Personal Finance Tools

• Several tools, some free and some with paid features, exist to help with personal finances.

Banking Apps

• Most financial institutions have their own apps for computers and smartphones.

Rocket Money

• Rocket Money is a budgeting app usable on computers and smartphones with both free and paid versions.

Empower

• Empower provides a free dashboard for budgeting, cash flow, and financial tools.

Credit Karma (Mint)

• Credit Karma provides credit scores, information on bank accounts and tax returns, and suggests loans and credit cards based on user information for free.

Every Dollar (by Ramsey)

• Every Dollar is a free and easy budgeting app for tracking money.

Venmo

• Venmo allows direct money transfers to other people.

Savology

• Savology is a free resource for creating a financial plan.

Insurance Needs

• Insurance protects your financial security and helps prepare for unexpected emergencies.
• An insurance policy is a contract between you and the insurance agency.

Health Insurance

• Health insurance covers health care costs, but policies vary in type and premium levels, often with specific medical providers or copays.

Life Insurance

• Life insurance pays beneficiaries a sum of money upon the policyholder's death, providing financial security for loved ones, and beneficiaries should be reviewed if life situations change.

Disability Insurance

• Disability insurance pays a portion of your income if you cannot work due to illness or injury, with the amount depending on the policy.

Car Insurance

• Car insurance is often state-required with varying levels covering vehicle repairs, medical expenses, and damage to other vehicles or property.

House Insurance

• Homeowner's insurance covers hazards to your home and property, including flooding, fire, explosion, wind, hail, theft, vandalism, and accidents causing injuries.

Cognitive Biases

• Cognitive biases influence our thinking, potentially leading to suboptimal financial decisions due to limited research.

Ambiguity Bias

• Ambiguity bias is preferring known risks over unknown risks, assuming missing information is negative.

Anchoring Bias

• Anchoring bias is being attached to the first piece of information received without considering alternatives, which sets a reference point.

Attention Bias

• Attention bias is paying attention to specific details while ignoring other information, such as focusing on the appearance of shoes and overlooking customer ratings.

Confirmation Bias

• Confirmation bias is taking in information that supports existing beliefs and ignoring contradictory information.

Herd Mentality/Groupthink/Mob Mentality Bias

• Herd mentality is going along with the group, such as purchasing a new product without reading reviews.

Halo Effect Bias

• Halo effect bias trusts the source of information due to the person's personality rather than the information's validity.

Ingroup Bias

• Ingroup bias is only listening to information from close contacts (family and friends), which can be harmful if they lack similar experiences.

Loss Aversion Bias

• Loss aversion bias is feeling the pain of losing more strongly than the pleasure of gaining; for example, feeling worse about losing $50 than you would feel good about gaining $50.

Overconfidence Bias

• Overconfidence bias trusts that one knows all the information and can make wise decisions without further research.

Recency Bias

• Recency bias is holding onto recently received information rather than reflecting on older information.

Sunk Cost Bias

• Sunk cost bias continues a decision due to costs already incurred, without looking at other options; an example is repairing a vehicle due to invested time, money, and effort.

Your Credit Score

• Financial institutions use your credit score to determine loan and credit card offers.
• A credit report includes:
  • Name and any alternate names
  • Current and former addresses
  • Birth date
  • Social Security number
  • Phone numbers
  • Credit accounts (type, credit limit, current balance, payment history, dates opened/closed, creditor name)
  • Collection details
  • Late or missed payments
  • Overdue child support
  • Public records (liens, foreclosures, bankruptcies, court judgments)
  • Inquiries (companies that have accessed your credit report)

Long-term Impact

• Credit scores impact loans, credit cards, housing (renting and owning), and retirement.
• Better scores yield better interest rates and maximum values.
• Low credit scores may lead to denial of loans and credit cards or higher interest rates.
• Good credit scores will pay less for their loans.