A survey released today by Javelin Strategy & Research, which serves financial institutions, found in August that nearly one in five Americans doesn't monitor or manage their personal finances. That rate is double what it was just a year ago. Despite the fact the recession has made it more important than ever to carefully track our money, when it comes to personal finances, 19% of Americans stuck their head in the sand. A year before, another survey had the figure at just 8%.

More anxiety-induced news: The percentage of Americans who say they sometimes log onto their checking account balances with their banks' websites dropped to 46%, down 13 points from 59% a year ago. Even those who track their money by pen and paper dropped, from 50% to 46%.

"It's a natural human reaction to stress: 'Maybe if I don't look at it, it will go away.'" explains the study's co-author, senior analyst Mark Schwanhausser. "I think you have fewer people checking their finances online because they don't like what they're seeing. 'I'm going to be a financial sleepwalker. I'm not going to look.'"

Schwanhausser's prescription for the problem involves convincing America's major financial institutions that they're doing a lousy job helping make it easier and less stressful for their customers to track their money. "It's not enough to tell you how to fix the toilet," he says. "You've got to have the wrench."

Yet despite the fact that most Americans' money resides at a bank, few banks are interested in furnishing financial planning tools. Right now, Schwanhausser argues, most people are required to log into a wide variety of websites to track their money. For example, 75% of Americans who have a credit card get it from somewhere other than their primary bank, meaning their finances are scattered across many websites, unreconciled.

When people do turn to their bank's websites, he argues, the financial planning tools are nearly non-existent despite the fact our society increasingly demands greater personal control through technology. "Today's online banking is like having avocado green appliances from the 1970s. It just doesn't cut it," says Schwanhausser.

Schwanhausser is using the survey to convince banks that it will actually endear customers to them if they put personal finance tools front and center on their sites, helping customers paint a clear picture of their own financial habits. He's pressing them to develop systems, both on the Web and through mobile apps, that can draw in customers' information from other sites, such as credit cards and mortgage lenders, so financial care-taking can be a one-stop process.

So far, banks and lenders have been slow to use existing technology to make money management a less daunting chore. Part of the issue is that many banks don't want to acknowledge competitors by drawing in account balances from elsewhere. Banks also stand to make money off poor financial planning through penalties and fees. Like a doctor who makes money off treating disease, promoting financial good health does not on the surface appear to be in a bank's best interest.

"You can't manage what you don't measure," says Schwanhausser. "And if the bank's not going to provide it for you, you have to go get it in other places."

He recommends existing aggregators such as Mint.com, which pulls your data from multiple sources and lays it out in spreadsheets and in spending plans, as a model for what all the banks should be doing for their customers.

He also notes that Bank of America's "My Portfolio" and Wells Fargo's "My Savings Plan" are two fledgling, if little-known, bank-created features that are slowly reaching toward the sort of comprehensive personal finance planning features he advocates.

As long as it remains difficult or scary, though, when it comes to their finances, Americans will remain more likely to use the Ostrich Method.

Automate Your Finances to Spend Less Time Managing Your Accounts

Despite how simple the process can be, most of us are terrible at saving and paying bills. Here's a strategy to effectively automate most of your finances to keep you saving and out of late fee trouble.

Ramit Sethi of I Will Teach You To Be Rich.com has put together a system for managing your personal finances that only takes about an hour of your time each week. The video above fully explains the process in detail, but here's the gist. First, you want to set up your bills and other payments so they're all happening on the day you get your first paycheck of the month (the first of the month for most people). Once you have that in place, you want to set up automatic savings plans (Sethi suggests using Ing Direct) with sub-savings accounts that let you organize your savings into specific categories (vacation, wedding, etc.). You'll also want to send a percentage of your paycheck to your 401k, and have all of this happen immediately so that the money you see when you get paid is the money left when everything has already been saved. From there, you automatically pay as many bills as you can with your credit card (and then pay the credit card bill on pay day). For the bills you can't pay with your credit card (like rent, in most cases), you can use your online banking to automatically issue a check. This will leave a little money leftover in your checking account that you can use to budget for guilt-free spending and cash withdrawals.

