Smart Personal Finance Tools That Can Help Enhance Your Financial Wellbeing

The need for better money management soars as the world continues to change. Your personal finances are currently facing extreme pressure due to various factors like the high-interest rates causing intense difficulties for a manageable mortgage, inflation with ever-increasing energy bills, and general price rise for everyday staples, which are leaving people facing a stark choice of whether to spend or save. However, despite this rocky outlook, it remains essential to stay in control of your finances for the sake of your overall financial wellbeing.

The question here is, how can we keep financial wellbeing on track, in this fast-paced world surrounded by uncertainties?

Well, Fintech, short for financial technology, makes money management quicker, easier, safer, and more efficient than ever. It is defined as a piece of technological innovation that aims to facilitate or moderate traditional financial methodologies and financial services. Fintech has created a new wave of tech-savvy customers or investors, especially the millennials and Gen Z are embracing a new era of financing, controlled via mobile technology offering so much more in terms of products and services than ever before.

Fintech has gained traction on a large scale amidst the pandemic times and has continued since then as people are beginning to see the potential of managing their finances on digital platforms. Financial tasks that once needed to be performed in person, such as depositing paychecks or applying for loans, are now available online. In particular, tools that help people automate personal finance tasks like bill payment and budgeting have become popular time-savers.

Indeed, financial management tools provide better control over your finances in an automated and systematic way achieving a vital sense of financial wellbeing. However, first, you must be aware of these financial management tools to be able to use them to your benefit.

Here's a list of essential financial management tools that you may consider:

1. To Assist You in Tracking Your Finances Effectively

Managing your money isn't the easiest thing to do. Now that many of us no longer maintain a passbook, tracking expenses can get a little difficult. Personal finance apps can connect with your bank account and help you keep up with your spending.

• Apps to Record Your Bill Payments: Certain apps allow individuals to have proof of spending with them and do not compel you to manage and keep a record of your receipts manually. Proofs of spending would be required in multiple case scenarios - for your own self and budgeting, or if you are looking to get reimbursements from your employer etc. These apps can help you figure out which categories you spend the most in, track upcoming bill payments (some allow you to pay your bills directly through the app), and keep up with your credit score. It ensures that all bills are paid on time and that people do not overspend.

• Budgeting Apps: A more advanced way of managing your cashflows is by following a budgeting exercise. While the above-mentioned apps track and keep proof of your payment receipts only, the budgeting apps create a full monthly budget for you. With the advent of budgeting apps, monitoring spending and setting budgets has been easier. These apps have entirely changed the way people used to carry out their financial transactions. It not only saves money for the customer, but it also saves time and effort. The app tracks your spending and allows you to integrate that with your budget to set financial parameters for yourself.

2. For You to Bank Smartly

Gone are the days when you had to go to the bank to check your balance or even deposit your cheques. Digital banking, including mobile banking, net banking, and apps allows you to check your balance, transfer money between accounts, pay bills and deposit at your convenience. So you never have to worry about sparing time from your busy schedule to visit a bank.

Online banking skyrocketed amid the pandemic as going into a physical location became a matter of public health. Digital banking has empowered consumers in a variety of ways. It has made it possible for users to receive wages and send money to loved ones in a secure, cheap, and rapid manner. Digital banking apps will show transactions and adjust figures almost immediately, eliminating the confusion that comes with delayed records and payments.

• Set Auto-Payments: Considering the economic uncertainty is likely to continue in the near term, savings should be your top priority. Online banking allows you to set auto-payments, it can be for your investments, emergency funds and your debts. You may set auto-debit and link it towards your SIP investments in mutual funds, and also set your monthly debt repayments. This feature prevents any default in payments and keeps you on track with your finances, avoiding any penalties for late payments.

• Bank Alerts: Many digital banks use push notifications to alert their customers when money is debited/credited or there is a low balance, giving consumers greater transparency over their finances. Some banks even allow users to set a spending limit, to prevent unnecessary splurging.

• Digital Lending/Loan apps: There are various applications that provide loans online, it could be a banking app or other financial institutions like NBFC offering digital lending services. Many digital lending platforms have also simplified the process of lending with personal loans possible within 10 minutes and now even getting a home loan in a matter of few days. It may sound convenient that you can avail of a loan online with minimal documentation at your fingertips. However, you must be aware of fraudsters and maintain your financial security. Do note that although such apps offer ease of borrowing, they may charge you higher interest and you may increase your debt burden.

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3. For You to Manage Your Investments Better

Many individuals, particularly young investors are attracted to online investing. Investing in the right products and financial services is one of the most critical steps toward establishing a solid foundation for your investment portfolio. There are various financial management tools that will help you manage your investments smartly.

