Digital Finances

Seattle continues to surprise me with cool companies that add value to existing services and make the Internet more interesting. In this case, I’m referring to PayScale, a company that surveys people about what they do for a living to get a better idea of what people are making in jobs around the world. On one hand, you might be thinking, why would I tell a site how much I make? On the other hand, you get a better idea of what people working in similar positions are making, assuming everyone provides reasonably accurate data. The next time you decide to change jobs, or when you’re negotiating a raise, you can get a feel for what other people in your field are making to get a better idea of what you’re worth. We recently posted an interview with PayScale’s founder, which offers more detail on how the service works and why it might be useful to you.
While we’re on the subject of financial advice, it’s been interesting to see all the talk about Paul Farrell of MarketWatch quite seriously suggesting that Scott Adam’s 9-point formula for financial success is something worthy of the Nobel Prize in economics. While I’m not sure this is prize worthy stuff, it’s definitely good common sense material for anyone trying to keep their financial house in order over the long haul.
1) Make a will
2) Pay off your credit cards
3) Get term life insurance if you have a family to support
4) Fund your 401k to the maximum
5) Fund your IRA to the maximum
6) Buy a house if you want to live in a house and can afford it
7) Put six months worth of expenses in a money-market account
8) Take whatever money is left over and invest 70% in a stock index fund and 30% in a bond fund through any discount broker and never touch it until retirement
9) If any of this confuses you, or you have something special going on (retirement, college planning, tax issues), hire a fee-based financial planner, not one who charges a percentage of your portfolio
I’d add a number 10 here that says something along the line of:
10) Use tools to help keep track of where you’re at so you can measure the successes in paying off your credit cards. Organize your bills and pay them in a timely fashion. And have a snapshot of where you are at any given time.
Free Accounting Software is a great app for tracking finances. Most banks and credit unions offer free online bill payments, which makes payments convenient. I’m a diehard Outlook users, but if I needed an new system for reminders, EssentialPIM would top my list.