As someone who's often fallen victim to the faults of automatic payments systems (despite frequently using them), definitely do not forget to stay on top of your bills nonetheless. Make sure you set some time aside at least once a month to do a little maintenance and make sure there are no bugs causing your automated finance system to break down. Sethi isn't suggesting a set-it-and-forget-it automated finance system by any means, but as someone who hates paying bills I know how easy it can be to procrastinate and ignore the task. If you set up a good automated system like this one, you'll be at a point where all you have to do is watch and fix the occasional problem as the most important things are being taken care of for you.

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Facebook Profile Changes: More Media Play Than News?

Facebook sure has arrived when it comes to the traditional media set as it used 60 Minutes (in more ways ...

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A survey released today by Javelin Strategy & Research, which serves financial institutions, found in August that nearly one in five Americans doesn't monitor or manage their personal finances. That rate is double what it was just a year ago. Despite the fact the recession has made it more important than ever to carefully track our money, when it comes to personal finances, 19% of Americans stuck their head in the sand. A year before, another survey had the figure at just 8%.

More anxiety-induced news: The percentage of Americans who say they sometimes log onto their checking account balances with their banks' websites dropped to 46%, down 13 points from 59% a year ago. Even those who track their money by pen and paper dropped, from 50% to 46%.

"It's a natural human reaction to stress: 'Maybe if I don't look at it, it will go away.'" explains the study's co-author, senior analyst Mark Schwanhausser. "I think you have fewer people checking their finances online because they don't like what they're seeing. 'I'm going to be a financial sleepwalker. I'm not going to look.'"

Schwanhausser's prescription for the problem involves convincing America's major financial institutions that they're doing a lousy job helping make it easier and less stressful for their customers to track their money. "It's not enough to tell you how to fix the toilet," he says. "You've got to have the wrench."

Yet despite the fact that most Americans' money resides at a bank, few banks are interested in furnishing financial planning tools. Right now, Schwanhausser argues, most people are required to log into a wide variety of websites to track their money. For example, 75% of Americans who have a credit card get it from somewhere other than their primary bank, meaning their finances are scattered across many websites, unreconciled.

When people do turn to their bank's websites, he argues, the financial planning tools are nearly non-existent despite the fact our society increasingly demands greater personal control through technology. "Today's online banking is like having avocado green appliances from the 1970s. It just doesn't cut it," says Schwanhausser.

Schwanhausser is using the survey to convince banks that it will actually endear customers to them if they put personal finance tools front and center on their sites, helping customers paint a clear picture of their own financial habits. He's pressing them to develop systems, both on the Web and through mobile apps, that can draw in customers' information from other sites, such as credit cards and mortgage lenders, so financial care-taking can be a one-stop process.

So far, banks and lenders have been slow to use existing technology to make money management a less daunting chore. Part of the issue is that many banks don't want to acknowledge competitors by drawing in account balances from elsewhere. Banks also stand to make money off poor financial planning through penalties and fees. Like a doctor who makes money off treating disease, promoting financial good health does not on the surface appear to be in a bank's best interest.

"You can't manage what you don't measure," says Schwanhausser. "And if the bank's not going to provide it for you, you have to go get it in other places."

He recommends existing aggregators such as Mint.com, which pulls your data from multiple sources and lays it out in spreadsheets and in spending plans, as a model for what all the banks should be doing for their customers.

He also notes that Bank of America's "My Portfolio" and Wells Fargo's "My Savings Plan" are two fledgling, if little-known, bank-created features that are slowly reaching toward the sort of comprehensive personal finance planning features he advocates.

As long as it remains difficult or scary, though, when it comes to their finances, Americans will remain more likely to use the Ostrich Method.

Automate Your Finances to Spend Less Time Managing Your Accounts

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Facebook Profile Changes: More Media Play Than News?

Facebook sure has arrived when it comes to the traditional media set as it used 60 Minutes (in more ways ...

Small Business News: The Small Business Samba

From the slow dance Republicans and Democrats have been doing in Washington the last few weeks over tax cuts and jobless benefit extensions approved earlier.

Scripting News: My JSON River of News

advertising enlargement

Facebook Profile Changes: More Media Play Than News?

Facebook sure has arrived when it comes to the traditional media set as it used 60 Minutes (in more ways ...

Small Business News: The Small Business Samba

From the slow dance Republicans and Democrats have been doing in Washington the last few weeks over tax cuts and jobless benefit extensions approved earlier.

Scripting News: My JSON River of News

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Facebook Profile Changes: More Media Play Than News?

Facebook sure has arrived when it comes to the traditional media set as it used 60 Minutes (in more ways ...

