One thing all financially savvy people have in common is that they have a good handle on their money. They know how much they are worth, what they spend each month and where their money is going. They have savings goals and they understand their debt commitments.
This type of awareness requires time and dedication, but thanks to some smart technology from an international company called Yodlee, there are now several South African based money management tools available online that automatically collate all your bank accounts, debit cards and credit cards pulling them into one spreadsheet.
You can then analyse the information, see where you are overspending, where you can save money and also set budgets and savings goals.
How they operate
- You need to create your profile and provide your banking login details. The system then downloads your bank statements and categorizes your spending for you.
- Although the sites automatically categorize your transactions you may want to have different categories or categorize merchants differently. For example Woolworths may fall under groceries or clothing depending on how you shop. So you need to spend some time organizing your categories according to your spending.
- Once you have specified a specific merchant into a category the site will remember your selection and continue to allocate spending from that merchant into that category so you don’t have to update it each month.
- You are able to set budgets on each category and track how much of that budget you have used
- Family members’ accounts can also be linked onto the same dashboard, assisting families to budget and plan for their future
22seven was the first online money management tool to launch in South Africa in February this year. CEO Christo Davel insists that this is not simply a budgeting tool but a way for customers to improve their overall money management by providing a holistic view of your money situation by showing how much you spend, how much you owe, how much you can still borrow and how much you save.
22seven uses Yodlee technology to interact with all the banks as well as Woolworths card, Edgars card and Discovery card, Kulula and VirginMoney allowing automatic downloading of your transactional information. Davel says as demand increases for other store cards these will be added to the tool.
The site charges a monthly admin fee of R70 per month which Davel says allows the site to maintain its independence as the only form of revenue will be the monthly administration fee so the site must deliver value to the user. Although the next phase will assist people in how to save, Davel says the site will not promote specific products in order to generate a revenue stream.
There is a 30 day free trial period so you can test out the tool before committing to it. The latest version now allows you to split transactions into different categories, for example if you drew cash and used some for petrol and some for eating out, you can allocate accordingly.
Currently 22seven is only available on your computer but there are plans to launch an App for Smart phones and Ipads.
There is no fee to use Moneysmart but the site makes its money through selling investment and savings products. It is effectively an online financial advisory practise run by MoneySmart CEO Tobie van Zyl where he aims to “shift control of your finances back to you”.
Apart from a full budgeting tool, the programme allows users to create savings goals and set a date to achieve those goals. It will recommend a product where you can save. In the goal-setting section users are able to upload the picture of what they are saving for, for example a picture of their dream car, the holiday they’d like to go to or their dream home. The aim is to help users stay motivated to save for that goal by putting it in front of their eyes.
Users can create an anonymous account if they do not want to use their real names. There’s also a live chat when you log in if you need help with organising your profile.
Nedbank is the first bank to go live with a money management tool that captures information beyond your bank account including credit cards and store cards. MyFinancialLife will be available to both Nedbank and non-Nedbank customers.
Like the other Yodlee backed sites you will be able to collate your financial statements and have an overview of your net worth. You will be able to analyse your spending behaviour and set budgets as well as savings goals.
Nedbank has taken the budgeting and savings goal one step further by setting SMS alerts. You can, for instance, set up alerts when 50% of your allowed credit card limit has been reached or when you have exceeded a budgeted amount.
It will also provide a “calendar view” allowing you to track debit orders against payments that need to be made, making it easy to view weekly, monthly or yearly transactions, ensuring that you have always planned to have sufficient funds available.
Additional products such as online share trading accounts, retirement annuities, pension funds, unit trust investments and air miles are to be made available after the initial launch. MyFinancialLife aims to provide updates reminding you of what you need for your retirement, how your investments are performing, how much you still need to save based on different retirement ages and a quick right click for some investment options.
This core functionality will be available to Nedbank and non-Nedbank clients at no cost. Future additional value added functionality may be priced separately, as these become available.
MoneySmart, 22seven and MyFinancialLife are all powered by Yodlee, a US based company specializing in money management software which currently has 30 million customers and is used by eight of the top ten financial institutions in the US. The software interfaces with your bank account and draws down the information in real time. You are required to provide your banking login details which may raise security concerns, but the fact that Nedbank, one of South Africa’s top four banks, has utilized the software for their financial tool provides some peace of mind. The software has read only access and cannot transact on your account. As an added precaution, FNB banking customers are required to create a secondary “read-only” banking profile when utilizing this technology. For users who are uncomfortable about providing their login details, you can upload statements manually via CSV programme.
This article first appeared in City Press