The Products and Programs I Use To Manage My Finances

Posted on Posted in Learn More

I saw another personal finance blogger recently share the programs he uses and the companies he works with to manage his family’s finances. I thought it was interesting and it caused me to think about what I do and what financial products I use. So here it is, the stuff I use to manage my stuff.

 

Banking

I’ll start with the everyday basics. For banking we use Bank of America. We have a checking account and custodial savings accounts for both of our daughters. We use these custodial savings accounts to deposit any birthday or gift money they receive. Nothing too fancy. All of these accounts earn practically no interest. But they do offer mobile banking which allows up to deposit checks without actually going to the bank or an ATM. Also, we aren’t charged any fees for these accounts and we have been happy with them so far, so I think we still come out ahead compared to other banks.  

I’d like to note there are several online banks now that offer 1% or greater interest on savings and checking accounts. If I was considering switching banks I would lean towards one of the online banks. But keep in mind, these online banks rarely have store fronts so you would have to handle all customer service issues and deposits online or over the phone.

 

Retirement Savings

Most of our retirement savings are through employer sponsored 401(k)’s. The bulk of our savings, both employer sponsored 401(k)’s and personal IRA’s, are with Vanguard

All of our retirement savings are in various mutual funds but most of them are in index funds like VTSAX.

 

Credit Cards

I know personal finance guru Dave Ramsey hates credit cards and chastises his radio show guests for using them. But credit cards can have some pretty amazing perks. While Ramsey is right, many people should avoid credit cards if they are not able to pay the credit cards off every month because they will likely find themselves getting deeper and deeper in debt. But if you are able to keep track of all of your accounts and pay them off every month then credit cards can have some pretty lucrative offers. My wife and I have been able to use the rewards points from a handful credit cards in ways that allow us to go on several vacations for pennies on the dollar.  But, as stated earlier, we make sure to pay all credit card balances in full every month. We simply put them on auto-pay and make sure we keep enough money in our checking account to handle the monthly payments to avoid unnecessary penalties and interest.

We typically apply for a few different credit cards throughout the year focusing on the cards that will get us the big sign-up bonuses for frequent flier miles and hotel points. A few examples of how frequent flier miles and hotel points enable us to travel include: a Caribbean cruise in December 2016 where the flights cost us just $11.20 each after redeeming some Southwest Airlines frequent flier miles. So far in 2017, we literally flew around the world visiting Hong Kong, Kuala Lumpur, the Maldives, and Abu Dhabi all in business class seats that laid fully flat for sleeping —and all we had to pay for those flights was the taxes and fuel surcharges which ended up being a few hundred dollars per person. 

 

Also, early this spring I went on a ski trip to Whistler, Canada and stayed at the Westin ski-in/ski-out resort for free for 5 nights.

 

So with all of that in mind, we are currently using the following two credits for all of our spending:

  • Starwood Preferred Guest American Express that had a 35,000 point bonus.
  • Chase Sapphire Preferred Reserve which had a 100,000 point sign-up bonus.

Both of these credit cards had limited time offers with increased sign-up bonuses and may no longer be available. If you want to learn more about frequent flier miles, hotel points, and credit card sign up bonuses, I recommend signing up for the free travel miles email series course from Travel Miles 101.

One last thing to note; it can get confusing and overwhelming when you start collecting some of these miles and points. We use AwardWallet to keep track of the various miles and points we earn.

 

Taxes

For tax preparation, we use a Certified Public Accountant (CPA). There are some advantages to using a CPA if your taxes aren’t straightforward, like ours.  For example, last year we had K-1s, W-2s, a number of retirement accounts and we were eligible for a bunch of credits and deductions due to kids, having a rental house, and so on. With some of the complexities in our tax preparation, using a CPA has made sense for us. Next year, I am thinking about using TurboTax and comparing the final tax forms with what our CPA puts together. I’d like to do this for a few reasons. First, it will give me a little peace of mind to double-check the figures our CPA comes up with. Second, I will likely better understand taxes myself. Third, I would like to take over doing our taxes again in the future.

 

Insurance

With regard to insurance of any type, my overall approach is simply to buy the cheapest policy that provides the coverage I want, as long as the company has a good credit rating.

For home owners insurance and auto insurance, we currently go through GEICO. Also, we raised our deductibles up a bit which in turn was able to get us lower monthly/annual premium. So we have been able to save a couple hundred bucks there.

As far as health insurance, we have a high deductible plan offered by my employer and are able to get really good rates. Also, our high deductible plan is eligible to be used in conjunction with a Health Savings Account (HSA), so we take full advantage of that and max out contributions to that HSA every year.

We also contribute toward a Dependent Care Flexible Spending Account (DCFSA) through my employer. With a DCFSA account, money goes from your paycheck straight to the DCFSA account without getting taxed. So essentially, the income from your employer is moved to this account to be used for certain dependent care expenses without being charged taxes like the rest of your income. The money in this account can be used for preschool, summer day camp, before/after school programs, and child or elder daycare. In our case, it has been a pretty big help with offsetting some of the costs of out daughters’ daycare.

 

Education Savings

We have 529 college savings accounts for our daughters. After quite a bit of research, we decided to go with New York’s 529 plan. Each state has their own 529 plans available, but you do not have to use the 529 in the state where you live. The New York 529 plan has some of the lowest fees in the country and gives us access to low-cost Vanguard index funds. Plus, we can get a deduction on our Kansas state income taxes for the amount we contribute to our daughters’ 529 accounts, even though their accounts are based on New York plan rules and not Kansas. Every state is different with different contribution and tax deduction limits. A good site for learning more about 529 college savings accounts and comparing them is Savingforcollege.com.

 

Budgeting & Expense Tracking

To keep track of all of our accounts like savings, checking, retirement, and daughters’ accounts, I used to use Mint. But I have now switched over to Personal Capital for budgeting and expense tracking and so many more things. Mint is a very valuable tool that is especially helpful for budgeting and analyzing spending habits. But my family is pretty much creatures of habit and our monthly budget doesn’t change much unless we go on a vacation or something big like that. So once we got a grasp on our monthly budget, we made some tweaks and don’t really have changes very often anymore.

Personal Capital can do budgeting and expense tracking very similar to Mint. But they really valuable analysis tools around investments. Personal Capital offers some pretty cool features for free including a Retirement Fee Analyzer and an Investment Checkup. But my favorite feature is the Retirement Planner where it forecasts the future value of your retirement and investment accounts taking a ton of variables into consideration.

 

Summary

There are countless options of programs and companies out there to help manage your finances. I have three basic pieces of advice to help decide what financial products to use:

  1. Keep it simple.
  2. Automate when you can.
  3. Be sure you understand any fees that may be associated with the company, program, or account. Always ask if it isn’t clear.

Hope this helps!

 

What products and programs do you use to keep track of and manage your money?

 

What do you think?