5 Healthier Financial Choices to Make With Apps

February 09, 2016

Connect Member

Senior Editor for Earnest. We’re building the modern bank for the next generation.

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We make choices to live a healthier lifestyle every day, like walking instead of driving, or eating fresh fruit instead of ice cream. However, healthy choices aren’t limited to physical health.

Just like your FitBit might help you track your fitness activity, a new generation of technology can help you make healthier decisions about your money.

Nearly all of our routine financial tasks — saving, spending, borrowing, insuring — have become easier in recent years thanks to more sophisticated software and apps. Let’s take a look at some of the ways you can make better financial choices with the help of these new technology-based services.

Healthier Financial Choice 1: Stop Paying So Much Interest on Your Student Loans
For 40 million Americans, student loans are a fact of life. There are, however, ways to make living with debt easier, such as refinancing into better rates. By refinancing student loans, you can reduce your monthly payments or reconfigure the terms of your loan so it fits better with your monthly budget.

You might try: Earnest, which offers hyper-personalized loans with its Precision Pricing feature. This feature provides you with an interest rate that matches your budget so you’re not overpaying in interest.

Healthier Financial Choice 2: Reduce Your Investment Fees
Investing is not new, but using technology to manage your investments is a recent thing. Automated investment services, also known as “robo-advisors,” provide online tools to help you customize sophisticated investment portfolios with the right mix of stocks and bonds, and then keep your investments balanced so they can perform as they should over time. These online investment management tools cost only a fraction of what a more traditional (human) investment advisor costs.

You might try: Betterment and Wealthfront, two leading automated investing services. Both have fees that are much lower than traditional investment services’, and they offer customized portfolios of ETFs as well as automated features like tax loss harvesting that can help you turn any investment losses into a tax benefit.

Healthier Financial Choice 3: Pay Insurance for Only the Miles You Drive
New technology helps you match the number of miles you drive with what you actually pay for car insurance. This is especially useful for people who keep their cars parked in a garage most of the time. With traditional insurance, you might pay $150 per month regardless of how many miles you drive. Newer, technology-based auto insurance plans allow you to pay for only what you need.

You might try: Metromile, where you plug a tracker into your vehicle to log the number of miles you drive. This information becomes the basis for what you pay in premiums. An added benefit of the tracker is the ability to log all the trips you’ve taken and see where you’re parked each time.

Healthier Financial Choice 4: Do Your Own Taxes
The tax code is intimidating (it’s 2,600 pages long!) and it can get complicated fast. Software solutions can walk you through a series of questions — just like an accountant would — to determine which credits and deductions you’re eligible to use. The real benefit of doing your own taxes is that it’s much cheaper than an accountant. Remember, the amount you spend on tax prep is also tax-deductible!

You might try: TurboTax. Whether your taxes are extremely simple or extremely complex (for example, you have itemized deductions or you’re a small business owner), TurboTax offers different versions of its software that range in cost from free to $59.99.

Healthier Financial Choice 5: Invest Your Loose Change Automatically
We’ve all seen how tossing loose change into a jar each day can add up to a surprisingly large amount of money by the end the year. It’s possible to apply that same principle with digital transactions involving small daily amounts that you won’t even miss.

You might try: Acorns, an app that allows you to save and invest small amounts every day. For example, if you spend $12.47 on lunch with your debit card, your Acorns account will grab the remaining 53 cents and invest it. The service isn’t free, but it’s a great way to make saving as seamless and painless as possible. Another alternative is the free app Digit, which quietly dips into your checking account to move money (between $5 and $50) into a savings account several times each month.

Be Healthier This Year
Many of us have vowed to live a more healthful lifestyle this year by eating better, exercising more, and reducing stress. Be sure to apply the same principles to your financial health, because it contributes to your well-being just as much as vegetables and treadmill sessions do.

Catherine New is a member of the DailyWorth Connect program. Read more about the program here.

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