The 3 Decisions That Will Change Your Financial Life

The 3 Decisions That Will Change Your Financial Life

There’s nothing worse than a rich person who’s chronically angry or unhappy. There’s really no excuse for it, yet I see this phenomenon every day. It results from an extremely unbalanced life, one with too much expectation and not enough appreciation for what’s there.

Without gratitude and appreciation for what you already have, you’ll never know true fulfillment. But how do you cultivate balance in life? What’s the point of achievement if your life has no balance?

For nearly four decades, I’ve had the privilege of coaching people from every walk of life, including some of the most powerful men and women on the planet. I’ve worked with presidents of the United States as well as owners of small businesses.

Across the board, I’ve found that virtually every moment people make three key decisions that dictate the quality of their lives.

If you make these decisions unconsciously, you’ll end up like majority of people who tend to be out of shape physically, exhausted emotionally and often financially stressed. But if you make these decisions consciously, you can literally change the course of your life today.

Decision 1: Carefully choose what to focus on.

At every moment, millions of things compete for your attention. You can focus on things that are happening right here and now or on what you want to create in the future. Or you can focus on the past.

Where focus goes, energy flows. What you focus on and your pattern for doing so shapes your entire life.

Which area do you tend to focus on more: what you have or what’s missing from your life?

I’m sure you think about both sides of this coin. But if you examine your habitual thoughts, what do you tend to spend most of your time dwelling on?

Rather than focusing on what you don’t have and begrudging those who are better off than you financially, perhaps you should acknowledge that you have much to be grateful for and some of it has nothing to do with money. You can be grateful for your health, family, friends, opportunities and mind.

Developing a habit of appreciating what you have can create a new level of emotional well-being and wealth. But the real question is, do you take time to deeply feel grateful with your mind, body, heart and soul? That’s where the joy, happiness and fulfillment can be found.

Consider a second pattern of focus that affects the quality of your life: Do you tend to focus more on what you can control or what you can’t?

If you focus on what you can’t control, you’ll have more stress in life. You can influence many aspects of your life but you usually can’t control them.

When you adopt this pattern of focus, your brain has to make another decision:

Decision 2: Figure out, What does this all mean?

Ultimately, how you feel about your life has nothing to do with the events in it or with your financial condition or what has (or hasn’t) happened to you. The quality of your life is controlled by the meaning you give these things.

Most of the time you may be unaware of the effect of your unconscious mind in assigning meaning to life’s events.

When something happens that disrupts your life (a car accident, a health issue, a job loss), do you tend to think that this is the end or the beginning?

If someone confronts you, is that person insulting you, coaching you or truly caring for you?

Does a devastating problem mean that God is punishing you or challenging you? Or is it possible that this problem is a gift from God?

Your life takes on whatever meaning you give it. With each meaning comes a unique feeling or emotion and the quality of your life involves where you live emotionally.

I always ask during my seminars, “How many of you know someone who is on antidepressants and still depressed?” Typically 85 percent to 90 percent of those assembled raise their hands.

How is this possible? The drugs should make people feel better. It’s true that antidepressants do come with labels warning that suicidal thoughts are a possible side effect.

But no matter how much a person drugs himself, if he constantly focuses on what he can’t control in life and what’s missing, he won’t find it hard to despair. If he adds to that a meaning like “life is not worth living,” that’s an emotional cocktail that no antidepressant can consistently overcome.

Yet if that same person can arrive at a new meaning, a reason to live or a belief that all this was meant to be, then he will be stronger than anything that ever happened to him.

When people shift their habitual focus and meanings, there’s no limit on what life can become. A change of focus and a shift in meaning can literally alter someone’s biochemistry in minutes.

So take control and always remember: Meaning equals emotion and emotion equals life. Choose consciously and wisely. Find an empowering meaning in any event, and wealth in its deepest sense will be yours today.

Once you create a meaning in your mind, it creates an emotion, and that emotion leads to a state for making your third decision:

Decision 3: What will you do?

The actions you take are powerfully shaped by the emotional state you’re in. If you’re angry, you’re going to behave quite differently than if you’re feeling playful or outrageous.

