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The Money Scorecard: How Do You Rate?

Next Avenue — Sat, 30 Mar 2013 05:00:00 EST

By RICHARD EISENBERG

When Ed Koch was mayor of New York City, he loved to ask passers-by: "How'm I doing?!" We all want to know the answer to that question in our lives, too.

That's why Next Avenue is launching the series: "Next Avenue Scorecard: How Do You Rate?" We're starting with my area: Money.

Below you'll find the latest statistics for how Americans in their 40s, 50s and 60s are faring, on average, based on: net worth, income, savings and investments, and debt -- along with my two cents after each.

The good news I can report: According to a spanking new Fidelity Investments survey on retirement savings, individuals in their 40s, 50s and 60s are saving more for retirement these days than other age groups.

"We're seeing many midcareer investors taking advantage of catch-up contributions [extra money people 50 and older are allowed to put into retirement plans], which is encouraging because this can have a significant impact on reaching savings goals," says Ken Hevert, vice president of retirement products for Fidelity Investments.

On to the Next Avenue Money Scorecard:

NET WORTH

Median family net worth
Age 45 to 54: $117,900
Age 55 to 64: $179,400
Age 65 to 74: $206,700

(Source: Federal Reserve Survey of Consumer Finances, 2012)

My two cents I think net worth -- what you get when you subtract your household's debt from its assets -- is a somewhat meaningless number, since yours could look puny if you have a sizable mortgage, despite your savings. You can compare your net worth versus others with your income using the CNNMoney.com Net Worth: How Do You Stack Up? calculator.

INCOME

Median household income
Age 45 to 54: $63,861
Age 55 to 64: $55,937
Age 65 and older: $33,118

(Source: U.S. Census Bureau Current Population Survey, 2011)

My two cents As you can see, household income generally shrinks once you hit your mid 50s and plummets after 65 (many in that age group are retired). A clever calculator on the Payscale.com site lets you see how your salary compares with others in your field with your experience; you can also get a free customized salary report with career path predictions for your job and names of companies who hire people like you.

SAVINGS AND INVESTMENTS

Total savings/investments, workers age 45 to 54
Less than $10,000: 46%
$10,000 to $99,999: 26%
$100,000 to $249,999: 12%
$250,00 or more: 17%

Total savings/investments, workers age 55 +
Less than $10,000: 31%
$10,000 to $99,999: 29%
$100,000 to $249,999: 18%
$250,000 or more: 22%

Percentage of workers currently saving for retirement
Age 45 to 54: 57%
Age 55+: 66%

(Source: 2012 Retirement Confidence Survey, Employee Benefit Research Institute and Mathew Greenwald & Associates)

Percentage of families owning retirement accounts
Age 45 to 54: 60%
Age 55 to 64: 60%
Age 65 to 74: 49%

(Source: Federal Reserve Survey of Consumer Finances, 2012)

Average total contribution of workplace savings plan and IRA in 2012
Age 45 to 49: $11,077
Age 50 to 54: $12,880
Age 55 to 59: $13,360
Age 60 to 64: $12,867
Age 65 to 69: $12,505

(Source: Fidelity Investments 2013 survey of 999,000 individuals with IRA and 401(k) or 403(b) balances at Fidelity)

Percentage of households owning mutual funds
Age 45 to 54: 24%
Age 55 to 64: 21%
Age 65 or older: 18%

(Source: Investment Company Institute Characteristics of Mutual Fund Investors, 2012)

Percentage of families owning stocks (directly or in mutual funds/retirement accounts)
Age 45 to 54: 58%
Age 55 to 64: 60%
Age 65 to 74: 46%

Percentage of families owning bonds
Age 45 to 54: 1%
Age 55 to 64: 2%
Age 65 to 74: 3%

(Source: Federal Reserve Survey of Consumer Finances, 2012)

My two cents I'd be a cautious about taking too literally the dollar figures in the savings tables, because they're based on survey data rather than the entire U.S. population. Still, they'll give you a sense of whether you should pat yourself on the back, go into manic saving mode or something in between.

