Financial Symmetry News & Views

Archive for September, 2009

Looking for a way to better track your budget? Throughout the upcoming weeks, we will be bringing you personal reviews of some of the budgeting software available. Some will be free, online websites, while others will be computer software programs available for purchase or download.

Our first review comes from Heather Zaczek, our Operations Specialist, who has been using Mint.com for a little over a year.

What is Mint.com?

Mint.com is a free, online account aggregation tool that can help you plan, manage and stick to your budget. Setup is quick and easy—you can expect to have your accounts linked to Mint within a couple of minutes. Security is good, being at or above most institutional banking websites. Mint never asks for your account numbers, name or other personal identification information. Money cannot be accessed, moved or transferred within Mint, and all data stored at Mint is backed by bank-level data security protections.

How Do I Set Up an Account with Mint.com?

Setting up an account with Mint is simple. To get started, you will create a user ID, which is normally your email address, and create a password. Once logged in, adding accounts is simply. Your asset and debt accounts are aggregated by providing your institution’s user ID and password for the particular site and Mint does the rest. Mint has a search feature to find the correct login website for a particular institution, although some smaller, hometown banks and credit unions may not be available for connection yet. Once you have your accounts linked with Mint, simple, easy to read charts and graphs are available to create a budget and track spending. Budgets are set up monthly, and you are able to quickly view past months to estimate for the current month’s expenses. Your monthly budget appears on the homepage to show where your money has been spent so far, and how close (or away) you are from estimates through a color-coded bar graph.

What are Some Features of Mint.com?

Overall, the website is fairly easy to navigate, with tabs for transactions, spending trends, investments and ways to save on the homepage. For a better sense of security, Mint has established an alert system that you can customize for each linked account. These alert settings can increase your financial protection and awareness of suspicious activity within your accounts, a great feature that takes minutes to set up. Alerts can be created to notify you if large purchases are made, credit limits have been reached, or low balances exist within accounts.

Mint also tracks your interest rates, credit card reward programs and your credit payment habits to look for ways to save money. If your ABC card is costing you more money than say XYZ card, Mint will suggest switching your cards while estimating your savings on an annual basis. The great thing about Mint’s suggestions is that they are running in the background rather than popping up on your homepage. Saving strategies are located on a separate page and can include customized views for checking, savings and investment accounts.

Are There Drawbacks to Mint.com?

Since Mint.com is free, you can expect a few areas to be less than perfect. There is not a feature to download transactions from institutional websites directly to Mint, and transactions cannot be manually added. Cash transactions can be split into different categories if you have a linked ATM transaction, which enables you to track each cent spent from the cash withdrawal. Another drawback is associated with linking transactions between accounts. For instance, Mint has a little trouble sometimes tagging transfers between checking and credit card accounts, making it difficult to match payment transactions in relation to specific dates. Mint’s reports are simple and informative, without elaborate graphics. Time lines can also become an issue when comparing data over long periods of time; Mint’s standard time frames range only from the time you linked your accounts forward, so older transactions may not be reflected. This may work out as a benefit of Mint if you are just starting with a budget and are not too concerned with past expenses.

Are There Any Additional Features of Mint.com that Make Budgeting More Interesting?

There are a few neat features of Mint that can make budgeting a little more interesting. Mint compiles data from users’ spending patterns so that you can compare your spending habits to those in your location—either state or large city. Mint also has a regularly updated blog with easy to understand financial concepts in every day language. A few recent posts include “The Pros and Cons of Online Banks” and “15 Ways to Eat Out More Spend Less.” Most blog posts include “Mint’s TakeAway” to provide suggestions on how ideas presented effect spending. Overall, Mint.com is a great, easy to use, free budgeting tool, that beats will outperform spreadsheets most of the time.

If you have any questions about Mint.com, feel free to contact Heather at hzaczek@financialsymmetry.com or 919-851-8200 ext. 205.

Chad Smith, CFP® was recently quoted on wsj.com. In the article, “Financial Advisers Look Local,” Shelly Banjo profiled several ways Financial Symmetry was reaching out to clients in the Triangle. Some of these initiatives included working with charitable organizations, educating younger couples, and providing information on the company’s blog.

Download pdf of article

A key aspect of financial planning is managing expenses.  However, setting a budget and consistently monitoring it is easier said than done.  That is why we recommend using an expense tracking software to keep track of your spending.  Mint.com is a relatively new personal finance website that takes a lot of the work out of expense tracking.  Click the link below to watch an instructional video about how to use mint.com and learn the benefits and security features.

With unemployment high, requests for loans from friends and family members are on the rise.  This can put a potential lender in a difficult position.  They do not like to see someone they care about having financial difficulties, but they also know that personal loans can become gifts as default rates are high.

There is also a risk of bruised feelings due to misunderstandings about repayment expectations.

To reduce the risks and potential damage to an important relationship, clearly spelling out terms and expectations up front is vital.

Virgin Money can help you document a personal loan with their Handshake Basic service.  And their Handshake Plus service can even handle payment processing.  Review their Personal Loan Guide, and pass it along to whomever you are considering loaning to or borrowing from.

New research has found that men are more likely to take larger risks in their financial decision making than women. Using a sample set of a group of MBA students the researchers looked for a correlation between higher levels of testosterone and a willingness to take a chance on a less likely outcome if the potential payout was greater. After graduation, more male students will follow a career path into investment banking or trading on Wall Street where the stakes are always high.

http://www.fa-mag.com/fa-news/4408-testosterone-may-affect-financial-risk-aversion.html

Back in March, many investors were wrestling with the emotions of wanting to preserve whatever money they still had.  Generally, this thought process involved convincing themselves that cash or CD’s were safer investments than stocks.  Using a little hindsight, those decisions to move into “safer” investments, do not seem as appealing after a 50% increase in the S&P 500 index since then.  This type of behavior is a classic example of the typical mistakes that investors make at turning points within the markets.  In a recent Wall Street Journal article, “Playing it Safe Can Hurt Returns,” you can see examples of how impulsive moves to safe investments can negatively influence your investments.