If you want to shape your actions, the fastest way is to change what you focus on and shift the meaning to be something more empowering.

Two people who are angry will behave differently. Some pull back. Others push through.

Some individuals express anger quietly. Others do so loudly or violently. Yet others suppress it only to look for a passive-aggressive opportunity to regain the upper hand or even exact revenge.

Where do these patterns come from? People tend to model their behavior on those they respect, enjoy and love.

The people who frustrated or angered you? You often reject their approaches.

Yet far too often you may find yourself falling back into patterns you witnessed over and over again in your youth and were displeased by.

It’s very useful for you to become aware of your patterns when you are frustrated, angry or sad or feel lonely. You can’t change your patterns if you’re not aware of them.

Now that you’re aware of the power of these three decisions, start looking for role models who are experiencing what you want out of life. I promise you that those who have passionate relationships have a totally different focus and arrive at totally different meanings for the challenges in relationships than people who are constantly bickering or fighting.

It’s not rocket science. If you become aware of the differences in how people approach these three decisions, you’ll have a pathway to help you create a permanent positive change in any area of life.


Why it’s Important to Build a Good Work Culture

Why it’s Important to Build a Good Work Culture

Why it's Important to Build a Good Work Culture

Image credit: Shutterstock.com

When we talk about aspects of what makes an organization a good place to work, the primary factors most of us take into account are brand value of the organization and compensation paid to employees.Most managers and senior professionals intend to believe that these two elements are sufficient to attract talent to their organizations. However, one of the most important things that we often fail to give due importance is the work culture, which often plays a deciding role in retaining and binding people to an organization.

Work culture is an intangible ecosystem that makes some places great to work and other places toxic. In a nutshell, the ideology of an organization is what constitutes its work culture.

It affects or defines the ability of the leadership and employees to relate to each other for the common good of the organization and operate within a mutually agreed and acceptable boundary of cultural values and emotional interface.

It is widely understood that a positive ambience can make or mar your performance, be it school, college or workplace. No matter how talented and smart you are, you can work to the best of your capabilities and creative skills when you are surrounded by an encouraging environment that values human resource.

This is why work culture is so important in bringing out the best from your employees even in adverse circumstances. Negativity not only kills creativity and will to perform but also does not allow an employee to develop a sense of affection and ownership with the organization.

Human beings are fundamentally simple and a positive work environment impacts the way they think, act and reflect.

Here are some to the reason which will answer the above query:

Workplace is where you spend more than one-third of your lives. Naturally, if your employee is happy and content at work, it will reflect in his overall personality and growth as a human being. The collective impact of a good work environment is much more than increased productivity and employee satisfaction. The impact is on the overall personality of people who work for the organization.

Increase loyalists at your workplace

Do your employees wake up every day and look forward to a day of work or do they drag themselves to the workplace counting days to the weekend? Do they feel the same ownership and dedication towards the organization as you do? Only a place that values human resource, treats employees with trust and instills a sense of confidence and cohesion among the workers can achieve the former.

Employee incentives and appraisals might not always be enough to motivate an employee to work for the best outcome for an organization. Sometimes in extremely challenging circumstances when a collective endeavor is required to save the day for the organization, it is the love and affection employees feel towards their workplace that turns out to be a decisive factor.

An organization whose employees have a deep sense of loyalty and ownership towards their workplace is an organization that has a long way to go. . An employee who loves his/her organization will spread the goodwill and will be instrumental in attracting good human resource to the organization.

A key to retention

A study conducted by Dale Carnegie Training a few years back concluded that an alarming 54 percent of Indian employees were somewhat dissatisfied with their jobs, sending out a strong signal that organizations need to initiate  proactive measures to sustain engagement and improve satisfaction.

Contrary to common belief, compensation and appraisals are not the only factors that bind employees to an organization for a longer duration. Whether the employee feels happy and satisfied in his/her work space is another crucial determinant.

A dissatisfied employee who feels haggled by the daily questioning and accusations by seniors, and backbiting by colleagues will be the first one to look out for another job opportunity, even if he/she is being compensated well.

