How good are you with your personal finances? These apps can help you find out
Here are some of these apps and how they can make your life easier.
Most of us want to be a little bit better with our personal finances. Whether it’s because we want to glide smoothly into retirement, have a back-up fund, or simply save up for a major investment, personal finance habits play a major role in our lives and unless you have the infinite income to spare, it’s something you worry about too.
But there’s a huge difference between wanting to be better with money and actually achieving your goals. Many times, it can be difficult to keep track of spending patterns and understand the impact of major expenses such as rent or monthly payments.
Fortunately, there’s an app for that. More specifically, a whole series of apps, which can help you step up your money management and be as good with finances as a Fortune 500 entrepreneur. Here are some of these apps and how they can make your life easier:
American borrow a lot of money, in the form of many types of loans. Last year, for example, more than 83 million people took out a personal loan to cope with emergency expenses or stay on top of bills. In addition, people take loans to purchase vehicles and properties. Contrary to popular belief, taking out a loan isn’t a bad idea in itself. In fact, there are many alternatives to traditional banks nowadays and if you find the right terms, getting a loan to buy something can be better than paying for it upfront.
However, many times, you can end up paying way past the product’s real price and the loan can make your financial situation worse. To avoid this, a choose your loans like a pro, use a loan calculator, which gives you an estimate of the total payback amount, adding the annual interest rate. This way, if you discover that you’ll pay double for a smartphone that will be outdated in two years, you can look elsewhere for better terms.
Budget tracking isn’t a habit that many people have, but it’s something you need to start doing if you want to have better control over your finances and limit impulse buys. Many people don’t use budget trackers because they barely have any money left after paying for rent and other essential expenses, but the truth is that no one is too poor for budget tracking. Unless you know exactly how much money you spend and where you spend it, you’ll be tempted to spend your money on impulse and you won’t know how close you are to reaching your goals.
Most of us have a general idea on where the money goes, but the problem with mental calculations is that we often to forget to count those tiny purchases such as stopping for a coffee after work or buying a dress that was on sale. In time, all these seemingly innocent splurges add up, but you don’t know where that money goes. Budgeting apps such as Mint, Acorns, and PocketGuard can help you with valuable insights. Adding every tiny purchase takes some getting used to but, once you form his habit, you’ll be surprised to find out how much you spend on certain categories.
Setting up a savings deposit is a mature financial decision that you’re never too young or too poor for. Even if you only set aside $50 per month, it’s important to form a savings mindset and think of your long-term financial security. But not all savings deposits are created equal. While some help you multiply your earnings with profitable interest rates, others are the equivalent of storing money under the mattress.
One Goldman Sachs survey showed that 60% of Americans with a savings account had no idea what their interest rate was and didn’t take interest rate into account when comparing providers. And that’s not a good thing, since the average annual percentage yield (APY) for banks was a mere 0.08% in December 2018, while high-yield savings accounts returned about 2% in the same period. For a long-term savings account, the difference isn’t neglectable. So, if you want to make sure you’re making the most out of your hard-earned savings, online tools such as this APY calculator can help you choose wisely.
Car depreciation calculators
It’s not exactly shocking news that personal finance experts don’t like vehicle loans. Monthly car payments are notorious for being the #1 factor killing your wealth and, on paper, it makes more sense to save money to buy a used car than to pay for a new one in monthly installments. But things aren’t as simple in real life as they look on paper, so many times a loan is the only option. When that happens, you can at least make sure that the car holds its value after you pay off the loan and doesn’t depreciate too quickly.
To find out if your car is a profitable investment or it costs you too much money, car depreciation calculators are a handy tool you can use. All you need to do is enter the purchase price and car age at purchase and you’ll get an estimate of how much the car will be worth after a certain period. Keep in mind, however, that these calculators don’t cover vintage, collector, or personalized vehicles, so if this is your hobby, you should ask an auto expert instead.
Salary calculators for freelancers
If you’re a freelancer, financial independence was probably one of the main reasons that prompted you to quit your job and try out the alternative. However, budget planning and expense tracking can be a bit tricky for freelancers because your monthly cash flow tends to fluctuate. In addition, you may not know exactly how much you’re making, because you don’t have the same weekly paycheck.
To smooth the transition from regular employment to freelancing, you can use a salary calculator to convert hourly payments to monthly salary and vice versa. This way, you’ll know your income, at least approximately, and plan your expenses more wisely.
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