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For retirement saving guidance, Chris Farrell's Next Avenue article, "Money Rules of Thumb You Need to Follow (and Ignore!)" is recommended reading.

If you're in your 40s, 50s or mid-60s and don't have a retirement account, you're not only in the minority, you're endangering your financial future. Once you have an emergency savings fund, please either contribute to your employer's retirement fund or open an IRA.

There's still time to fund a 2012 IRA if you had earned income last year. The Next Avenue article, "Last Call to Get Your 2012 IRA," has the details.

DEBT

Percentage of families with mortgages on primary residences
Age 45 to 54: 60%
Age 55 to 64: 54%
Age 65 to 74: 41%

Median value of mortgages on primary residences
Age 45 to 54: $114,000
Age 55 to 64: $97,000
Age 65 to 74: $70,000

Percentage of families with installment loans
Age 45 to 54: 50%
Age 55 to 64: 41%
Age 65 to 74: 30%

Median value of installment loans
Age 45 to 54: $12,000
Age 55 to 64: $11,300
Age 65 to 74: $10,000

Percentage of families with credit card balances
Age 45 to 54: 46%
Age 55 to 64: 41%
Age 65 to 74: 32%

Median value of credit card balances
Age 45 to 54: $3,500
Age 55 to 64: $2,800
Age 65 to 74: $2,200

Percentage of families with debt payments past due 60 days or more
Age 45 to 54: 13%
Age 55 to 64: 8%
Age 65 to 74: 6%

(Source: Federal Reserve Survey of Consumer Finances, 2012)

My two cents I'm encouraged to see that Americans' debt loads drop as retirement nears. Making loan and credit card payments when you don't have a full-time income can be a bear.

That said, a full 41 percent of people 65 to 74 are still carrying a mortgage and those with installment loans (car loans, student loans and the like) owe $10,000, on average, which is pretty steep.

If you can pay off your home before retirement begins, do it. (As Forbes recently noted, Bankrate.com has a handy amortization calculator that can help you time your mortgage payoff to your retirement date.)

I bet that getting out of debt will make you a whole lot cheerier the next time you ask yourself, "How'm I doing?"

Photo Credit: Pat Carroll/NY Daily News Archive via Getty Images

Gallery: How A Family Of Four Manages To Live Well On Just $14,000 Per Year

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What an Online Game Can Teach You About Poverty

Next Avenue — Sun, 10 Mar 2013 23:00:00 EST

Filed under: Cost of Living, Savings Challenges

The challenge: You're a single parent who has lost your house and job and you've got $1,000 to your name. Play the game Spent. (Alamy)

By BARBARA BEDWAY

During an ice storm last month that kept U.S. Rep. David Price grounded at his home in his Durham, N.C., the 72-year-old Democratic legislator took 10 minutes out of his day to play Spent, an online game created by an unusual partnership in his district.

The game isn't about angry birds, but impoverished Americans - and the economic realities they face.

Game About Tough Realities of the Poor

The challenge: You're a single parent who has lost your house and job and you've got $1,000 to your name. Can you choose well enough among your limited options for housing, transportation, food and medical care to make it to the end of the month?

Spent requires you to deal with the wrenching choices Americans in poverty routinely encounter, from juggling expenses to figuring out whether you can afford to help an elderly parent buy life-saving medication.

In one scenario, you have two bills to pay, but only enough money for one. Do you ignore the other bill or swallow your pride and post a request to borrow money from friends on Facebook?

Millions Have Played

Since it went online in 2011, more than 2 million people have played Spent, a joint project of McKinney ad agency and Urban Ministries of Durham, which runs a homeless shelter that has housed more than 1,300 people in the past year. Schools and colleges also use the game in their curriculum and it has been integrated into some textbooks.

Spent is also featured in Pound Foolish, a new book by Helaine Olen about the failings of the personal finance industry to take into account the growing economic pressures on Americans in the last three decades.