Apart from encouraging seniors and supportive colleagues, other factors that make an organization a good place to work include respect for employees’ private space (that is displayed by a policy of not disturbing them on off days unless absolutely urgent), respecting their right to avail leaves, and encouraging them to take up new challenges and opportunities at work.

Work culture is important for the organization as it directly impacts the ability to attract and retain talent. A positive workplace is reflected in the positive work relationships which exist at the workplace; the concern and genuine care for each other.

A positive workplace will have a higher degree of employee engagement – as employees respond positively and actively to organizational initiatives. A negative work place will be reflected in low energy and detached work environment with employees operating in insulated silos.

Prompt employees to watch each others’ back

Much like a compatible spouse makes your family life happy or dissatisfied, good colleagues make your work life endearing or difficult. While to some extent, the behavior of employees towards each other depends upon their individual nature and characteristics, a lot of it is defined by how the organization shapes them up.

A new employee who enters an organization and watches a culture of cohesion among workers, where all employees helps each other, will automatically imbibe these values in his/her daily life. On the contrary, an organization where back-stabbing and squabbling is the norm, any new employee will adapt to these traits.

A good work culture is one which encourages employees to behave like a family and watch each others’ back. This culture can only be built by pursuing ethical role modeling values and walking the talk.

The onus lies on the leadership as their behavior gets magnified and replicated many times over. Showcasing and rewarding positive behavior reinforces the intended behavior and directly influences the workplace culture.

Attracts talent

A good work culture not only helps retain organization’s human resource, it also helps attract new talent. In today’s connected industry space, it is not difficult to know the internal working environment of any organization – the most vocal and credible ambassadors of the same are current and ex-employees.

A happy employee will spread around the word very effectively and be instrumental in attracting talent to the organization. People today are constantly looking for change and new opportunities in search of a happy, satisfied and balanced work life.


How a Good Credit Score Can Save You More Than $100,000

How a Good Credit Score Can Save You More Than $100,000

We live in a country where a healthy credit score and having the ability to borrow money is seen as one of the biggest accomplishments in personal finance. Even though most of us know the importance of having good credit and reviewing our credit report and score regularly, so many people still have no idea what goes into this mysterious number and how to actually improve it over time.

First thing’s first: Make sure you understand the difference between a credit report and credit score. Your credit report is a huge file about you and your credit history. It includes your personal information, a summary of your financial accounts, if you’ve filed for bankruptcy in the past and any past inquiries made.

Your credit score is your FICO number, which lenders use along with your credit report to determine how risky a borrower you are. Your credit score can range anywhere from 300 to 850, and the higher the score, the better. When you apply for a car loan, student loan, home loan or credit card, your credit score is used by the lender to determine how much they will lend you and what your interest rate will be. The more risky you seem, the lower the limit they’ll give you — and the higher the interest rate they’ll charge.

So now that you understand the difference between your credit report and credit score, let’s review the five factors that go into calculating your credit score.

  1. Payment History. For example: Are you paying your bills on time? This accounts for about 35 percent of your score.
  2. Total Amount Owed. According to Mint.com, you should strive to keep your score healthy by using less than 30 percent of available credit across all your credit cards. This factor accounts for 30 percent of your score.
  3. Length of Credit History. This factor accounts for 15 pecent of your score. Getting an early start on building credit is essential.
  4. New Credit. This includes the number of recently opened accounts and credit inquires you’ve made, for example. It accounts for 10 percent of your score.
  5. Types of Credit Used. Car loans, mortgage and credit cards fall under this category. This accounts for 10percent of your score.

The goal is for your score to be above 760. This means you have excellent credit. If you have credit below 620, you are considered a subprime borrower, or more risky.

How does this all play out in your financial life? Making sure you have good credit is a given. But the difference between high and low credit scores can mean thousands of dollars saved over the course of your lifetime when it comes to borrowing money. Let’s look at an example.

