Significant Others Holding Hands While Making Financial Decisions

Money impacts all our lives in many different ways. It pays for the essentials that keep us healthy and safe. It enables us to be ready for future expenses and plan new experiences. And it makes us feel good when we can share it with people in need.

Having a steady income can also eliminate financial anxiety. While money cannot buy happiness, studies have shown that, on average, happiness levels do increase with income up to roughly $75,000 in annual salary. The reason money increases happiness (up to a point) is that it takes a certain salary to feel financially secure.

Financial security is extremely valuable. But without a basic financial plan in place, income can easily be mismanaged. A common misconception is that you need a substantial income before a financial plan is really necessary. However, a sound financial plan is beneficial for anyone who wants financial security. And account holders may not be aware of the help your institution can give them in creating the right plan.

The DIY Mentality

A good financial plan covers the current state of a person’s finances, makes realistic projections about the future, and offers recommendations based on someone’s needs and goals.

As in so many areas, evolving technology has led to more consumers taking their financial matters into their own hands. There are many popular online and mobile DIY tools available to help people with budgeting, saving, and investing.

One of the reasons these tools are so popular is that they make it relatively easy to master the basics of financial planning. The DIY approach also gives them a feeling of empowerment, helping them reach their financial goals on their own terms.

Personal Finance Tools

Quicken is one of the most well-established personal finance tools, and it’s popular for good reason. It lets consumers create and manage budgets, track debts, work toward savings goals, get investment coaching, and even calculate their net worth.

Mint is popular for budgeting. By linking to a user’s bank account, Mint pulls in purchase info and tracks spending habits. You Need a Budget (YNAB) also records and analyzes what people spend their money on. By helping to manage daily finances, both tools enable consumers to create a monthly budget and break bad financial habits.

Personal Capital is a useful tool for people who want to see their complete financial picture. It allows users to manage all their financial accounts on a single platform. Once someone’s financial profile is complete, they can get personalized financial advice based on their retirement and investment goals.

Complement the DIY Approach

Using personal finance tools to create a viable financial plan is a great way for consumers to get a better sense of their current financial state and what goals they can reach with their money.

However, even the savviest folks can’t do all their financial planning alone. Managing money gets complicated quickly, especially when it comes to investments, debt consolidation, retirement planning and tax preparation. People still need support from their primary financial institution when making important decisions about their money.

Don’t underestimate the value of face-to-face interaction when it comes to personal finances. Not only do different people and generations prefer different communication methods, some may not be ready to entrust their financial security entirely to technology. Plus, a positive customer experience combined with personal touch goes a long way toward building trust and good will with account holders.

Keep in mind, there’s also an ever-present threat that can devastate financial plans and that no amount of DIY tracking can prepare people for: identity crimes.

In 2017, 16.7 million consumers were victims of identity fraud. This alarming statistic was responsible for $16.8 billion in collective losses. As a result, consumers’ beliefs about who is responsible for preventing fraud have shifted from themselves to others, especially their financial institution.

A Prime Opportunity

Although financial institutions can provide the tools necessary to protect their account holders from fraud, they’re limited in their ability to thwart fraud that occurs outside their institution.

If you’re interested in discussing a partnership opportunity, schedule a demo today.