Patrice Nelson, executive director of Urban Ministries, says the game was designed "to educate people to the fact that one missed paycheck, a car accident, a lack of health insurance, unemployment or having to take a job below your previous pay level can end up creating a scenario that you would never have imagined."

One Congressman's Experience

How did Representative Price do? Epic fail.

"I ran out of money in nine days," he says. His main budget buster: paying for health care. "Having a car accident didn't help," Price adds.

And, he noted, if the game had assumed the person was over 50, the results would have been even worse. "The cost of health care would have been astronomical," he says. "It would be a nonstarter."

Fiscal Cliffs, Over-50 Edition

Though Congress may have addressed its fiscal cliff, millions of poor Americans, especially older Americans, face their own fiscal cliffs daily.

As Next Avenue has reported, the biggest jump in U.S. poverty rates from 2001 to 2009 was among people 50 to 64, driven by layoffs and reduced salaries for those able to find work, according to research by Sudipto Banerjee of the Employee Benefit Research Institute.

The fact that most people in this group can't rely on Social Security and are too young to qualify for Medicare adds to their financial squeeze. (Poverty levels are highest for people 85 and older, in general, with soaring medical expenses taking up about one-fifth of their budgets.)

Inspiration for the Game

For most Americans, however, choosing between health care and a mortgage or rent payment is an unfamiliar experience.

That's what inspired Spent's co-creator Jenny Nicholson, a copywriter at McKinney, to use gaming and social media as a way of immersing players into a world she knows well. Raised by a single mother in California, Nicholson grew up in poverty and used her own experience, along with extensive case histories from the Durham Ministries, to sketch out realistic scenarios for the online game.

Nicholson says it's easy, though incorrect, for people who aren't impoverished to think those in poverty are looking for handouts. "It takes a tremendous amount of energy just to keep at square one and not fall back," she says.

The game's 30-day time frame makes Spent a little less than 100 percent realistic. All the disaster-generating scenarios players encounter generally wouldn't occur within a month. "But I've seen many happen within three months," Nelson says. "You'll find things start rippling out of control as financial disasters accumulate."

Educating Congress

There's now a petition to get members of Congress to play Spent; nearly 2,000 people have signed it. Price believes his fellow lawmakers should give the game a try.

"I think it would be a very good thing for members of Congress to play it, and legislators at the state level, too," he says. "It's a challenge to dramatize and get attention for these issues. Something like Spent really could help."

More from Next Avenue:
More Americans Are Entering Poverty as They Age
The Retirement Crisis Facing Blacks and Latinos
The Graying Population: One Gigantic Worry

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Chained CPI: How Washington Is Likely to Slice Social Security Benefits

Next Avenue — Tue, 18 Dec 2012 12:16:00 EST

Filed under: Retirement, Cost of Living, Inflation, U.S. Government

By Bob Rosenblatt

An arcane change to the way Social Security's annual Cost of Living Adjustments, or COLAs, are calculated may be part of a deficit reduction deal between President Barack Obama and Congress. The revision, known as the "chained CPI," could cut the size of Social Security recipients' benefits starting in 2014.

You could feel a financial pinch if COLAs get tweaked this way, especially if you're fortunate enough to live for decades in retirement.

Chained CPI and the Deficit

Deficit cutters like the idea of switching to the chained CPI because it would save the government an estimated $200 billion or so over 10 years.

In addition to reducing the growth in Social Security, the new math also would slow spending increases for many other federal outlays linked to inflation, like veterans benefits and government salaries, and bring in additional tax revenue because tax brackets are adjusted for inflation annually.

How Social Security Measures the Cost of Living

Here's a plain-English explanation of how Social Security's COLAs might change and what that would mean for you:

Social Security has provided annual cost-of-living increases tied to the inflation rate since 1975. Next year, beneficiaries will get a 1.7 percent increase in their benefits.

