Simplify your financial life

    Digital money tools can save time and trouble. Here's the lowdown on their use and safety.

    Published: March 2014

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    Let's face it: Managing your money involves a lot of drudge work. But you can ease the pain by using technology—computer software, online services, and smart phone apps—that put the information and services you need at your fingertips. They can also automate repetitive tasks, apply computing power to crunch the numbers, and alert you to important new information. Those efficiencies can produce benefits you can take to the bank—by cutting expenses and boosting investment returns—and free up time for the pleasurable activities you'd rather be doing instead of hunching over a ledger book.

    Of course, we know that some money matters are better left to paper, pencil, and human beings, so our one-stop-shopping guide to simplicity tools also includes some that don't require any technology.

    We also know that not everyone is comfortable mixing personal finances with technology. Security is a legitimate concern, which may help explain why little more than half of all workers and only a quarter of retirees use a personal computer and the Internet to help manage their personal finances, according to a 2012 survey by the Employee Benefit Research Center.

    So we assess the risks of those tools, explain how providers protect your privacy and security, and give advice on how you can reduce threats—sometimes by using only some of the features and avoiding others.

    Where to begin? The sheer number of digital money tools on the market—in the hundreds—can scare you away from picking any. Don't be intimidated; you don't need them all. Here's our simplified list of recommendations.


    The tools and benefits. Banking online and via your smart phone provides lots of money streamliners. You get access anywhere to account information including balances, checks cleared, fees, and even unauthorized charges. By paying bills electronically, you don't have to write checks or buy stamps, and you can pay some recurring bills automatically. You can transfer balances, scan and deposit paper checks through your smart phone, send money to a friend electronically with the Person2Person payments feature, and find the nearest branch or free ATM using your smart-phone's GPS and mobile-banking app. Online access is available from credit-card issuers, too.

    The risks. The theft of debit, credit, and prepaid card data from Target and Neiman Marcus during the 2013 holidays shows that you don't have to bank online to be hit by the everyday reality of hackers. But multiple layers of security protect online and mobile access to your deposit and credit accounts. While there are no guarantees you're completely safe, anyone hacking your accounts would need your banking user name and password, at minimum.

    Even if your account is hacked, your liability for stolen deposits and unauthorized credit charges is limited and can be as low as nothing because of consumer protection laws and zero-liability policies at many financial institutions and transaction processors.

    But the hassle of sorting things out if your checking account is hit and the potential for identity theft is real. Only you can weigh your discomfort with that "maybe" against the convenience.

    The cost. At most banks, nothing.

    Our advice. A must for the convenience and the ability to monitor accounts for unauthorized charges (see "Identity Security," below). And banking-system security is as good as it gets, because these core institutions of the economy are themselves on the hook for the fraud losses.

    How to get started. Go to your bank's website for online banking and look for directions on where to download the appropriate apps.


    The tools and benefits. Simplee Wallet makes sense of the windstorm of paper statements, bills, and notices you get from multiple insurance and health care providers. It organizes in one place all of the information about your coverage, deductibles, and co-payments, along with your medical bills and statements from your insurer. You can access your account through the Web or an app, so it's easier to understand what you owe to whom, determine how much of your deductibles have been paid as you move through the year, and read plain-language descriptions of the services you're paying for. Simplee Wallet also looks for billing errors and offers saving tips.

    If you suffered damage to your insured auto or home, use claim-filing smart-phone apps now available from most major insurers. You can photograph damage with your cell-phone camera, call a tow truck using your GPS coordinates, and fill out and electronically file your claim, which can speed up payments. And get ahead of the curve on home losses by creating an inventory of your possessions using the Insurance Information Institute's "Know Your Stuff" app or one offered by insurers, such as Allstate's Digital Locker and Liberty Mutual's Home Gallery. State Farm customers can access the HomeIndex inventory tool free on the insurer's website.

    The risks. Simplee Wallet is compliant with the security standards of the Health Insurance Portability and Accountability Act. Security is less of a threat with insurance claims and home inventories, but both use encryption technology and secure servers. Home-inventory storage on the cloud also ensures that you can access the information after a natural disaster.

    The cost. Free.

    Our advice. All of those apps are worthwhile conveniences. Simplee Wallet works with health care providers, as well as medical, dental, vision, pharmacy, and health spending coverage. The service coordinates with insurance companies, so we recommend that you also register directly with your insurer's online access for more details about your coverage.

    You can download the apps from the iTunes or Google Play app stores. Check user reviews for community experience, advice, and troubleshooting.

    Want to read more on retirement? Visit the Consumer Reports Retirement Guide.

    Saving and retirement planning

    The tools and benefits. is an excellent aggregator of resources for saving, including online calculators, budgeting tools, and advice on how to get started. It's often customized for your specific goal, whether you're saving for a car or college tuition, planning to buy a home, or building emergency funds. The Ballpark Estimate, available as an online tool, app, and a printable worksheet, makes the complexity of retirement planning significantly easier by helping you quickly determine how much you'll need to save for a comfortable retirement. It also links you to the Social Security Administration's online benefits calculator.