Let’s say you are ready to buy your first home. You work with a mortgage broker to pre-qualify for a $500,000, 30-year fixed home loan. Your credit score is 620, so you get a mortgage loan approved at a 5 percent interest rate. This equates to a monthly mortgage principal and interest payment of about $2,685 per month. Over the course of 30 years, your total principal and interest payments equal $966,600. So on your $500,000 mortgage loan you will pay approximately $466,600 in interest over 30 years.

Now let’s say your credit score is 760, so you get a mortgage loan approved at a 3.5 percent interest rate. This equates to a monthly mortgage principal and interest payment of about $2,245 per month. Over the course of 30 years, your total principal and interest payments will equal $808,200. So on your $500,000 mortgage loan you will pay approximately $308,200 in interest over 30 years.

Just by having the better credit score, you could potentially save $158,400 in interest over the course of 30 years! That’s a lot of money and that’s why having a good credit score is very important.

You want to get in the habit of checking your credit score at least once per year. You can go to sites like www.annualcreditreport.com to access your credit report for free once per year, then pay an additional fee to get your credit score. Other sites, such as www.creditkarma.com will allow you to monitor their version of your credit score, which is similar to your FICO score, for free on a regular basis.

Remember, it’s up to you to take control of your financial future. Start with baby steps and take time to really understand the importance of having a good credit score.


10 Money Habits That Will Help You Get Serious About Prosperity

10 Money Habits That Will Help You Get Serious About Prosperity

Take your financial life to the next level through actions like seeking new income sources, making debts your priority and separating friendship from business.
10 Money Habits That Will Help You Get Serious About Prosperity

Image credit: Shutterstock

The power of habit can be quite interesting. Rather than create 2017 resolutions that may not stick, a good alternative is to develop positive habits this year. Especially when the category is financial life.

So, make it your goal to form new habits that will take your financial life to the next level.

From learning a new skill every day to hitting the gym regularly, habit takes away the one singular thing that prevents us from getting things done — resistance. With good habits, we no longer resist. We just do it.

You can quickly attain financial freedom by positively channeling the power of habit toward how you treat money. But, first, let’s look at the steps to developing new habits.

Author James Clear breaks down habit formation into three steps (the three R’s): reminder (what triggers the behavior); routine (the habit itself) and reward (what you get from this behavior). In order for a habit to stick, it must follow the three R’s rule. By practicing some of the following habits, your reward will be a more financially rewarding lifestyle.

1. Be clear about your financial goals.

One habit you need to develop is clarity toward your goals. Your goals can shape your attitude toward whatever you do and put you in the right perspective about your financial life. Lack of clarity is equivalent to having no goals at all.

“Clarity about your money goals is the first step towards getting your finances right,” Yasir Khan, founder and chief editor at  WealthKept.com, told me. “Getting your finances right — being able to prioritize what you do with your money — can only be achieved by clearing the unnecessary obligations out of the way.”

Developing a habit of being clear about your financial goals will also create a sense of focus, which is the psychological effect of setting goals. Let’s assume your aim is to start your own business this year. You’ll outline how much funding is required to do that, and how much you want to raise yourself.

2. Stop associating guilt with money.

One habit which keeps a person from growing financially is how he or she feels about money. A lot of people feel guilty, which is why they often find it difficult to discuss the financial terms of a business relationship before starting one.

Develop a positive attitude toward money this year by overcoming any guilt you feel about money.

3. Seek more income sources.

The best way to improve your financial life this year is to use your free time to earn an extra income. Start by looking at areas where you can fill a need and earn extra money in the process.

And make converting your spare time into income opportunities a habit. You could freelance for businesses or help people with things they can’t do themselves. Khan said he was able to start two small businesses apart from his main job when he noticed he could use his free time to help others. Now that his side businesses are growing, he hires people to help him run the business.

4. Make clearing your debts a priority.

One of the biggest hindrances to financial growth is debt. The problem is that debt keeps compounding, making it your most expensive liability. Start paying off your debt with each paycheck you earn. By forming this habit, you could become debt-free by the end of 2017.

