John C. Fales
You're scared of financial planning, convinced you can't start to get your money in order without conquering a blizzard of forms or rummaging the bottom of your closet for lost records. What money moves do you put off because you fear the paperwork? Technology can help cut the stress of this vital process.
Situations that affect your financial road map can be as large as a life-threatening (or lifesaving, as we'll see) medical condition or the birth of a child, or as small as buying a new car or taking a family vacation. Technology helps you stay on top of both your plan and its ability to withstand change and stress.
Consider one of our clients who, before working with us, received news that he had a heart condition that would soon end his life. He considered his finances at that time and wanted to make them manageable for his loved ones.
This included his decision to continue renting, rather than buying a home. He lacked the money to pay for a home in full and knew that his survivors might face a torturous time sorting through a mortgage and other legalities after his death.
Then came news that he was a candidate for a risky surgery that might extend his life. Happily, the risk paid off and he no longer faced a life-threatening situation.
He suddenly again needed to plan for a life measured in years, not months. Around this time, he also inherited a large sum of money from a relative, re-igniting the question of whether to rent or buy.
Not knowing anymore what his financial state looked like with a longer life expectancy factored in, he decided to work with our firm's team to sort out his situation. Prepared for a long process to determine his financial position, he was surprised when the work took only a short time — with the help of financial planning software.
After inputting his information, which once would have generated stacks of paper, we quickly gave him an easy-to-read snapshot of his budget, accounts and goals. He also had the ability to test different financial inputs, including renting vs. purchasing a home.
Personal technology exists in many forms to make planning easier:
See a sample of online software to instantly test various scenarios, such as increasing your savings, factoring grants into educational expenses or making large purchases, at iTunes or GooglePlay for Android.
You can also buy many brands of software to handle your basic finances, often to bone up before appointments with an actual adviser.
To simplify filing, you can keep paper versions of wills, brokerage account records and other key documents in electronic format in the cloud, accessible from almost anywhere with an Internet connection. Online storage companies include familiar names such as Microsoft and Google.
If your financial life is straightforward, start record-keeping with an Excel spreadsheet. Slightly more sophisticated personal tools online include Mint and Quicken.
Whatever technology you use can take a lot of the fear out of planning.
John C. Fales is an adviser in Overland Park, Kan. He writes for AdviceIQ.