    The second major tool for making saving a breeze is automatic deductions from your paycheck and direct deposit into your savings, 401(k), and mutual-fund accounts.

    The risks. None. Those online planning tools don't require any financial account or personal identifying information about you. Payroll deductions transmitted directly to financial institutions go through the Automated Clearing House, the banking industry's private electronic payments network.

    While ACH fraud is a possibility, in this instance the financial institutions and your employer are liable for any losses, not you. Protect yourself by never responding to e-mail requests for personal financial information and never clicking on links in phishing e-mail; independently telephone your employer, bank, or investment company to verify such requests.

    The cost. Free.

    Our advice. Take advantage of Choose to Save's financial resources, because it's operated by two bedrock nonprofit, nonpartisan, noncommercial organizations, the American Savings Education Council and the Employee Benefit Research Institute. Contact your employer's payroll department to arrange for automated paycheck deductions to be deposited into your savings and investment accounts.

    Personal financial management

    The tools and benefits. Bring balances, transactions, and other details from all of your key deposit, investing, and credit accounts together in one place for easy oversight, planning, and management. Create a household budget, track and analyze expenses, forecast income and costs, and organize your spending into categories. Get alerts on overdrafts and fees, bill reminders, and suspicious transactions.

    Among the proliferating choices, no single tool does everything. That makes settling on one solution a matter of personal preference, says Mark Schwanhausser, director of omnichannel financial services at Javelin Strategy & Research, a California consulting firm. Those tools are available through software (Quicken and You Need a Budget, for example), online services (such as and Check), and bank and credit-union websites.

    The risks. The software and online services can retrieve your financial account information. But they can't buy, sell, withdraw, or charge orders, so a hacker can't use them to initiate activity. But because account information is valuable to thieves—and since you must enter your account user name and password through the systems to let them download your data—all of them use encryption and other security measures, though none is fail-safe.

    But you can increase your risk with every new site you add. "The fewer places you have your data, the better," said a security expert, Phil Froehlich, chief operating officer of Integris Security, a New York consulting company.

    The cost. Bank and online tools are typically free. Quicken costs $30 to $105, depending on what version you buy, while YNAB costs $60.

    Our advice. Banks are the logical place to consolidate all of your financial information. You can take action via your accounts, and the services usually cost nothing. So try them first.


    The tools and benefits. If you have relatively simple tax returns, tax-prep software will lead you through the process, make calculations automatically, and allow you to file electronically. For more complex returns, you'll save time and perhaps money with a professional tax preparer.

    One of the toughest parts of doing taxes—whether you're doing them yourself or paying someone— is gathering and organizing receipts for your deductions. Simplify here by buying a receipt scanner that can convert your paper receipts into digital files. The Internal Revenue Service accepts digitized receipts as valid proof of deductions, so you can toss the paper after scanning.

    The risks. Using software to fill out your return doesn't mean you have to file it electronically; you can print out a paper copy and mail it. But make sure your stored digital files are encrypted in case your computer is stolen. Electronic filing is nevertheless secure and has major advantages, including fast acknowledgement that it was received by the taxing authorities without errors or other problems, and quicker refunds. Your receipts probably won't be much interest to thieves, but you should back them up so you don't lose them, preferably off-site on Google Drive or another consumer data back-up service.

    The cost. It varies depending on the version you use and whether you prepare online or use a CD-ROM, software download, or mobile app. Intuit's TurboTax, the best seller, ranges from free to $90; TaxACT by InfoSpace ranges from free to $22; and H&R Block's offerings range from free to $40. (Read a comparison of H&R Block Deluxe and TurboTax Deluxe here.) Tax preparers can charge an average of $261, according to the National Society of Accountants. The Neat company sells a portable receipt scanner for $180 and a desktop model for $400.

    Our advice. Pick the option suited to your budget and needs. The Neat scanners are an affordable choice, but we haven't tested them.

    —Jeff Blyskal

    Identity security: When old school works best

    Your eyes are a critical line of defense against fraud. So regularly and personally monitor your bank account, and credit-card, credit-report, and investment transactions, and report unauthorized activity immediately. Guard against divulging personal and financial information in response to e-mail that might be a phishing scam and during suspicious phone calls. Place a security freeze on your credit report, a key protection that blocks access by companies and people you don't already do business with. Use your intuition to detect fraud in the works.

    Technology can help. Install antivirus, antispyware software on your computers and mobile devices. Sign up for mobile banking and online access to your accounts to see transactions anytime in real time rather than wait for a monthly paper statement. Set up text and e-mail alerts with your financial institutions to flag any suspicious activity.

    Editor's Note:

    This article also appeared in the April 2014 issue of Consumer Reports Money Adviser.

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