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Scripting News: My JSON River of News

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Facebook Profile Changes: More Media Play Than News?

Facebook sure has arrived when it comes to the traditional media set as it used 60 Minutes (in more ways ...

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From the slow dance Republicans and Democrats have been doing in Washington the last few weeks over tax cuts and jobless benefit extensions approved earlier.

Scripting News: My JSON River of News

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Facebook Profile Changes: More Media Play Than News?

Facebook sure has arrived when it comes to the traditional media set as it used 60 Minutes (in more ways ...

Small Business News: The Small Business Samba

From the slow dance Republicans and Democrats have been doing in Washington the last few weeks over tax cuts and jobless benefit extensions approved earlier.

Scripting News: My JSON River of News

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Facebook Profile Changes: More Media Play Than News?

Facebook sure has arrived when it comes to the traditional media set as it used 60 Minutes (in more ways ...

Small Business News: The Small Business Samba

From the slow dance Republicans and Democrats have been doing in Washington the last few weeks over tax cuts and jobless benefit extensions approved earlier.

Scripting News: My JSON River of News

view company's website

A survey released today by Javelin Strategy & Research, which serves financial institutions, found in August that nearly one in five Americans doesn't monitor or manage their personal finances. That rate is double what it was just a year ago. Despite the fact the recession has made it more important than ever to carefully track our money, when it comes to personal finances, 19% of Americans stuck their head in the sand. A year before, another survey had the figure at just 8%.

More anxiety-induced news: The percentage of Americans who say they sometimes log onto their checking account balances with their banks' websites dropped to 46%, down 13 points from 59% a year ago. Even those who track their money by pen and paper dropped, from 50% to 46%.

"It's a natural human reaction to stress: 'Maybe if I don't look at it, it will go away.'" explains the study's co-author, senior analyst Mark Schwanhausser. "I think you have fewer people checking their finances online because they don't like what they're seeing. 'I'm going to be a financial sleepwalker. I'm not going to look.'"

Schwanhausser's prescription for the problem involves convincing America's major financial institutions that they're doing a lousy job helping make it easier and less stressful for their customers to track their money. "It's not enough to tell you how to fix the toilet," he says. "You've got to have the wrench."

Yet despite the fact that most Americans' money resides at a bank, few banks are interested in furnishing financial planning tools. Right now, Schwanhausser argues, most people are required to log into a wide variety of websites to track their money. For example, 75% of Americans who have a credit card get it from somewhere other than their primary bank, meaning their finances are scattered across many websites, unreconciled.

When people do turn to their bank's websites, he argues, the financial planning tools are nearly non-existent despite the fact our society increasingly demands greater personal control through technology. "Today's online banking is like having avocado green appliances from the 1970s. It just doesn't cut it," says Schwanhausser.

Schwanhausser is using the survey to convince banks that it will actually endear customers to them if they put personal finance tools front and center on their sites, helping customers paint a clear picture of their own financial habits. He's pressing them to develop systems, both on the Web and through mobile apps, that can draw in customers' information from other sites, such as credit cards and mortgage lenders, so financial care-taking can be a one-stop process.

So far, banks and lenders have been slow to use existing technology to make money management a less daunting chore. Part of the issue is that many banks don't want to acknowledge competitors by drawing in account balances from elsewhere. Banks also stand to make money off poor financial planning through penalties and fees. Like a doctor who makes money off treating disease, promoting financial good health does not on the surface appear to be in a bank's best interest.

"You can't manage what you don't measure," says Schwanhausser. "And if the bank's not going to provide it for you, you have to go get it in other places."

He recommends existing aggregators such as Mint.com, which pulls your data from multiple sources and lays it out in spreadsheets and in spending plans, as a model for what all the banks should be doing for their customers.

He also notes that Bank of America's "My Portfolio" and Wells Fargo's "My Savings Plan" are two fledgling, if little-known, bank-created features that are slowly reaching toward the sort of comprehensive personal finance planning features he advocates.

As long as it remains difficult or scary, though, when it comes to their finances, Americans will remain more likely to use the Ostrich Method.

Automate Your Finances to Spend Less Time Managing Your Accounts

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Tuesday, December 7, 2010

managing personal finances

Automate Your Finances to Spend Less Time Managing Your Accounts

Automate Your Finances to Spend Less Time Managing Your Accounts

Automate Your Finances to Spend Less Time Managing Your Accounts

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