5. Save to secure your future.

Make saving a habit in 2017. The more you save, the more you’ll have when you retire. JPMorgan Chase puts together an annual guide to retirement that provides investment and savings strategies for all stages of life.

6. Separate friendship from business.

Underscore the purpose of your relationship with others, and make it a habit to always separate money from friendship and friendship from business.

A lot of relationships have gone to ruin because of money. In 2017, be careful when forming business relationships. Make sure you know enough about someone before entering into such a relationship. Use background check tools like Check Them or Check People before a first meeting. Entering into a relationship with the wrong person could be costly or devastating to your financial life.

7. See money as a means, not an end.

Many people get the notion of money very wrong. Because we see money as the end goal, it affects our orientation about it. See money as what it is and what it’s meant to be — a tool, a means to an end. What the end is for every one of us may be different. For most, it might be happiness, while for others it’s simply a comfortable lifestyle.

8. Seek advice from money experts.

Develop a habit of seeking advice before making any major financial decision. This will help you avoid making any decision you’ll end up regretting. When you make a habit of seeking financial advice, you’ll be less likely to take financial risks that could hurt your lifestyle.

9. Decide against impulse buying.

Make it a habit to spend only on things you need. Cut back on impulse buying by weighing your options before making any purchase. When you buy on impulse, you only gain a temporary sense of satisfaction. Once this instant gratification has worn off, what you’re left with is a shrunken purse and a tinge of regret, or buyer’s remorse.

10. Live below your means.

Many wealthy individuals mastered the habit of living below their means, even before they became hugely successful. A lot of wealthy individuals prefer to live a frugal lifestyle.

Going frugal can help you create a financial lifestyle that’s easily manageable. It can leave you with enough money and time to invest into your business and relationship. And that’s what good money habits are all about.


Stop Wasting Money

Stop Wasting Money


Benjamin Franklin once said, “a penny saved is a penny earned.”¹ The modern upgrade to that observation might be that $100 not spent is more like $143.²

One way to find the money to meet your spending or saving needs is to examine your current spending habits and consider eliminating money wasters.

Top Money Wasters

  1. Bargain Shopping … and its Expensive Cousin, Impulse Buying
    Fire sales and impulse buying (such as buying products sold on infomercials) can be money wasters, made worse by how often items purchased this way sit idly in a closet or drawer.
  2. Unused Gym Memberships
    At a monthly rate of $40-50, unused memberships can add up over time. Begin your fitness commitment inexpensively by walking or jogging; you can graduate to the gym once you know you’re going to stick with it.
  3. Cable and Cell
    Call your provider and see if it’s possible to negotiate a new rate. Cell providers, who face stiff competition, may be responsive. Cable companies may be less so, especially if they are a single provider, but you can review your package and make sure you are not paying for service you don’t want.
  4. Paying for Water
    Switching from an essentially free product to one that may cost up to $1.50 a day or more makes for real budget leak. Consider purchasing a reusable container and refilling it during the day.
  5. Gourmet Coffee
    $2 or $3 a day may not seem like a lot of money, but when Americans step into a gourmet coffee shop, they may often buy more than just the coffee. Consider brewing your own coffee. It can be ready before you leave for work, and it’ll save you the wait in the drive-through line!
  6. Eating Out
    Americans now spend more money dining out than they do at the grocery store.³ Consider the cost of going out to lunch twice a week. If you spent $10 each time, it would cost you $1,040 annually. While dining out may be one of life’s pleasures, it is often less about socialization and more about convenience. Twice a week may not seem like much, but over time it can add up.

Saving on Fitness Center Membership Costs

Saving on Fitness Center Membership Costs


The cost of a membership to your local fitness center can be pricey, especially if you are looking for a modern facility with a wide selection of the most current equipment. But there are ways to improve your physical fitness without denting your fiscal fitness.

Ways to Save on a Fitness Center Membership

Don’t Pay List Price—There are ways to save on the quoted fee schedule.