Currently, Social Security makes its inflation adjustments using the Consumer Price Index for urban wage and clerical workers, or CPI-W, which measures changes in the cost of a market basket of goods and services.

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The chained CPI, by contrast, assumes that people alter what they put in their shopping baskets due to price changes. For example, when beef becomes more expensive, Americans tend to eat less beef and buy more chicken, which is cheaper.

This calculation is designed to be "a closer approximation to a cost-of-living index than other CPI measures," according to the U.S. Bureau of Labor Statistics, which does not endorse one inflation measure over another because "different users have different needs."

Translation: Social Security's cost-of-living adjustments with the Chained CPI would reflect a lower inflation rate than the current CPI-W calculations.

How Much Benefits Could Shrink

The chained CPI would reduce the annual increase in Social Security checks by about 0.2 percent a year, compared with the current measurement, according to the Social Security Administration.

The National Women's Law Center, which opposes moving to the chained CPI because it will reduce future benefits, based on forecasts by Social Security economists. For example, a 65-year-old woman retiring after a lifetime of average earnings could see an 8 percent benefit cut by age 90, compared to what she would receive with the current inflation measure.

Why Women Could Be Most Affected

Switching to the chained CPI would be "especially painful for women," says a National Women's Law Center report, because they have longer life expectancies than men, rely more on income from Social Security and are "already more economically vulnerable." Women receive Social Security benefits three years and eight months longer than men, on average, according to the Social Security Administration.

Single black women would be especially affected, the group says, because they receive the smallest Social Security benefits, an average of $890 a month at 65. With the chained CPI, they might see their checks reduced by $45 a month at 80 and $70 a month by 90.

Because the focus on the national debt is so intense in Washington, and adjusting Social Security calculations is too wonky for many Americans to notice, you can probably figure that Congress and the president will adopt the chained CPI as part of a big budget deal.

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Donor-Advised Funds: A Timely, Tax-Wise Way to Give to Charity

Next Avenue — Wed, 12 Dec 2012 12:07:00 EST

Filed under: Taxes, Charity, Financial Services, Budgeting

By Gina Roberts-Grey

Time's running out to make tax-deductible charitable contributions for 2012. If you'd like to donate at least $5,000 before the end of the year, you may want to consider doing it through a donor-advised fund, which provides special tax bonuses, flexibility and anonymity.

DAFs are the fastest growing charitable vehicle in the United States, worth an estimated $43 billion, according to the National Philanthropic Trust.

(MORE: Creating a Charitable Foundation)

They've become especially popular lately, as fears have grown that Congress may restrict the charitable deduction for 2013, prompting some taxpayers to set up these accounts while they can still rely on the write-off. In a recent Wall Street Journal article, economist and philanthropist Irving Plotkin of Cambridge, Mass., said he has tripled his DAF donation so far this year and may donate even more before Jan. 1.

The one possible downside to setting up an account and donating this year for high-income taxpayers: Congress may increase your tax rates in 2013 without altering the charitable deduction -- which would make the DAF write-off more valuable next year than it will be this year.

The ABCs of DAFs

Here's how a donor-advised fund works:

You give your contribution to the DAF arm of a financial institution -- like Fidelity Charitable at Fidelity Investments, Schwab Charitable at Charles Schwab (SCHW) or Vanguard Charitable at Vanguard Group -- or an organization, like National Philanthropic Trust, that specializes in tailoring donations to charities and nonprofits. This sponsor invests your gift, which grows tax-free until you tell the institution where to send your "grant," says Jennifer Immel, a senior wealth planner with PNC Wealth Management in Naples, Fla.

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So, if you itemize deductions on your 2012 tax return, you can write off the amount of your grant, up to 50 percent of your adjusted gross income or 30 percent of income for appreciated investments. You can even delay a decision on which organization will ultimately get the money.

And here's a tax bonus: If you'll be donating stocks or mutual funds that have appreciated in value, you can get the full write-off on the donation, but avoid the capital gains tax by transferring the investment to your DAF, which will then sell and grant it. For example, if you sell $10,000 worth of stock and have a $5,000 capital gain, you can claim $10,000 as a deduction and won't owe taxes on your $5,000 profit.

