The increasing awareness of the need for better financial planning has brought with it a steady rise of financial planning tools. Financial planning tools are created with the sole purpose of planning and controlling your financial assets in a way that benefits you in the long run.
The designing advanced financial software tools that help in appropriating
investments and controlling expenditures technology has also played a great role in the rise of financial planning tools. With the rise, many financial companies, financial planners, and individuals have adopted most of these tools in order to better regulate and control finances.
This article will highlight everything you need to know about financial planning tools and if you should employ them in managing your financial assets.
Table of contents
What Are Financial Planning Tools?
Financial planning tools are the various instruments that are applied in your finances in order to meet your future financial goal. Financial planning tools are not just employed alone but work together with an efficient financial plan in order to attain desired results.
These tools have the capability to compare various investments ideas and provide data in a way that is easy for you to understand, they can provide historical data about specific goods allowing you to backtest the data before making decisions. They also control your financial spending by creating a good financial budget.
Most of these financial planning tools come in various models with various ranges of features, some of these models are not complex hence enabling both a beginner with no prior knowledge of financial planning and an experienced financial planner to make use of them. Some of the financial planning tools are also based solely on professional financial advisors and financial companies an example is the well-known “MoneyGuidePro”.
Why Should I Use Financial Planning Tools?
You might be wondering if you should employ a financial planning tool. Is it really worth it? There are thoughts that might be going through your mind. Financial planning tools are useful in managing your finances especially when you are planning towards achieving a specific financial goal. Financial planning tools can offer a great improvement to your finances in two ways which are
- The first is wealth growing
- Wealth protection
Wealth growing financial planning tools enables you to grow and increase your money as time goes by. These tools are employed when you want your money to be invested and yield interest over a specific amount of time.
Before opting to use a wealth growing financial tool you need to have an in-depth knowledge of risk and reward. Despite the idea of a tool that would help you double your finances sounding good to the ear, you should always remember that a higher reward requires a higher risk hence the possibility of losing your finances in the process of trying to make more.
Wealth growing financial planning tools like equity-based VUL life insurance
require a higher risk amount.
The wealth protecting financial planning tools have the main goal of serving as an alternate means of providing financial support in the scenario of an unexpected event like accident, illness, or death especially when involving the sole provider of income in the family, society, or a business.
Most experienced financial planning analysts use wealth protection financial tools together with wealth growing tools in order to boost the financial state of clients in the firm.
READ ALSO: Top 10 Wrong Concepts About Wealth
What Are The Best Financial Planning Tools?
Before making a decision on which financial planning tool to use in your finances it is advisable to write down your future financial goals in order to make sure the financial tools align with your long-term goals and needs.
There are various financial planning tools you can employ to better manage your financial life; this section will highlight various financial planning tools and their main uses.
1. Intuit Mint
Founded by Aaron Patzer in ‘2006’ this financial planning tool “mint” is one of the well-known finance tools used. This free financial tool is well known for helping you to slow down on your spending by showing you where all your money goes. Mint enables you to connect all your financial assets and investments to one account in order to enable you see your financial picture.
This financial planning tool enables you to kickstart that saving process you have always postponed. It achieves this by categorizing your transaction and
creating a suggested budget which you can adjust, this budget is meant to be adhered strictly to in your finances.
The various financial help Intuit Mint renders include:
- Shows and easy to understand informative graphic of your finances.
- Helps you in monitoring your credit score.
- Links all your financial accounts into one.
- Tracks performance of your investments and sends a notification whenever it suspects a suspicious activity.
- Helps in money management by creating a budget for you and tracking your overall spending.
- Reminds you of outstanding bills to pay for.
Related Post: Mint vs Quicken Reviews: Which Is Worth Your Time?
2. You need a budget (YNAB)
With a spot on the “Forbes Advisor Best budgeting apps of 2021” American multi-platform personal budgeting software “You need a budget” is one of the most acclaimed financial planning tools. This financial planning tool enables you to budget your finances in a way that is not actually restricting.
It helps and supports its users to spend in a smart way. YNAB offers similar services as the intuit mint financial planning tool but what makes it stand out is its educative approach.
Through their weekly workshop, podcasts and articles, the YNAB finance tool teaches its users how to manage their finance properly and get out of debt. The YNAB integrates a take-charge approach in your finances in order to get you interested in financial planning.
The Robo Advisor finance planning tool has fused the quote “The time is now” literally into its features by making financial investments so easy and without a minimum amount. This finance tool will analyze every purchase made on any of the linked accounts and round it up to the nearest dollar, it then invests the balance into your investment account.
Acorns implements five main saving and investing schemes:
Acorn invest: This feature enables you to invest your money into ETF’s I.e., Exchange Traded Funds which have been chosen specifically for you based on your risk tolerance and your financial goal. This investment account allows you to invest a very little amount (as low as 5$) while building your portfolio.
Acorns later: This functions as a tax-advantaged individual retirement account. It serves as a long-term investment toward achieving a specific goal. This feature is exempted from any form of taxation.
Acorns spend: This feature enables you to withdraw and deposit money into your account easily while avoiding minimum balance fees.
Acorns Found Money: For every purchase made at this online market place a little percentage is reversed to you. This reversed percentage is then invested into your Acorns Invest account.
Acorns Early: This is a Uniform transfer to minors act/ universal Gift for minors act account also known as UTMA/UGMA account. This feature enables parents or guardians to save up for their minors easily.
This tool is mostly used by a professional on analyzing their client’s financial data.
It has an easy-to-understand interface which makes it easy for clients to understand the visual financial plans. It runs a top-notch retirement savings program.
5. Right capital
Right Capital is a financial planning tool that is used by financial advisors to
manage clients’ finances. Right capital works by creating a working budget, suitable retirement plans and creation of various routes for tax efficiency hence saving your clients or individual money.
This finance tool offers a free trial but does not have a free version. It
simplifies the process of financial planning in order to be easily understandable to individuals or clients with little or no knowledge of financial planning.
It also helps in student loan planning, Medicare planning, estate planning and
social security optimization.
Frequently asked questions – Financial Planning Tools
Yes, most financial planning tools are easy to use and understand.
Yes, some financial planning tools are free and require no hidden tax payments, an example is the intuit mint.
Yes, it is. Despite being safe, endeavor to research properly before adopting any financial planning tool, seek assistance from a financial planner if you still feel doubtful.
Yes, Most financial planning tools allow you to adjust the financial budget to fit your goals.
Financial planning tools lets you spend smartly hence drastically reducing the possibility of falling into debt.
The role of financial planning tools in our financial life cannot be overemphasized. With suitable financial planning tools your finances will take a more positive look.
There are various tools to choose from and they all have various features and spec which make them unique and different from others. When selecting a finance tool, you should ensure it’ll be able to help in achieving your finance goals. You can seek help from a financial advisor if you feel confused.
- smartasset.com – Financial planning software
- forbes.com – Acrons review
- businessinsider.com – Free tools for money management
- savology.com – Best free personal finance tools
- smartasset.com – Financial planning software