Personal Finance Blog | Money Management Blog | Financial Help

I was sitting in a meeting last month when someone was giving a presentation on family finances and since I’m the kind of guy who has a hard time concentrating on numbers (they read more like Egyptian hieroglyphs to me) I started to zone out pretty quickly. In fact, if I recall, the presentation lasted about 15 minutes and I probably daydreamed right through it.

Then, towards the end, the presenter said a line that caught my interest: “smart families don’t pay interest—they earn it.” I’m not sure why it struck me, but it did. After all, my finances are in poor condition (remember, I’m the new guy here at Finicity) and I’m always worried about how much interest I’m paying on the various credit cards, department store cards, consumer credit accounts and so forth. However, I’m rarely worried enough to do anything about it because, again, numbers scare me.

But this saying: “smart families don’t pay interest—they earn it” challenged my self-perception. I thought to myself, “hey! I’m smart! I know lots of stuff about lots of things! I have multiple college degrees! How dare you say that I’m not smart because I pay interest!” Then, of course, the reasonable side of me kicked in and I evaluated the statement and came to a startling realization—I pay lots of interest and that is not one of the smarter things I’ve chosen to do in my life.

So, I started thinking about that statement: “smart families don’t pay interest—they earn it” and there started to be a paradigm shift in my head. Instead of ignoring my financial problem (which, let’s face it, I can do with skilled ease these days) I was going to have to attack it. More importantly, I couldn’t face the problem like I had in the past—with haphazard and inconsistent tracking of my expenses. I needed something that would allow me to set up a plan and stick to it. In other words, a real, live, honest-to-goodness, adult budget.

That thought scared me. I started to get bogged down in thoughts like how much time it was going to take and how boring it would be (remember: numbers are not my thing) but then I remembered the saying: “smart families don’t pay interest—they earn it” and I made a decision.

Rather than trying to take control of my finances in one fell swoop, I decided to start small, and for me, that means paying off one credit card. To start, I did a simple run down of my income and my necessary expenditures, looked at how much I had left and decided that I would allocate enough money each month to double my minimum payment on one credit card.

Having set that up, I felt better about my situation. Next month, I’ll get brave and see if I can up the amount I’m paying to the card in order to pay it off faster. In other words, I’m starting out small with my budget, and I’m feeling much more successful managing my finances. You might even go so far as to say I feel a little bit smarter today.

Andrew Parker, Marketing

We’re excited that Nicholas Thomas (Finicity co-founder and COO) will be speaking tomorrow at AJAXWorld in San Jose, CA about the future of Internet Software Services.

Here are some excerpts from his presentation.

Mark Wieser, former Chief Scientist at Xerox PARC, envisioned a world where computers provided services to us but did not command our full attention to derive value from them. He fathered the concept of a third era of computing following the Mainframe and PC eras called the Ubiquitous Computing era, where computers were invisible, everywhere, and with us in the real world. The good news? We have finally arrived in that era. The bad news? Internet Software Services need to do more to match Marks original vision.

Many software services on the Internet leverage advertising to generate revenue, but this business model requires its users to be glued to the computer screen to see and click through to other offered products or services. Premium Internet Software Services seeking to become truly ubicomp must free their users from the tyrannical attention-hogging PC-era and present just-in-time information (JITI) to their customers without the burden of clickthrough rates.

Because Fincity’s business model is subscription-based, the company can and is developing ubicomp solutions to enable its users with just the financial information they need at the time and place they need it most … when making the spending decision. Although after-the-fact reporting is helpful to analyze spending trends and past mistakes, Finicity seeks to give our customers the information they need at the point where the spending decision is made.

Finicity pioneered Rich Internet Applications with its first AJAX and WAP clients in 2004 and our Adobe FLEX client in 2006. We are now announcing the development of a new Adobe AIR client for PC, MAC, and Linux that will provide our customers with information they need at a glance without launching a browser. In addition, we are are exploring other ways to provide users with their personal financial information outside of company-developed software clients.

Cheers,

The Finicity Team

I love this quote above. I don’t know who coined it, but it is a principle that is coming to the forefront of Americans today.

A couple of months ago, I had a mournful experience. My mountain bike of 21 years finally gave way. At $325 in 1987, this bike had served me well! It tread thousands of miles, including miles and miles of mountain terrain and twice across international boarders. I have ridden it up hills and sometime it rode me down hills.

I suspect that only about 60% of my bike was still original. I’d budgeted spending for repairs and even created a spending plan in my budget to put aside cash every month to save for and purchase some nice upgrades. I can still remember the day back in ’92 when I put that new Deor XT Rear derailleur on my bike.

Recently, I found myself in a most regrettable situation. I thought I could make Bridgestone last another few years, so I had not created a budget to replace it. Being a user of Mvelopes (now Finicity Money Manger) for over 6 years, I should have had more foresight. I guess I was in denial because I like to squeeze every last drop out of everything (except brussel sprouts…but that is another story) and I was sure I had time to set up my budget for a future purchase (Mvelopes is perfect for this).