A few other things you need to know about using a DAF for your charitable contributions:

o. It's easy to set up. The institution handles all the administrative duties and paperwork. "Things are so simplified for donors that you can make a single contribution to your DAF and then recommend as many grants to as many approved charities over as long a period as you have the funds," says Eileen Heisman, chief executive of the National Philanthropic Trust.

o. You can get help choosing organizations to support. Your DAF sponsor can vet potential charities for you. That can save you time and provide peace of mind that your donations will be used effectively.

o. DAFs are exempt from estate taxes. Donor-advised fund contributions are not subject to estate taxes or probate.

o. Your grants can be anonymous. This might come in handy if you want to avoid unwanted attention when making a large grant.

However, there are also a few disadvantages to donor-advised funds:

o. Account minimums Many institutions allow you to open a donor-advised fund with $5,000. Others, however, have a higher threshold. At Vanguard, a DAF account requires a minimum contribution of $25,000.

o. Strict limits on grant allocations You can't benefit from your own donations in any way. So, for example, you can't authorize a DAF grant to pay for tickets to a charity's fundraising event, Heisman says. The money also cannot be used to contribute to a political party or candidate.

o. DAF management fees The institution will charge an annual administration fee, often about 0.6 percent of the account's value.

Choosing a DAF

When selecting which of the roughly 750 large, charitable-fund sponsors you'd like to manage your DAF, Heisman suggests reviewing their policies regarding grant recommendations, minimum contributions, investment options, donor services and fees. "You also need to know whether you may transfer your donor-advised fund to another sponsor if you want to make a change," she says.

Once you've narrowed the field of DAF companies, call your final choices to ask questions and gauge your comfort level with their operation. You may also want to consult your attorney, estate planner, accountant or financial adviser before setting up a donor-advised fund, to be sure the strategy is advisable for you.

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Holiday Gifts That Give Back

Next Avenue — Mon, 10 Dec 2012 07:30:00 EST

By Stephanie Oswald

"World peace and an end to global poverty" might sound like the starry-eyed goals of a beauty pageant contestant, but there are old and new organizations that let you contribute to those causes while making someone in your life happy, too. And what better time to help improve conditions in the world than the holiday season?

Giving gifts that give back is a great way to do good in the world and "vote with your wallet." An added perk of non-material gifts is that you can show loved ones how much you care without adding more stuff to their homes.

Rather than yet another tie, vase or electronic gadget, you can pay tribute to someone's favorite park, plant a carbon-reducing tree in someone's name or finance a budding (but impoverished) entrepreneur on the other side of the planet.

Even one of the most well-known philanthropic organizations, Heifer International, has added a new program: Heifer at Hanukkah, providing gift options that encourage the Jewish principles of tzedakah (charity) and tikkun olam (world repair).

If you are someone who prioritizes humanitarian action, keep this guide handy for anyone asking what you would like to receive for the holidays. If it's important for you to give a wrapped present, you can always print out a card from the organization's website - but the power behind these gifts extends far beyond that. Helping others and knowing you're making a difference is truly sending joy to the world.

Gallery: Gifts That Give Back

Journalist Stephanie Oswald is a television host, travel and lifestyle expert and the editor-in-chief of Travelgirl.

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How More Women Can Become Philanthropists

Next Avenue — Thu, 18 Oct 2012 06:00:00 EST

Filed under: Personal Finance

By Kerry Hannon

Recently, my inbox and mailbox have been flooded with requests for year-end donations. My alma maters are holding out their plates, as are the local shelter for abused and homeless women and children, the food bank, public radio and others.

I don't give away a lot of money, but I do feel a genuine loyalty to the half dozen groups where I've donated or volunteered for years. While I don't consider myself a philanthropist, after attending a webinar run by the Women's Philanthropy Institute at the Center on Philanthropy at Indiana University, I realized that I actually am. And I came away believing that more women need to think of themselves as philanthropists and get more strategic in their giving so their donations will have the maximum impact. I'll show you how shortly.