  • Take advantage of free trials. They may be as short as one day or up to 30 days. It will allow you to test the club’s vibe and its members.
  • Search for coupons. Fitness centers may offer coupons that reduce the cost. Visit the fitness center website and “deal of the day” websites to see if coupons are available.
  • Negotiate. Let the manager know you are looking around and the prices you’re being quoted. Ask him or her to make a best offer. Shopping during the slow season or at the end of the month gives you greater leverage.
  • Join with a friend. A fitness center may have special pricing. If they don’t, it’ll certainly increase your negotiating leverage.
  • Exercise during off-peak hours. Some fitness centers, especially the 24-hour ones, may offer discounts for using the facility in off-peak hours.

Get Someone Else to Pay for It—Forward thinking employers recognize that a physically fit employee is likely to be a healthier and more productive worker. Insurance companies also like healthy people since they cost less in medical care. Ask your employer or insurance company if they offer any perks that subsidize memberships, or have any affiliation with centers that offers discounts.

Don’t Buy a Membership—The fact is that many Americans’ resolve to exercise can be ephemeral, leaving them with membership bills that keep coming. To protect against this risk, consider:

  • Buying a month-to-month membership until you’re sure you’re going to stick with it.
  • Starting your new exercise regime by buying an exercise video or walking/running outdoors.

The decision to exercise is always a good one. Now, make the decision that will also be good for your bank account.


Good Health is Good Business

Good Health is Good Business


According to the Centers for Disease Control and Prevention, productivity losses linked to employees not showing up for work cost employers $226 billion annually, or $1,685 per worker.¹ Business owners and managers understand very well the rising cost of health care and the loss of productivity associated with absenteeism and employee disengagement.

Which is why 98% of employers surveyed by Willis Towers Watson, a global advisory firm, say they’re committed to health and productivity improvement in the years ahead.²

Employer efforts are bearing fruit. According to one report, medical costs fell approximately $3.27 for every dollar spent on wellness programs, while absenteeism costs fell about $2.73 for every dollar spent.³

The Profile of a Successful Wellness Program

Tailored: An effective employee wellness program is multifaceted and must reflect the personal needs and interests of a diverse workforce.

Incentives: Incentives, such as rewards and recognition, communicate the employer’s care and support for the program and help drive employee participation.

Measurable: To maintain ongoing support, there should be tracking of the program’s impact.

Common Wellness Program Offerings

The most common employer wellness offerings include smoking cessation, physical activity, mental health, health club membership, and weight management.

Yet 76% of employers agree that their companies are focusing more on overall wellbeing, as opposed to just physical wellbeing. As a result, many are adding other features to their wellness programs, such as social health and financial management.

A Bonus

Good health is as much a social endeavor as it is a personal journey. These programs can often create employee interactions unlikely to occur during the workday, prompting conversations and relations that catalyze new ideas and improve your work culture.


The Financial Literacy Crisis

The Financial Literacy Crisis


Imagine driving a car without a basic understanding of the rules of the road, or even how to operate it. Scary thought.

Yet many Americans are operating their personal finances with only the barest minimum of knowledge. One study found that, when asked five basic questions about finances and the markets, 61% of Americans were unable to answer more than 3 correctly.

The study also found that 18% of Americans routinely spend more than their household income and one-in-five have overdue medical bills.

It has been said that knowledge is power, and if that’s true, then too many Americans lack the power to control their financial futures. Success rarely comes accidentally; it is the culmination of a journey whose first steps are in education.

One of the obstacles to increasing financial knowledge is what has been called the “Lake Wobegon effect,” the idea that we all consider ourselves above average. It is a self-assessment that keeps many from learning as much as they need to. But whatever your knowledge level may be, it should be recognized that an ever-evolving financial landscape puts a premium on continual learning.

There is a wide range of resources for individuals who understand that the more informed they are, the better the decisions they can make.

If you are committed to increasing your financial literacy, a good beginning is never being afraid to ask questions of financial professionals. Another good place to start your self-education is on a U.S. Treasury-sponsored website, which was created for that very purpose.


Personal Finance Tips for Military Families

Personal Finance Tips for Military Families


One survey found that military personnel have higher credit card debt and fewer tangible assets than their civilian counterparts.¹

While the financial situation of military personnel and their families mirrors the general population in many respects, heavy indebtedness and mismanagement of credit cards may be especially acute issues for service members.

