You know it’s important to spend time on your finances, but, for one reason or another, you’re not. Maybe you don’t have the time. Or maybe you feel like you don’t know anything about the markets. Or maybe you don’t have the money to hire an expert. This is why successful women use financial technology – or “FinTech” – to streamline their finances.
What is fintech? Where did it stem from? FinTech is an emerging field at the intersection of new technologies and financial service. FinTech companies use new technologies to provide better financial services to consumers and businesses.
While in the past few years, there have been many startups focused on financial technologies, it’s important to know larger companies have FinTech initiatives as well, including JP Morgan, Bank of Ameria and even Apple and Amazon.
The best FinTech tools are smart and super easy to use, so you’ll save tons of time on your finances. Plus, these digital services are free or low cost, available 24/7, and can easily be accessed on your phone or laptop.
If you’re feeling motivated to delve get real about your financial management, you’re going to want to keep scrolling. After some trial and error, I’ve discovered that these are the best money-saving (and money-making) services, hands down.
What is a robo-advisor?
One of the most popular new FinTech categories is “robo-advisors”. A robo-advisor is an online, automated portfolio management service. These are platforms that invest money into stocks and bonds based on your answers to a few questions — like your age, your salary, and how risk-averse you are. The funds you invest are automatically maintained through the software, constantly readjusting and reinvesting depending on how aggressive you want them to be.
Because these companies use computer algorithms — a set of rules to choose appropriate investments based on your risk tolerance and time horizon — they can offer their services for a fraction of the cost of a human financial advisor. That lower-cost management, together with features like automatic portfolio rebalancing and tax-loss harvesting, can translate into higher net returns for investors (e.g. ‘mo money for you).
What’s the Best Robo-Advisor for Women?
For the first time investor, I really believe in robo-advisors and using technology to build really smart portfolios for those people who may feel overwhelmed don’t have the time or expertise to do the research (to figure out risk tolerance and asset allocation and diversification). Ellevest, for example, is a robo-advisor. They provide an online experience to help women like you invest to have the opportunity to live the badass life you want.
Ellevest is great for beginners and seasoned investors alike. It takes away the guesswork by creating a diverse investment portfolio specifically for your goals. A few clicks are all you need to set up an online account. Their website is easy to navigate, transparent, low in fees and the dashboard is filled with beautiful graphs so you can track your savings at a glance.
Investing used to be expensive and complicated; robo advisers like Ellevest are making investing more accessible for everyone. With its $0 account minimum, competitive advisory fees (ranging from 0.25% – 0.5% of assets) and unlimited access to financial advisors (Premium clients can talk to CFPs), Ellevest is an appealing choice for investors of any gender.
Is all that volatility making you afraid to invest? Don’t let it.
Stock Market Returns: A Brief History
How much money does the stock market return? From 1928-2016, the annual return, on average, of the S&P 500 index was 9.5%. You’ve heard us talk about both the importance of keeping expenses low and smart portfolio construction while investing, but there’s another point that takes the cake: If you are not investing at all, you’re missing out on any potential market returns that may improve the finances of Future You. This does not mean that for every single year you invest, you’ll see a 9.5% return. In fact, you may lose money in some years. From 2000-2009, the S&P 500 returned -0.9% (you can mostly thank the dotcom bubble and 2007-2008 financial crisis for that). So you have to be in it for the long haul.
What’s the Best Expense Tracking Tool?
Do you ever wonder where all your money is going? Mint aggregates all your accounts into one place and categorizes your spending. By linking your credit cards to Mint, you’ll know exactly how much you’ve spent on groceries and movies this month without digging through your statements and pulling out your calculator. The platform is available on desktop and mobile, so your budget, spending, and savings are always at your fingertips.
If you’re using a cash envelop system, you should still use FinTech products to track your spending. I’ve tried out a lot of expense tracking apps and MoBills is a top contender. The user interface is so easy to use! The app will even suggest location labels with its Smart Location feature, so it’ll automatically know you spent $195 on kitchenware at Le Creuset.
Group trips are fun but there’s always chaos when trying to figure out who owes what to whom. After my friend Jamie was introduced to Splitwise during her birthday trip, she appropriately proclaimed, “My life has changed for the better.” The mobile app allows everyone to record payments and select who was involved in each activity. Then it does math magic and emails the amounts to everyone at the end of the trip. Just Venmo and you’re done. Do I even need to talk about Venmo? Instant money transfers and emojis. Get on it.
Addressing Security Concerns
You might be wary of giving out your financial information to a digital source. I get nervous too, especially after the Facebook and Equifax debacles. No one can guarantee your data will be safe, but here are 4 ways to increase your data security when using fintech tools.
1. Opt into 2 factor authentication. This means that along with your login password, another form of authentication is required. For some mobile apps, this might include a 4 digit PIN or biometrics such as a fingerprint or facial recognition. For example, the Venmo android app has an option select both “Enable PIN code” and “Use fingerprint” for sign in.
2. Read the privacy terms. If legal mumble jumble is too much, at least do a search (command +F) for the words “third party.” Ellevest, for example, explicitly states, “We never sell or share your personal information with a third party that would market or advertise their products to you.”
3. If you’re going to be sharing your bank information, look for bank-level security and data encryption. Acceptable bank standards is 128 bit SSL encryption. Mint uses 256 bits and controls its own data centers with the utmost security measures.
4. If you’re using a robo advisor, check to see if they are regulated by the SEC and Financial Industry Regulatory Authority. This ensures the company follows strict securities compliances. Robinhood, for example, states they are “a SEC-registered broker-dealer and a member of the Financial Industry Regulatory Authority (FINRA) and the Securities Investor Protection Corporation (SIPC).”
If fintech is still not your thing, consider Stash Wealth. They utilize smart technology but still employ a team of real human advisors. With their affordable human-first approach to financial planning, you don’t have to worry about robots taking over the world.
Though, sometimes, those robots make life a lot easier.
Up next, is how to divvy up your paycheck for financial success.