Women Are More Generous Than Men

I suspect you already give away some money each year, even in a potluck sort of way. A recent Next Avenue article reported that boomers are more charitable than any other generation. And boomer women are more generous than men, according to a recent study by the Women's Philanthropy Institute.

As Debra J. Mesch, the author of the study, wrote in a Next Avenue article, research has found that "women tend to score higher on empathy and caring than men, factors that affect giving to charity. Similarly, women have been shown to be more altruistic than men, and their giving is frequently motivated by the desire to make a difference in peoples' lives."

That's why I give.

6 Ways to Become a Philanthropist

So how can you be more strategic in your generosity and make the biggest impact on groups and causes you care about? Here are six ways:

1. Give strategically. Instead of donating haphazardly, focus your giving on a few organizations and set a five-year philanthropic goal.

I earmark a certain percentage of my income - say, 8 to 10 percent - for my designated charities, like the American Society for the Prevention of Cruelty to Animals. But it's fine to start with 1 to 2 percent of your income. (If you have a job, check to see if your employer will match your charitable contributions for an even bigger bang.)

You might give to causes that directly impact your life, like breast cancer or Alzheimer's research. Or perhaps you'll want to help a group that's making a difference in your community, like a hospice or homeless shelter. Many people tithe to a faith-based group that jells with their religious beliefs.

Giving strategically has three advantages: You won't be distracted by charity solicitations that arrive unexpectedly, you won't spread your giving too thinly and the recipients will value your loyalty, perhaps even recognizing it (if you're agreeable). And there's a bonus: Knowing in advance who you'll be helping and how much you'll give will help you avoid the year-end mad scramble for deductible charitable contributions.

2. Do your research. Before making contributions, spend some time carefully learning how to become a philanthropist with an impact. You need to do your homework first, the same as if you were considering an investment in mutual funds or stocks.

Like investing, philanthropic giving is a process, says Patricia M. Annino, an estate planning authority and partner at the Boston law firm Prince Lobel.

There are droves of resources to help you ramp up your learning curve. I especially recommend visiting the site of the Washington Women's Foundation, a group whose mission is to "change the course of women's philanthropy through the power of collective giving." The site's Philanthropy Reading area has a deep list of helpful books, articles and links to other worthy sites.

3. Vet any charity before you make a gift. This will help ensure that the money you donate will be put to good use and not line the pockets of a nonprofit's executives.

You can check out charities at these three free watchdog websites: Charity Navigator, the Better Business Bureau's National Charity Report Index and Guidestar. If you want more information about large U.S. charities than these sites provide, send $3 to CharityWatch and you'll receive its Charity Rating Guide of roughly 600 groups.

MORE: How to Check Out a Charity Before You Give

4. Start or become a member of a giving circle. This is a group whose members pool their money to make grants to local organizations, realizing that one large contribution can be especially effective.

"Joining or creating a giving circle - also called a 'social investment club' - is a terrific way to connect with likeminded women to share ideas about how to make an immediate difference in your city or community, says Joanna Krotz, a women's philanthropy consultant and author of The Guide to Intelligent Giving.

Giving circle members choose the level of participation that's right for them. Some are happy to vote for grant candidates at the circle's annual meeting. Others prefer to visit applicant organizations. Still other circle participants seek board leadership positions at the groups that will receive the grants.

Many cities have women's giving circles and you don't need an invitation to join one.

My sister, Pat, recently became a member of Impact100 Philadelphia. At this giving circle, at least 100 women in Philly donate $1,000 each and pool their contributions to make one or more $100,000 grants annually to nonprofits they collectively choose. (The model comes from the original Impact100 group in Cincinnati, which has donated nearly $2 million.)

At the Washington Women's Foundation, where I live, more than 500 women contribute $2,500 apiece each year, making annual grants totalling nearly $1 million.

