Financial tools are pretty much anything you can apply to your finances to shape them in a way that assists you in hitting your financial goals.
Today, these types of tools exist in abundance. And that’s a good thing, because there are also an abundance of modern asset types that are making our portfolios more diverse (awesome!) but, at the same time, more difficult to monitor (not so awesome).
Let us help you with the overwhelm.
First, we’ll run through all the reasons you really should be thinking about financial tools in 2022 and beyond.
Then, we’ll deliver the goods: our fave tools that can be used in any combination to help diverse, modern investors achieve results.
Why Should I be Shopping for Financial Tools?
Financial tools are a lot like any other tool — their primary purpose is to magnify your efforts so you can get a job done faster.
In this section, we’ll help you see precisely how financial tools can assist you in your financial efforts.
To Grow Your Wealth
There are really two main approaches to growing your wealth. You can either generate more income, which is only doable to a certain degree for most people. Or, you can put your money to work by investing it in different ways to generate interest, earn dividends, and so on.
Investing and advising platforms are tools that can help you put your money in the right place while financial management software can help you keep an eye on that money so you can actively control it in a way that grows your wealth.
To Track Total Net Worth
Net worth is the sum of the value of your assets, less the value of your liabilities.
Assets are things you own, like cash, brokerage accounts, real estate, valuables, domain names, NFTs, and so on. Liabilities are debts, such as mortgages, student loans, credit card balances, and such.
Tracking net worth is important because it’s a singular metric that can be used to monitor your overall financial health. You can compare your net worth to some common benchmarks, but of course numbers will vary widely depending on income level, investment style, and so on. A more important comparison when it comes to net worth is your own past net worth. Generally speaking, you want this number to increase over time.
But how will you know what that number is — and that it’s moving in the right direction? This is a job for financial tools such as net worth calculators and, better yet, net worth trackers.
To Gain Asset Visibility
Growing your portfolio in value often requires growing your variety of assets, as well. Today, many of those assets can even be digital. And since digital assets are intangible and often scattered across different online portals, they can be especially hard to remember and keep track of. With a portfolio tracking program, you can be sure you’re seeing and managing all of your assets regularly and effectively — which should help protect you from losses and increase your net worth.
To Set Realistic Budgets and Goals
Always seem to be spending way ahead of your budget and running way behind on your financial goals?
That’s not your fault, that just means you haven’t set your budget and goals using the best information! To get the insight you need to create realistic objectives that you can actually hit, a tool that gives you insight into your spending habits, such as a budgeting tool, is key.
To Diversify Effectively
Portfolio diversification refers to the practice of adding a variety of assets of different types and from different classes to a single portfolio.
Why? Because uncorrelated assets that aren’t influenced by the same factors don’t perform in the same way. So, for example, while stock assets will be affected by a big stock market downturn, real estate assets won’t be. This is how diversification can diffuse the risk of loss while continuing to earn returns throughout fluctuations.
Diverse portfolios, over time, typically experience lower risk and generate higher returns.
While diversification is an elemental investing practice, it can be difficult to decide where is the best place to invest next when all of your assets aren’t already laid out in front of you. This is another job for which a portfolio tracking and management platform is perfect. And if you’re interested in automation, sprinkling in a robo-advisor tool that can invest in ideal assets on your behalf is another great way to pursue diversification.
To Plan for the Future of Your Wealth
Since you’re reading this, we already assume you’re a bit of a planner. And that’s great, because the biggest and best achievements typically arrive at the end of a well-constructed plan.
Wealth planning tools typically combine portfolio tracking features, artificial intelligence, and sometimes even human intervention to provide investment advice, portfolio growth plans, scenarios for dealing with different financial emergencies and situations, and so on.
5 Helpful Financial Management Tools You Should Try in 2022
Ready to diversify, get a better view of your assets, finally understand your net worth, create a steadfast plan for your future, and beyond?
Here are five cool financial tools we recommend you check out to enrich your financial life.
Personal Balance Sheet Software: Kubera
A balance sheet is something a business typically uses to track assets and liabilities to ensure they aren’t overspending and will be able to meet all financial commitments.
Sounds super helpful, right?
