How to save money this year using these free tools

With the new year underway, it’s an excellent time to review your spending from last year to identify potential ways to save money, watch out for fraudulent activity, and monitor investments. Today, I am going to discuss just a few of the many tools out there to help you do so.

Visual tools can show you where you could save money

For tracking all of my financial accounts, I use Personal Capital. It’s a free tool that I have been using for years now that has really given me great insight into my finances. Among the many features it offers are built-in retirement projection and investment asset allocation tools. Though not a complete substitute for professional advice, they do give you a a quick look on progress. And, speaking of which, if you’d like professional money management services, the site does offer access to investment managers (for a fee). For day-to-day usage, Personal Capital is also a great tool for seeing how much money I have and where it’s being spent. The pie charts are pretty eye-opening when you drill down in them as well.

save money

Credit: Personal Capital

Besides Personal Capital, other online options include Mint.com, which I haven’t tried yet but serves essentially the same purpose – tracking money. And, there are also many apps on Google Play and the iTunes app store, too. Some are really geared for budgeting and planning as opposed to just tracking what you have already spent. Try out a few out before buying them as not all are free.

Keep in mind…

Since some of these sites and apps do take a bit of set up time to figure out, an easy way to monitor what you have spent in the last year your year-end summary statements from banks and credit card companies. Chase, my credit card provider, typically around the 11th of January, publishes a complete list of all of my spending in the past year. Then, they put it in a pie chart so I can really see how much those once-a-day habits really add up. Seeing the pie chart provides a powerful cue as to where opportunities to save money can be found.

What can be a little confusing with looking at your expenditures this way is that the bank codes the transactions according to the provider, not the item. A great example of mis-coding I will see on statements is for Walgreens. I usually buy a lot of household products there and some groceries but the coding comes up as “Health/Wellness.” Over time, it makes it makes the health care portion of my budget to be over inflated and disproportional.

No matter what your income, reducing spending and controlling costs that you can are great, time-tested strategies to save money. Any identified savings are also great for boosting your savings and investments, too. As I discussed previously, I anticipate more financial apps (FinApps) making a debut this year as the field grows. I hope more innovative ones continue to be introduced and I will be on the look out for them.

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