If you have ever applied for a home mortgage or checked a stock price while wearing pajamas, you know how important the Internet has become to personal finance.
New ways to manage money on the Internet are cropping up all the time as people continually take more responsibility for their personal finances. From opening savings accounts and paying bills to tracking retirement savings and plotting long-term investment strategies, consumers can look to the World Wide Web for solutions.
In this day of heightened security and identity theft, it may seem ridiculous to tout the Internet as a safe place for people to manage their finances, but more and more safeguards are put in place all the time, said Suzanne Olson, editor and spokesperson for IHateFinancialPlanning.com. People can feel confident conducting business on the Web.
Online banking is growing in popularity as consumers look for convenient ways to save time and money. They can access their accounts 24 hours a day, seven days a week, and may earn more interest on their savings than they would in a conventional bank. Online banks dont have to pay tellers or water plants in the lobby, and they pass that savings on to their customers by paying more interest, Olson said.
And then theres the business of applying for loans while still in your nightclothes. Its much more relaxing to check your credit report or fill out a loan application in the privacy of your own home than it is to meet a banker face to face, Olson said.
When exploring online banks, choose one that is FDIC-insured, which means deposits up to $100,000 will be guaranteed. Its the same protection customers at conventional banks receive.
You can also save time and postage by paying bills electronically. If youve ever mailed a payment at the last minute or incurred late fees on an overdue credit card bill, you might want to save yourself some stress by handling those tasks on your computer, Olson said.
Investment vehicles such as the individual retirement account (IRA) and employer-sponsored 401(k) retirement plan have forced individual investors to manage their own accounts. With this responsibility comes a need for knowledge, which is supplied by a growing number of Web sites that educate users with financial data, glossaries, current stock quotes, business news and much more.
The Internet doesnt replace the need for financial professionals, insurance agents or tax accountants, but consumers can do a lot of research before they ever sit down to discuss their financial needs with a professional, Olson said. And that research may also lead them to discover they want to rely more on themselves.
Web sites such as IHateFinancialPlanning.com can also be a resource for calculators, worksheets and other tools. There are calculators to figure all sorts of things, from whether you are saving enough for retirement to how long it will take you to pay off your debt, Olson said. Because calculators are so easy to use, anyone with Internet access can quickly solve their personal finance math problems and then set about to achieve the resulting goals.
Internet tools dont always have to be serious, according to Olson. Because our Web site appeals to procrastinators, weve created some fun tools too. Our change-one-thing calculator figures how much money you could save if you did one thing different, such as bring your lunch to work instead of eating out.