That’s what we thought, too. And that’s why we created Kubera.
Kubera is personal balance sheet software with an extremely easy-to-use interface that mimics an Excel spreadsheet. We built it this way to make it practically instinctual to use to track your liabilities, debts, and total net worth.
The Kubera platform does this by integrating with various financial aggregators that keep most account-based assets (bank accounts, stock accounts, crypto accounts, and so on) up to date. For those assets that aren’t attached to an account (family heirlooms, artwork, physical gold stores, etc.), Kubera’s modern layout makes it easy to add and keep all the necessary details up to date.
With all your assets in plain sight in Kubera’s wealth tracker, you’ll be better prepared to diversify wisely. And what’s more is how easy we make it to see and track net worth.
Just turn to our recap view, which uses all of your financial data to automatically display a complete picture of asset allocation, asset performance, and overall net worth.
But what if you want to see the return on specific assets?
We can do that, too.
Kubera is able to find the internal rate of return (IRR is similar to ROI, with time added in) for any asset — in your ideal Fiat currency!
Your assets just have to have all the pertinent details: purchase price, current value, and cash flow in and out. Kubera will add in the holding time and automatically surface IRR.
And on top of your own assets’ IRRs, Kubera displays the performance of common indices and cryptocurrencies (like the S&P 500 and Bitcoin). This enables you to see, right inside Kubera, how your investment choices compare to the “norm” and if it’s time for you to ditch or double-down on your chosen assets.
Read this help center article to learn more about using Kubera to find IRR on assets.
Visit our how Kubera works page to learn more about our personal balance sheet features. And when you're done there, come back here and we’ll keep exploring more exciting financial tools!
Compound Interest Calculator: NerdWallet
Compound interest is the interest on a loan or deposit based on both the initial investment as well as the existing interest. Putting money into assets that generate compound interest — such as real estate investment trusts and bonds, for example — can help you up your return rate with little effort.
To figure out which assets will generate the best returns, try a compound interest calculator. It’s a basic financial planning tool, but it can be powerful in how it helps you understand each asset’s impact on your net worth and set accurate goals based on reliable predictions.
Digital Financial Planning Helper: WealthTrace
WealthTrace offers solutions for both financial advisors and individuals. For individual investors, WealthTrace’s features aid in digital financial planning.
With WealthTrace, individuals can create savings goals and generate budgets that help them meet these goals, build plans around saving for events like retirement, review life insurance needs, run scenarios on how their portfolios would be impacted by things like market swings, and even get advice on minimizing tax liabilities.
While this financial tool is pretty much self-guided, WealthTrace does have support professionals on call who users can reach out to.
Budgeting and Expense Tracking: Wally
Wally is just as friendly as it sounds for individuals who are looking for a financial tool with budgeting chops!
Wally is a personal finance application that provides “financial clarity and control” in their own words.
With Wally, users can track accounts (including savings, checking, credit card, and even loan accounts) to monitor spending, schedule bill pay, and construct a realistic budget that takes into account spending across these bills and accounts. Wally is available around the world and compatible with many financial institutions, and it can even track shared accounts to create household-wide financial plans and goals.
Tax Preparation and Filing: TaxSlayer
We’ll round out our list with most people’s least-favorite financial topic: taxes.
There are many tax preparation financial tools on the market that help users complete and file their tax returns every year.
We wanted to highlight TaxSlayer in particular because of its pricing model. With TaxSlayer, you pay based on how much support you want, not based on how much money you’ve earned, or which arbitrary features the company decided to bundle together. That means that with TaxSlayer, everyone gets all the same forms and features. YOu only pay more if you decide you need help throughout the process.
TaxSlayer has a modern interface, makes it easy to switch from your previous tax preparation provider, has a feature for importing tax documentation, and can be accessed from various digital devices.
Shape Your Finances With Our Fave Financial Tools of 2022
Financial tools are pivotal to your financial health as well as your overall future.
If you don’t already have everything you need in place to set and achieve your financial goals, 2022 is your year to get in gear.
Kick off your financial revolution with Kubera. It’s easy to use, affordable to get started, and can absolutely be used alongside any financial advisors, wealth managers, or other professionals with whom you’re already engaged.