5. Invest through a donor-advised fund. Think of this as your own private foundation. A donor-advised fund lets you create a charitable account - at least $5,000 to $25,000, typically - through a financial services firm, like a mutual fund or brokerage. You distribute grants to charities of your choice under an umbrella name, like the Smith Family Fund, and can avoid the costs and hassles of creating a foundation.

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A donor-advised fund gives you an immediate charitable deduction. If you'll be donating securities that have appreciated in value, you won't owe the capital gains taxes that would be due if you sold the stock and donated the proceeds, and your deduction will be larger this way, too. Some donors set up the funds as legacies, with the expectation that the next generation of their family will distribute the money in years to come as they see fit, says Christine Fahlund, a senior financial planner at T. Rowe Price in Baltimore.

You'll want to consult a financial adviser before setting up a donor-advised fund.

6. Give more than money. "Don't just write a check to a local nonprofit," says Jackie Norris, executive director of the Points of Light Corporate Institute, part of the national volunteering group, Points of Light. "When you do that, you are delegating to the group all responsibility for devising and implementing solutions to social problems."

Instead, Norris says, think about playing a bigger role. Can you serve on the group's board? Volunteer there regularly? Offer your skills to help the nonprofit do its job more effectively and efficiently? By donating your time and expertise, you can be a philanthropist of the highest order.

More from Next Avenue
Hey, Girlfriend: Let's Talk About Money
Boomer Women Give More to Charity Than Men
Creating a Charitable Foundation

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The Problem with Personal Financial Management Tools

Next Avenue — Tue, 16 Oct 2012 10:50:00 EST

Filed under: Personal Finance, iPad

Richard Eisenberg

You'd think that the Internet and mobile apps would be fantastic ways to help people manage their money. So why do so few of us in our 50s and 60s take advantage of personal financial management online and mobile tools from banks, credit unions and tech companies?

Only 16 percent of boomers use these types of tools (compared with 44 percent of Gen Yers), according to a new survey of 1,115 consumers by Aite Group, a financial services research and advisory firm. Half of the users of Mint.com, the big gorilla in the personal financial management world, are 25 to 34 and rent their homes, suggesting to me that boomers aren't big Minters.

Why These Tools Should Be Helpful

And yet our generation generally has far more in assets and more complicated financial lives than people in their late 20s and early 30s. "Between checking accounts, savings accounts, 529s for the kids' or grandkids' college costs, 401(k)s, stocks and bonds, that's a lot of information to keep track of," says John Breyault, vice president of public policy at National Consumers League, which recently played host to an online chat about these tools with Chase Blueprint.

So wouldn't it make sense that we'd be manic users of websites like Mint and Yodlee, software programs like Quicken and the latest money apps to manage our finances? As Sally Greenberg, executive director of the National Consumers League, says: "Personal financial management tools give consumers a powerful way to keep track of multiple credit cards and their bank and retirement accounts."

But most boomers don't. Is it us or is it them (the financial institutions and other tool creators)?

Turns out, it's a little of both.

Little Interest in Money Management

As much as it pains me to say this, many of us aren't interested in managing our money. Only about 10 percent of boomers are "highly engaged in their financial lives," says Ron Shevlin, author of the Aite Group report. Truth is, money management can be a time-consuming chore and sometimes confusing.

It stands to reason, then, that if you're a midlifer with a passel of 401(k) accounts, IRAs, mutual funds, bank accounts, credit cards and loans, you can be easily turned off by the thought of laboriously inputting all that data into a program that may or may not be helpful. (If you've ever tried to type your portfolio into an iPad, you know what I'm talking about. )

MORE: Are You Saving Enough For Retirement?

And yet, people who make the effort to use personal financial management tools often change their habits as a result, shoring up their finances.

Phil Christian, general manager of Chase Freedom, said at the online chat that his company's Chase Blueprint users are more likely to pay down their credit-card balances faster, pay bills on time and save on interest charges than bank customers in general.

