A few great money management tools I use

A few great money management tools I use
November 15, 2017 Dan Navfield
In Apps for Life

With 100% transparency, a ‘tech focused investment portfolio’ featuring businesses like Apple, Alphabet and Facebook and seed funding from local tech heroes like Michael Cannon Brookes, Spaceship immediately caught my attention. At last, a sexy fintech startup shaking up the stale, bland superannuation industry.

If you’re like most people, you check your smartphone at least 50 times a day – looking at everything from text messages and work emails to weather alerts and box scores. But as many have discovered, your smartphone can help you keep tabs on your finances. Managing money, sticking to a budget and even handling investment decisions are easier than ever before with today’s crop of money management apps.

Here is a list of apps that I have found really useful in managing money.

1. The Barefoot Investor

Best to read before even looking at Apps.

Before bothering to download apps to manage your money it’s important to work out what you’re actually trying to achieve. If you only ever read one personal finance book, make sure it is this one.

As someone who considers himself reasonably well versed in money management I was amazed at how readable the book was for anyone at any stage of their financial learning journey, from the complete beginner for whom this book is eye-opening, to a personal finance veteran for which the book serves as a solid rehash of the fundamental concepts.

The book avoids complicated finance jargon that can often be off-putting to newcomers and instead lays out a set of simple yet actionable steps that anyone can follow. He argues that with just a few minutes each month and a few small tweaks to the reader’s lifestyle and money management habits anyone can begin to build long-term wealth by following his principles. I strongly encourage any reader to put his steps into place as the immediate effect of these actions will hardly be felt yet the long-term benefits will see you living a healthier, wealthier and generally less stressful lifestyle.

The core of the message boils down to a few key points. Firstly, take the discipline out of money by setting up automatic streams for your income as it reaches your bank accounts. This method sees part of your money being siphoned away into savings and investments without any ongoing involvement from the reader, effectively reducing the chances of the reader blowing their paycheck without any money reaching long-term savings, while still leaving spending money that you can use completely guilt free. Secondly, utilise the power compound interest via hands-off investment vehicles like index funds to steadily grow your wealth over time. To a complete beginner, these two concepts alone could prove to be completely life altering in the future. With enough time anyone employed in Australia can comfortably grow their wealth and stop stressing over day to day money management.

 

2. Pocketsmith

Personal Budgeting.

 

3. Acorns

Best app for painless saving.

In the same vein as the Barefoot Investors mantra of ‘set-and-forget’, the Acorns app is decidedly simple and effect. Basically, every time you make a purchase with a card connected to the app, Acorns rounds it up to the next highest dollar and automatically invests the difference in a portfolio of low-cost exchange-traded funds (ETFs) that you select based on your risk preference.

Acorns puts your virtual pocket change to work in an utterly painless way – users say that they never even notice the difference. Wouldn’t you love to find an extra $300 or $500 or even $1,500 in your investment account each year? The service costs just $1.25/mo. (for accounts Under $5k) or 0.275%/yr. (for Accounts $5k+)

Spaceship

Superannuation.

I left this one in, more as a ‘for consideration’, than as an actual recommendation. Like many tech geeks, I loved the idea behind Spaceship – 100% transparency, a ‘tech-focused investment portfolio’ featuring businesses like Apple, Alphabet and Facebook and seed funding from local tech heroes like Michael Cannon Brookes. Spaceship immediately caught my attention. At last, a sexy fintech startup shaking up the stale, bland superannuation industry.

But after looking a little closer the underlying Spaceship fund appears to be very average when compared to the standard market leaders.

  1. Their fees are higher – 1.60%, plus an additional $78 of admin fees per annum vs the Hostplus Indexed Balance Fund which charges just 0.02% plus an additional $78 of admin fees per annum.
  2. Although they spout transparency, there is no information available on the exact index funds they use
  3. Their performance benchmark is fairly low at CPI + 2.5% after fees and taxes.
  4. Their chosen investment mix -ie investing heavily in tech, doesn’t have any backing as being better/good than more traditional mixes.

But let’s look at the positives. What Spaceship has successfully done is make super cool. It has raised the profile of a rather boring, complacent industry and is encouraging millennials to take control of their future.

Spaceship has recently announced it will lower the fees on its initial investment option, Growth X, from 1.60% p.a. to 0.99% p.a, to meet the growing market disappointment with their claims to have ‘the lowest fees’.

To wrap up, I think the jury is out for the moment. I will stick to the advice from the book I mention above; select an indexed industry super fund, with super low fees and ‘set and forget’, ie the the Hostplus Balanced Index. Although it has a typically boring asset allocation, it uses index exposure and has the lowest public offer superannuation fund fees in Australia (as far as I am aware).

Expensify

Receipt tracking.

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