Of course, military families face unique challenges, such as deployment to conflict zones, overseas assignments and the constancy of change, making personal finance even more critical.

Money Tips to Consider

  • Take Full Advantage of What’s Available
    • The Thrift Savings Plan is one way to save for retirement and a Roth TSP is now available.
    • The Savings Deposit Program allows eligible personnel serving in designated combat zones to invest up to $10,000 and receive a guaranteed return of 10%.²
    • Saving in a Roth IRA may be a good idea if you receive tax-free combat-zone pay. This allows you to deposit tax-fee income and take tax-free qualified withdrawals in retirement.³
    • The Post-9/11 GI Bill covers the full cost of in-state tuition, up to 36 months.
    • Servicemembers’ Group Life Insurance protects your family with low-cost life insurance.4
  • Set Goals—Like any mission, success begins with articulating goals you want to pursue.
  • Establish a Budget—A budget provides the financial discipline that may help you control spending impulses that can lead to greater debt levels.
  • Pay Yourself First—Determine how much money you need to set aside to reach your savings goal, deduct this amount from your paycheck, and attempt to live within the limits of what remains.
  • Establish an Emergency Fund—Uncertainty marks the life of military families, so be sure you have an emergency fund that allows you to be as prepared as possible for these changes.
  • Control Your Debt—Indebtedness is one of the enemies of financial independence.

As you think through your financial goals, remember, taking action today is your first and most important step.


What to Look for in Personal Finance Apps

What to Look for in Personal Finance Apps


Compound Interest Chart With Alarm Clock

Since Apple launched its iPhone App Store in July 2008, the mobile applications market has exploded.

In 2016, Statista reported that Apple customers had downloaded 130 billion apps. On the other side of the smart phone universe, Android users have downloaded 65 billion apps since the Google Play launch in 2010.1

To put those numbers in perspective, that’s over 26 apps downloaded for every person on the planet.2

While many of these apps are games and social media programs, an increasing number have been developed to help individuals with their personal finances. Which leads to an interesting question: what should you look for in a personal finance app?

Tip: Like any good tool, apps are as useful as you make them. An app may be able to help with financial decisions and transactions, but it won’t get you to stick to a budget.


One of the first things to consider is what type of financial apps may be most useful. Bankrate.com breaks them into four categories:

Budget tracking apps allow users to record expenditures as they are made to keep track of bank balances and budget categories. Some allow users to make a budget and then watch how closely expenditures are tracking to it.

Financial assistant apps collect, store, and report information from users’ various savings and investment accounts, providing a single place to keep track of asset performance.

Loan calculator apps estimate payments and current balances for loans. Some also track how long it will take to pay off one or more loans.

Spending and saving apps allow users to perform a wide-range of activities, including “what if” scenarios.

Fast Fact: By 2017, one-third of the world’s population will own a smartphone. That amounts to almost 2.6 billion users worldwide.
Source: Statista.com, 2015


Once a user has decided on a category of app that may be useful, there are additional criteria to consider.

Credibility. As everyone knows, not everything written on the internet is true. For example, The Wall Street Journal and The New York Times are generally considered more credible than an anonymous blog. The same principle applies to apps: understand who’s providing the information.

Security. Before using any financial app, read the privacy or security statement. This can typically be found at the bottom of the company’s web page or in the About section of their website. If you don’t find one online, contact the company to request a copy.

Clarity. A personal finance app should provide information that is easy to understand. There are some apps that provide detailed charts on stock performance using a wide variety of financial analyses. However, if you don’t understand the underlying analysis, the app may be useless.

Relevance. Remember the old saying: “If the only tool you have is a hammer, you tend to see every problem as a nail.”3 The same applies to financial information. A mutual fund company may be a great source of information about mutual funds, but it may be less useful at providing information about estate planning.

Using an app to help with your personal finances may be a great first step in becoming a better money manager. And asking yourself a few key questions before you download may help you select the app that best fits your personal finance needs.