The Disappointment of the Money Management Tools

After attending that online chat, I came away thinking that the money tools have largely been a huge disappointment.

They're fine for letting you know what you've got, which is why they're especially popular with young people trying to budget for the first time. But they're not so great if you're trying to figure out what to do about your money.

"Just having all the information in one place and presented in an appealing way doesn't necessarily help someone make better decisions," Breyault says.

I'm not a huge Suze Orman fan, but I believe personal financial management sites and apps could take a page out of her book.

They ought to tell users things like: Can I really afford that? Better still, they should be offering more personalized guidance and advice on investing and financial planning. (A few are starting; I just blogged about one instructive site that shows you how to manage your debt better, Credit Sesame.)

"PFM makers say, 'We'll help you and empower you,' but their tools don't really do that," Shevlin said at the online chat. His report claimed that more than 10 years after financial institutions began implementing these types of websites, "the promise of PFM has yet to be realized."

Shevlin thinks these tools will only catch on if they offer "strong advice capabilities." Two he says that do this well: BillShrink.com, which analyzes your credit card, wireless and TV bills and recommends alternatives (it's parent company is Truaxis) and Billguard, which spots fraud charges on your credit- and debit-card bills.

Fears About Privacy

Privacy concerns are another reason many of us don't use these money-management tools. Laying bare the details of all your holdings in one place is a scary thought, since it would only take one shrewd hacker to get his grubby hands on the data and wreak havoc.

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"If you don't guard your password carefully, someone else can get all of your financial information," Linda Sherry, director of national priorities for the advocacy group Consumer Action, said in the online chat. "I've read that one bank is thinking of letting you use Facebook to log into its PFM. That sets off a lot of alarms to me."

And how will you get hold of all the info you've stored, Breyault asks, if the hot new PFM startup you're using isn't around next year?

A Boon for Lower-Income Americans

Done right, personal financial management tools could be especially useful for low-income Americans, particularly the elderly. These are exactly the types of people who can't afford to make big money mistakes.

I was heartened to see that in the U.S. Treasury Department's MyMoneyAppUp Design Challenge -- a competition to find the best new mobile app ideas and designs to help Americans make smart financial choices -- one of the winners was MOOLAH, specifically aimed to assist lower-income households.

The brainchild of Pamela Chan and Eric Tyler - policy analysts for the New America Foundation, a nonpartisan think tank - MOOLAH would let users create budgets and recommend related social services and financial products. I'm hoping the $5,000 prize will help Chan and Tyler get MOOLAH on the market.

How to Get Started

If you haven't yet used a personal financial management site or app but are thinking of trying one, Breyault recommends taking baby steps.

"Start small and see if the PFM actually helps you," he says. "Maybe try tracking one or two of your financial accounts for a month. If it helps you save time, then consider adding some more. I would advise someone with multiple accounts - which folks in their 50s and 60s often have - from loading up their entire financial portfolio into a PFM without test-driving it first."

Otherwise, you could find yourself with a bottle of migraine medicine, wondering whether PFM actually stands for Poor Friggin' Me.

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4 Great New Tools to Manage Your Money

Next Avenue — Wed, 03 Oct 2012 06:00:00 EST

Filed under: Technology, Family Money, Personal Finance

By Richard Eisenberg

I know that managing your money isn't easy, and it's generally not much fun. But I've just learned about four new tech tools for your computer and smartphone that can relieve the pain. Better yet, they can help you cut debt, access records smoothly and securely, or assist a family member in a financial jam.

I discovered the tools at Finovate, an annual financial-technology trade show in New York City, where dozens of entrepreneurs demonstrate their offerings to prospective customers, investors and the media.

(MORE: Technology Buying Guide for First-Time Users)

Here are my favorites:

Gallery: 4 Great New Tools to Manage Your Money

Richard Eisenberg is the Senior Web Editor of the Money & Security and Work & Purpose channels of Next Avenue. Follow Richard on Twitter @richeis315.

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