• Online Financial Calculators: You name your goal or investment purpose and there is a calculator available for it. There are several financial calculators available online by various fund houses or financial institutions on their apps or digital platforms. PersonalFN offers you a wide variety of calculators such as SIP Calculator and Mutual Fund Calculator (this provides you with the future value of your mutual fund investments and the right SIP amount required to achieve your specific goals), Retirement Calculator (helps you calculate your retirement corpus), STP Calculator, Personal Loan Calculator, Home Loan Calculator and many more. Such online calculators offer you the ease of identifying the amount of money required, avoiding the stress of complex calculations.

• Online Mutual Fund Comparison Tools: 'Compare Mutual Funds' tool is available online across various fund houses and mutual fund distributors' web portals. It allows you to compare two or more mutual fund schemes across varied time frames. It also provides a quick view of various qualitative and quantitative parameters details like Performance, Rating, Portfolio holding and much more.

• Robo-Advisors: Fintech platforms provide investors with a comprehensive set of tools to invest, manage and track their investments. There is an automated investment advisory tool popularly known as robo-advisors. The Robo-advisors work by asking a few simple questions to determine your goal and risk tolerance and then suggest investing your money in a highly diversified low-cost portfolio of worthy investments. However, some investing platforms or apps recommend schemes based only on past returns, which will not be indicative of future returns as well. Most of them are not backed by comprehensive research, which makes these fintech platforms less efficient. You should look for a platform that meets your overall requirements.

• Mutual Fund Portfolio Review: It is crucial to review your mutual fund portfolio to avoid downside risk caused by market fluctuations due to events like the Adani saga and to generate risk-adjusted returns. The mutual fund portfolio review tool will help you evaluate your portfolio within no time and provide you with an overview of your portfolio performance and the actions required to rebalance your portfolio. Here's 'PersonalFN's Mutual Fund Portfolio Review' service, which is a personalised portfolio review service designed to boost the returns of mutual fund investors by reviewing and streamlining their existing mutual fund portfolio.

• Online Investing Applications: Now you can invest in various investment avenues with a few simple clicks. There are multiple online investment apps available in the market which provides access to market information with unbiased research reports, and digital investments in mutual funds, stocks, FDs etc. Such online investment tools have made it easier for many individuals to adopt the habit of investing regularly and efficiently. You can simply place a SIP investment in the mutual fund of your choice based on your suitability within few minutes and keep a track of it.

Consequently, Fintech helps you make better investment decisions at a low cost, including how to best save for financial goals like a child's education, purchase of dream home/car, or retirement, without paying costly management fees. These solutions are customized to the individual so they can reach their personal financial goals.

I would recommend PersonalFN's SMART Fund Explorer which helps you plan your mutual fund investments smartly to achieve your financial goals. It provides a list of the best suitable mutual fund schemes recommended by our research team that will help you reach your financial goals.

All you have to do is follow these 4 simple steps:

Step #1 - Select the type of goal (buying a house, child's education, child's marriage, car, retirement, etc.).

Step #2 - Determine a suitable time frame for achieving these goals.

Step #3 - Insert the amount of money that you are willing to invest towards your goal.

Step #4 - Choose the type of investment (lumpsum or SIP).

PersonalFN's SMART Fund Explorer will draw the return expectation to reach your goal and two mutual fund investment options (A & B) which includes investment across asset classes and market cap. You may choose either of the options based on your risk profile.

This is an opportunity to begin your investment in mutual funds with a smartly selected list of the best suitable mutual funds. So what are you waiting for? Click on the key to accomplishing your financial goals with PersonalFN's SMART Fund Explorer.

To conclude...

Time is money! and financial automation can assist you in saving both. Such personal finance management tools will assist you in gaining control of your finances and making sound financial decisions. Fintech is emerging as a more efficient means of achieving financial goals than traditional methods. Managing your finances is not required to be such a daunting task if you can take advantage of such technology.

The financial services industry will continue to respond with technological advancements as the market changes to help you manage your money effectively. New fintech technologies and services aimed at personal finance will emerge, providing even more options to assist you in meeting your financial goals. Staying on top of these developments can help you make the most of your finances and focus on more nuanced elements of your financial wellbeing.

MITALI DHOKE is a Research Analyst at PersonalFN. She is an MBA (Finance) and a post-graduate in commerce (M. Com). She focuses primarily on covering articles around mutual funds including NFOs, financial planning and fixed-income products. Mitali holds an overall experience of 4 years in the financial services industry.

She also actively contributes towards content creation for PersonalFN’s social media platforms in the endeavour to educate investors and enhance their financial knowledge.