Last post, I recommended The Total Money Makeover book because it gave a clear plan on how to get out of debt and save money. I wanted to also share some of the tools we’ve been using to help track and invest our money.
First, for tracking purposes, we’ve been using Personal Capital because it’s free and we can use it online and as an app on our phones. This is a great tool to view all our spending and income in one place. It tracks net worth and makes things very transparent, which can be a good thing when you’re working hard to save (but it can also keep you accountable when you spend more than you thought!).
Second, for retirement, IRAs, and the kiddos’ 529 college savings plans, we use Vanguard. It’s amazing. It’s the cheapest and has the best returns. Devin thinks Vanguard’s founder, John Bogle, should win a nobel prize for creating index funds because of the money it saves investors.
Third, we’ve been using Betterment to invest the rest of our taxable savings. It’s a cheap, robo-investor. And they also do tax loss harvesting, which lowers our year-end taxes. It’s super easy to use and they have a smart deposit feature where you set your bank account balance and anything over that will be deposited into your Betterment account (great for the psychology of spending…the extra money won’t be there to spend so it’s less tempting). Also, they do a good job of closing the behavior gap, meaning Betterment decides when and what to buy and sell (people who try to follow the market and do it on their own can end up with 6 ½% less annually than the market because of bad decisions, impatience, fear, etc. Check out this article if you want more information).
Betterment does have a fee that’s more expensive than a company like Vanguard, but with the tax loss harvesting and automatic rebalancing, it makes their fee worth it many times over. If you want to sign up for Betterment, click here (you’ll get 6 months free for signing up and we’ll get 1 month free for referring…yay!).