My family, unbeknownst to me, had been preparing for this day. The members of my family had been setting cash aside in their individual budgets for a bike for me. After my family convinced me it was okay and after some research and nearly 2 months in peak riding time without a bike, I found my bike.

Well, I am a saver through and through. Not only did we pick up a good quality bike on sale (21% of retail—fall is a great time to get a deal on a bike), but we were able to use some accumulated points from a Visa rewards program that allowed us to pick up the bike at no cost. I am planning and hoping for another 20+ year ride. Best of all, my wife and kids were able to keep and reallocate the cash they had saved to something else.

We are living in times where we have to find a way to make our cash go further. Don’t be embarrassed if you don’t have the newest car or the trendiest clothes (I don’t). There is so much more comfort and peace knowing you are living within your means than trying to impress a neighbor, friend, or worse, someone you don’t even know!

Personal cash flow management is core to living within our means. Part of personally managing cash is also finding ways to extend the life of the things we use and need. We likely need to take a hard look at our definition of needs and wants, and likely have to do without some of the wants. The price for financial peace is worth it! Although I was tempted by some really nice (rather expense) bikes, I knew that a bike was definitely a want for me. Balanced against needs and financial goals, the decision was an easy one.
Use it up, wear it out, make it do, or do without!

Warren Rosner, Accounting

It’s inevitable – my siblings are starting to think about the holidays looming ahead and have started the annual frantic discussion about how to reduce the expense of buying gifts for our ever-increasing family. It happens every single year . . . although, I admit, it does seem to come a little earlier each year. They see the holiday decorations starting to pop up in the stores and they each go into a panic about how to afford presents for their own children, let alone the nieces, nephews and grandparents. The ironic thing – my family really isn’t very big, but we do seem to increase by a little bit each year. I have a total of 6 nieces and nephews, not really that daunting of a group, in my opinion. However, if you don’t plan ahead for your holiday spending, it can seem a bit overwhelming.

I used to join in their panic . . . asking if we could trade names instead of buying gifts for everyone, throwing out the idea of setting spending limits, etc. The holidays would sneak up on me each and every year - I never seemed to have any money for gifts. It caused me a ton of stress and frankly made me dread the holiday season!

Not any more! Now I just smile to myself knowingly, listen to their conversations, and say that I will go along with whatever works for all of them. It’s not that I have any more money than I used to, in fact, it’s probably the opposite! My expenses have increased along with everyone else’s – gas, groceries, utilities, etc. I just plan better now! I set a little aside each month for holiday spending (based on the total that I plan to spend) and I have a set budget for how much I will spend on each child, parent, etc. Whether my siblings decide to trade names, set limits, or buy for everyone, I can make these adjustments easily from within the total amount that I already have set aside in my holiday spending envelope. And if I end up spending less – which would be great – then I just save that money and look at it as being ahead of the curve for next year!

Jennifer Streiff, Business Development

I’ve got a great job. I get to try to break things and find faults in the work of others and when I find these things I get to tell them all about how their code doesn’t work like it should. It’s very fulfilling.

Along with the great job I get a not so nice commute. I average 70 miles a day. This helps to keep my ego in check. Kinda like the “With great power comes great responsibility” line from Spiderman except that in my case I think it would be “With a great job comes great pain in the wallet”. The gas price increases over the past year have really added up and taken a bigger chunk of my budget, and I hate spending money on gas when I could spend that same money to buy tools for my woodshop.

So not being willing to find a job closer to home and needing to reduce fuel expenditures, I started researching things I could try to increase my fuel efficiency. Obviously, by increasing my miles per gallon I decrease my fuel consumption which then decreases my fuel budget requirements. This is what I have found so far:

• Slow down - The first thing I found was lowering my traveling speed. I used to average 75mph on the freeway. I’ve lowered that to 63mph. Sure it takes a little bit longer to get to work, but only a couple minutes, and if I leave 10 minutes earlier I still get to the office about the same time.

• Be cool and smooth – Don’t punch the gas when the light turns green, accelerate smoothly and slowly. Also, try to coast to a stop at red lights.

• Stay pumped up - I’ve also started checking my tire pressure every Saturday. This isn’t as much a benefit as driving slower but when you drive 20,000 miles a year just to and from work, every little bit helps. On top of helping with mileage, this step also helped to validate to my wife the purchase of an air compressor I had been wanting.

• Get some fresh air – When driving around town roll your window down instead of using the AC. When you hit the freeway, roll that window up and partake of the air conditioned goodness. At slower around-town speeds, you’re better with the window down. On the freeway, with the extra drag created by the open window, you’re better off to add a bit of strain on the engine and get the AC going.

