AS A DOCTORAL STUDENI IN SOCIAL WORK AT THE University of Alabama, Shani K. Collins was struggling to make the most of her part-time income when she read an article about Mint.com, the online financial management tool. "I was not as disciplined about budgeting as I should have been," the 31-year-old admits. But after a few months of using the tool to track her spending, "I saw that I was spending 11% of my income eating out." Determined to make wiser choices about her money, Collins tracked her budget and cut her dining out expenses by four percentage points. A part-time adjunct instructor at the University of Alabama and Shelton State Community College, Collins has also become more knowledgeable about finances in general thanks to the tips on money management that Mint.com provides. "More than anything, I became aware of areas I'm weak in and how to improve."
One advantage of using online management tools is that they allow you to more efficiently track your finances, says Lynnette Khalfani-Cox, co-founder of the free financial advice site AskTheMoneyCoach.com. "A lot of people manage their finances haphazardly," she says. Online money management tools give you one place to record and monitor all your information, and you can access them wherever there's a Web browser. Some offer mobile apps, so you can keep up with your finances on the go, Khalfani-Cox adds.
Online money management tools can also help you avoid racking up late charges. "A lot of people who make late payments do it because they simply forget," says Karen Carlson, director of education for InCharge Debt Solutions, a credit counseling organization in Orlando, Florida. Online money management tools typically offer e-mail and text message alerts to remind you of upcoming bills or tell you you're going over budget. "We don't think about our personal finances 24 hours a day, but we want to be thinking about them when we're $25 away from overdrawing our checking account, and that's what these tools offer," Carlson says.
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If your goal is debt management, try SavvyMoney. The site recommends the debt-stacking method, in which you focus on the debt with the highest interest rate first, and then pay the debt with the next highest interest rate, and so on. The site also provides a to-do list and payment reminders and suggestions that can help you get out...