But help is out there–free of charge. And you don’t even have to leave your home. MSN Money offers a range of tools to help you manage your money. We’ve picked a few to get you started.
Step one is figuring out how much help you need in managing your money. MSN Money’s Debt Evaluator helps you figure out how much of your income is spent on bills and rent each month, then lets you know whether your debt-to-income ratio is acceptable or if it’s too high in the eyes of lenders. The program warns you if your debt level is getting too high (anything above 30 percent of your income) or if it’s too high already for you to be approved for a mortgage loan.
Regardless of how much debt you have, it’s a good idea to come up with a spending plan and to stick to it. MSN Money offers a good combination of tools with the Budget Tracker and the Spending Analysis to get you started. (Both tools require a Passport log-in, so that you can save information for subsequent use. If you already have a Hotmail or MSN e-mail address, that will serve as your Passport identification. Otherwise, the Passport sign-up process is relatively brief and permits you to choose how much personal information to provide. For more information about Passport, click here. )
The Spending Analysis tool looks at your bank records and examines every expenditure as it would appear in your monthly statement, then categorizes them. This is a great way to keep track of where your money is going, though the computer may need a little help categorizing the expenditures. When you use your debit card, the name of the restaurant or retailer is typically listed so the computer automatically categorize the expenditure as “dining out” or “clothes.” However, you will still need to keep good records of what you charged and how you spent the cash you withdrew if you really want this to be an effective tool. If you’re willing to plug in the data, and spend some time making sure each of the expenditures is in the right category (you can add your own customized categories, as well), then this is a very effective and convenient way to keep track of your spending on a near-daily basis.
Once you’ve analyzed your spending habits, you will more fully appreciate the budget tools available. The Budget Tracker allows you to plug in estimates. Then it analyzes your spending and lets you know how far off you are from those estimates.
Now that you’ve figured out a realistic budget that can stick to, you should be able to start saving up some money. The next question is where to put that money you saved in order to get the best return.
Credit counselors might advise that you use that extra money toward your credit card payments, starting with the balance with the highest interest rate. But, let’s assume your debt load is under control (meaning under 20 percent) and you want to start saving for a down payment on a home. How much do you need to sock away each month? Where should you put it? And for how long?
The MSN Money Savings Calculator tool can help answer those questions by determining how much you need to put away each month and for how long (depending on the interest you’re earning and whether it’s taxed) in order to reach your goal. This is a good way to evaluate whether you should put your money in a money market or regular savings account, or invest it somewhere else. If you make regular $200 monthly deposits into a savings account that yields 3.5 percent returns, for example, it would take you about four years to save up for a $10,000 down payment on a house.
How much more could you earn if you invested that money in the market instead?
The MSN Money Stock Screener tool can help answer that question. The screen offers information in 17 different categories of stock picks from “The highest-yielding stocks in the S&P 500” to “Righteous Rockets” (companies that appear undervalued, are profitable and have strong balance sheets–which makes them “righteous.” But they also are fast growing and have begun to see significant stock price appreciation–which makes them “rockets.”) to the “Cheapest Stocks of Large, Growing Companies” (stocks of companies with market caps greater than $5 billion that are growing earnings at least 20 percent a year but have price-earnings ratios less than 20 and price-sales ratios less than 1.5).
If you prefer to invest in a fund, rather than investing on a stock-by-stock basis, check out the MSN Money Mutual Fund Screener. This screen offers information on 15 different types of funds–from high-yield bond funds to foreign stock funds–as well as a “Do-It-Yourself-Fund” option. The customized function lets you look for no-load funds with consistent management, low risk and a consistently high return, then asks you to decide the type of fund that most interests you.
Now that you have mastered your day-to-day spending habits, saved up some money and researched your investment options, you can start planning for your retirement. MSN Money’s more sophisticated Retirement Planner is a great tool for long-term planning so you can reap the rewards of your efforts and retire in comfort.