• Dietary supplements – I’ve also been experimenting with different fuel additives that are supposed to increase the vaporization of fuel in your cylinders to get a cleaner, more efficient burn. I won’t say what I’ve been using in case it ruins my engine, but I’ve been able to gain another 10-12% mpg this way - while only spending about $4.00 for every 150 gallons of fuel treated.

Following these tips, I’ve been able to go from an average of 29.5 mpg to 37.2. Spend a few minutes on Google. There are lots of tips out there that can really add up to more gas in your tank and more money in your wallet.

Jeremiah Rodriguez, Software Quality Assurance

When my wife and I were married, neither of us had ever created or used a budget or even balanced a checkbook, for that matter. We were both, as Dave Ramsey says, “Free Spirits.” When I joined Finicity, over three years ago, I was very impressed with and excited about our flagship product, the Money Manager (formerly Mvelopes). So I quickly became the “Nerd” in our marriage, when it came to finances, kind of by default. It is crazy to think about how far we have come in that amount of time. Everyone wants a quick fix, that magic pill that will make all of their problems disappear into the ether. But the truth is, no matter what your problems are, or whatever it is you want to change in your life, it’s NOT going to be resolved immediately or happen overnight. Change takes discipline and continuous effort. I like the way Ramsey puts it—change is a “process” not an “event.”

Don’t get me wrong, we still have a long way to go in building our wealth, but we have made a lot of changes along the way. One of the things I was hoping would change in this process was my wife asking me (more…)

Take a moment and ask yourself, “How do I define financial success?”

We ran a survey on our site for a few weeks asking this same question and the overwhelming majority defined success as follows: not having to worry about money. This caught my attention…

Growing up, my assumption was if you have more money, you’re happier and you don’t have to worry about money as much. But I know people who are very wealthy who seem to be worrying about money all the time. And I know people who do not have a lot of money who seem to be constantly worrying about money.

I’ve learned that the amount of money someone has doesn’t determine the level to which he or she worries about money.  It’s really based on being in control of the money you currently have and then being able to reach short- and long-term financial goals. The hard part is just determining what those financial goals should be.

Here are the other answers that were available in the survey:

• Being out of debt
• Having 90 days of extra money in the bank
• Being able to retire early
• Having a million dollars in the bank

What’s your definition of success? Please share.

Cheers,

Corey Davis, Marketing

Recently I read a post on Laura Rowley’s Money and Happiness Blog about losing weight and getting rich. Since I am hoping to do both of those things, I thought I would try out the theory of creating a “Diet Diary.” The diet diary is supposed to help you be more aware of what you are eating. The same goes with your finances - the more aware you are of where your money is going, the more likely you are to save, invest, pay off debt, etc.

So, here is what I want to know – in addition to helping me lose weight, will recording everything that I eat also help me reduce my spending? I think that it just might! I already realized very quickly that paying $1.06 for a 32 oz coke was not only costing me 4 times the amount I pay for a can of Coke (which is $.25 if I buy a 12 pack on sale), but it’s also more than double the calories! Obvious, I know since it’s 32 oz compared to 12 oz, but I just hadn’t ever really thought about it until I saw it written down in my diet diary. So, here is what I started doing… if I plan to be in my car for a large portion of the day, I pack a little cooler with cans from home. I find that I usually drink a 12 oz can in the same amount of time that I would have, in the past, had the 32 oz fountain drink. I quickly and easily reduced my calories and my spending.

Of course, saving $.81 on Coke isn’t going to make me rich, but as they say, “every little bit adds up!” I wonder where else I will find an easy solution for cutting back on both money and calories. Do any of you have any suggestions?

Jennifer Streiff, Business Development

We’re excited to announce the new Finicity site (www.finicity.com) is officially live as of this morning. It’s been a fun journey over the past few months getting our social money management site ready for primetime.

It all started when we emailed you (our customers) a survey asking what you wanted, here’s what you told us:

First, you were interested in having personal finance experts on the site to provide articles and tips. So we’re excited to announce Laura Rowley (Yahoo! Finance columnist and well-known author) as our first expert on Finicity. Laura has a great approach to finances and to life, so we’re glad to have her on board. We’ll be announcing new experts very soon so stay tuned.

Second, you told us you wanted an online community where you could connect with other users, share success stories, offer advice and tips, and read more information on personal finance. We hope what we’ve added is a good start (support groups, user forums, money tips, money mistakes, etc.).

Third, you told us you wanted a Mentor program (experienced users helping other users). As we’ve been putting together this program, I’ve been impressed by your willingness to volunteer and help others reach their financial goals. I think this is one of the things that makes Finicity so unique…your willingness to help and support each other. When you think about reaching any goal in life, you need the right tool(s) and support system (whether it’s a coach, a mentor, a team, a support group, a friend, etc.). That is what makes what we’re doing together so powerful…so thank you and enjoy the new site!

Corey Davis, Marketing