50 per month (or $600 per year ….  birthday … Christmas …  ) to any one of these strategies and that the investment earns 2% per year on average (some years more, some years less). By the time that child is 67 years old, that investment would be worth $84,584.31. Imagine how much money it would be worth once your child started contributing too.

16 – 24

By this time you are probably working, but not making much money. You might think that $50 per month won’t amount to much anyway so why bother? Because that $50 per month, or more, could end up being $432,992.84! Once you’re working you have earned income and can take part in wonderful retirement investing plans like 401k/403b, if your job offers them, or Individual Retirement Accounts (IRAs), if your job doesn’t. You put in $30,600 over your working years (16 to 67) and you’ll end up with a half-million dollars … easy! Read more about this in my book 10 Things College Students Need to Know About Money.

25 – 40

Yes! Now, we are in the prime earning years! Not only do you have a job, you probably have a half-way decent job. No more ramen for you! It’s time to take it up a notch. If you have been investing (since you have that good job) increase that contribution. If you haven’t begun FamlyBlackcontributing yet, it’s time to start.

You might think that you don’t have any spare money to invest or you might not know how to invest (read Money Matters: The Get It Done in 1 Minute Workbook), but it’s easier than you think, especially if your company offers a retirement plan with a company match. On your own, the average American can find $50 worth of spare change every month. PLUS, think about the ways that you waste a few dollars here and a few dollars there every month. Assuming a monthly $50 investment, starting at 30 years old, into a tax-deferred retirement account could still net you $136,725.48. Bump that up to $75 per month and you’ll be looking at $205,088.22. Not too shabby!

40 – 67

If you’re here then you are squarely looking at retirement …. perhaps. In Money Matters: The Get It Done in 1 Minute Workbook I have a worksheet that asks you to take a look at where you are and where you’d like to be. If you’re path is not heading in the direction you’d like it’s not too late to change.

You’ll need to do a little more to catch up, but it’s not impossible. A monthly $200 investment with an 8% return could turn into $229,797.95. Use the Social Security Administration’s estimator to find out how much you’ll get per month once you’re retired. You may find out that you need to work a few extra years. You may find out that you’re fine. Ether way, knowing is better.

If you haven’t begun investing for retirement yet, don’t be downhearted. The time is now. Don’t wait another day. Contact Human Resources at your job and find out how to start investing. Find a fee-only planner and take a comprehensive look at your financial situation. Buy a book to learn the basics and get started.

Working hard won't get you what you want. Working smart will.

Working hard won’t get you what you want. Working smart will.

It begins now.

 

Shay Olivarria is the most dynamic financial education speaker working today. She speaks at high schools, colleges, and companies across the country. She has written three books on personal finance, including Amazon Best Seller “Money Matters: The Get It Done in 1 Minute Workbook”. Shay has been quoted on Bankrate.com, FoxBusiness.com, NBC Latino and The Credit Union Times, among others. To schedule Shay to speak at your event visit www.BiggerThanYourBlock.com

Invest for Retirement NOW

broke“Twenty-one percent of those surveyed who have not retired have saved nothing for retirement and 44 percent have saved less than 10 percent of their salary.”

This quote is from Financial Advisor Magazine talking about a survey done by TIAA-CREF. How do people think that they are going to live in retirement? Do they plan on retiring?

Regardless of how old you are, it’s better to have something rather than nothing. Take a look at how much the Social Security Administration will pay you in retirement and you tell me if you can afford NOT to invest an extra $50 per month in your 401k, 403b or IRA.

Let’s take a look at the numbers, shall we?

Start Investing  Per Month  % Return   Value at 67

18                      $50                      9%          $536,841.50

21                     $50                      9%         $408,642.74

30                     $50                      9%         $178,618.62

40                     $50                      9%         $68,888.51

50                      $50                       9%         $24,125.50

It’s pretty simple:

  • If you have a 401k or 403b at your job you probably have a match. Investing a few dollars every pay period lowers your tax base (instead of paying Uncle Sam you invest in yourself) and your company will contribute a few coins to every dollar you invest. Start early. Invest often. Check and see how much contributing $50 or $100 each pay period will change your take home pay. There won’t be much change in how your check looks every two weeks, but it could change how your retirement looks.
  • If you don’t have access to a 401k or 403b then open an Individual Retirement Account (IRA) at a brokerage house that you trust. You have to fill out a two page application and send over a voided out check. You can open many accounts by promising to contribute at least $50 per month. That $600 per year could grow into 5 or 6 figures using compound interest. Start early. Invest often.

If you are thinking about investing and you’re not sure where to start:

  • If you are a member of a credit union: contact Balance for FREE help.
  • If you have an Employee Assistance Program (EAP) at your job: contact the EAP for FREE help.
  • If you do not have access to these: find a fee-only financial advisor for help.

You can create the life you want.

You are powerful.

Go get it.

PEACE,

Shay

Order Money Matters on Amazon.com

Order Money Matters on Amazon.com

Shay Olivarria is the most dynamic financial education speaker working today. She speaks at high schools, colleges, and companies across the country. She has written three books on personal finance, including Amazon Best Seller “Money Matters: The Get It Done in 1 Minute Workbook”. Shay has been quoted on Bankrate.com, FoxBusiness.com, NBC Latino and The Credit Union Times, among others. To schedule Shay to speak at your event visit www.BiggerThanYourBlock.com