In this episode of Good Cents, we dive deep into the world of financial apps and uncover the strategies and tips you need to leverage them effectively to reach your financial goals. Our expert guest, Bobby Lee, is a seasoned consumer advocate and financial counselor. He shares invaluable insights on selecting the right apps, setting achievable goals, and creating a personalized financial app strategy based on your unique situation. Whether you’re aiming to save for a big purchase, build an emergency fund, or invest for retirement, this episode is your key to understanding the full potential of financial apps to unlock your financial success.
Here’s the recap of today’s 15-minute episode:
Listen below or read the transcript that follows.
Here’s a quick and friendly reminder that today’s episode is not financial or legal advice and should be considered for entertainment purposes only. Thank you.
Hello friends. Welcome back to the Payactiv podcast. As always, I am your host, Eric Rosenberg, and today we have a really fun topic to talk about at the beginning of the year, that is financial management apps and how to stay safe when using those apps online. So, there’s a lot of different apps out there and we know if you use the Payactiv app, we have some really cool budgeting and automatic savings features built in, but there’s a wide range of other apps you can use to supplement Payactiv and improve your finances. That includes budgeting apps, credit score monitoring apps, investment monitoring apps, and a whole lot more.
And today’s guest is an expert in financial technology or fintech as we like to call it. His name is Bobby Lee. He’s based in the Bay Area, where many of these financial innovations are coming from, and that’s also the area where Payactiv is headquartered. So, shout out to the Bay Area. And I am excited to chat with Bobby all about financial apps and how he uses them and what he looks for. And then, a quick wrap up talking about financial security, why these apps are safe and how to stay safe online when using your financial apps. So, let’s dive in with Bobby Lee.
I’ve known him a long time through the FinCon community. We’ve conferenced together and talked all about money and budgeting and he runs the fintech competition every year at that conference. So, he’s one of the top experts I know in financial technology and money apps, and I’m so excited to have him on the show.
I’m so excited to be here. Thanks for having me on, Eric.
Yeah. So, what are your top tips on the way you think about choosing financial apps? How do you decide what kind of financial app you might want to use when you’re thinking about your money?
Number one, at the top of the list is usability. If you’re not going to click on an app icon and open it up on a regular basis, if you’re not enjoying the way the information is presented, and if you’re not going to be able to use it because let’s say the menu is counterintuitive, you’re just not going to use it. There’s no point. You’re sort of back to square one when you didn’t have a budgeting or finance app. So, that’s far and away the biggest thing that I look for, is a good app that has a great layout, that has intuitive menus, and that you’re going to be able to use on a day-to-day basis.
Easy to use is so important. I know when I think about my mom, her phone and her computer use, if there was a financial app that was only on the computer, she’d probably never use it, but if it’s on her phone, she’ll probably use it once in a while. And I know me, I’m a super money nerd, so I check mine multiple times a day, but that’s just me.
So, when you find one that’s easy to use, that meets the style you like, and I know there’s a handful of good budgeting tools out there, we have some built into the Payactiv app for free for our users, there’s some more advanced ones out there as well, what are the biggest financial features you look for that help you think about your money in a better way?
Yeah. One of the things that I look for is a real-time connection to your bank account. Now, we’re all used to seeing our bank accounts reconcile in the evening. This is when all your transactions and everything, all the deposits, all the withdrawals come through and they’re cleared for the evening, but you still need that connection to your bank account to know what’s happening, because if you have to manually enter that information, let’s be honest here, I don’t think anybody still reconciles their bank account manually. Well, if you do, you get kudos from all of us, but-
I remember balancing a checkbook, but it’s been a long time.
Oh, yes. I just found an old blank checkbook register in the drawer somewhere. I’m like, “Oh, my gosh, those were the days.” So, that’s a big thing. You’re going to want to look for that realtime connection to pull that information in, and there’s different styles and different ways that apps do that. We can get into that a little bit later in this episode.
So, I know for me, that live financial data connection is so helpful. I’m married, so my wife has cards, I have cards, and all of our credit cards we use, we pay them off in full every month, but we use them to earn those rewards. And we have a shared checking account with debit cards attached. We actually have two checking accounts because we’re complicated people. So, having the ability to click a button and see even when my wife went to the grocery store in the morning or if I went and filled up the car, I’ll see those charges right away and I’ll know that money’s gone, so I won’t accidentally try to spend it.
Exactly. And that’s the thing, with these budgeting apps, traditionally, if you think about how, say 20 years ago, when you had just Quicken on the market and you had these pieces of software, it’s something that you’d have to sit down and think through and analyze and reconcile maybe once a week, once a month. But now with apps on our phone, with real time connections, with AI, you now have the ability to have more intuitively laid out, better operating apps that keep you up to date in real time.
And you’re right, that example, did my spouse spend that extra $50 in the account on something and what was it spent for, and not to sound creepy about it, but in an ideal situation, you’re communicating about that, especially when you’re in a shared bank account where maybe you have a more limited balance.
Yeah, I’m not Big Brother watching all of her transactions. If you’re listening, honey, I don’t do that. But I do keep track of our accounts. That’s part of the job at our house that I took on.
So for me, when I look at a financial app, if I want something more holistic, not just looking at my basic spending, to me, I think the most important features are automatic categorizing of transactions into budget categories because that takes it a step beyond just what we spent to help me know what did I spend on restaurants, what did we spend on our kids’ schools, what did we spend on any different kind of thing, because I want to keep certain categories under control.
But when we’re looking beyond budgeting, there’s other financial parts of our lives, like hopefully we’re investing, maybe saving for retirement, putting money away for other things. Beyond budgeting, what are the key things you would want to see in a financial app?
Credit is such a big piece of how we live today, and it could be just as simple as trying to open a credit card or maintaining a credit card, but many folks could be on a different journey towards home ownership, towards remodeling their home. And there’s so many different facets and ways you can be going on that journey. Credit is oftentimes the biggest struggle for most folks.
So, I want to be able to see in the app set that I use, I want to be able to see that I can access all three credit bureaus to see all of their credit information and credit scores. I want to see what kind of scores they’re giving me. I want to see some recommendations around how I can improve my credit. And that’s just one facet of what a good financial app should offer in addition to the budgeting and frankly many other aspects of helping to improve your financial life.
Yeah, I know, I’ve been checking my credit score online for a long time and I’ve used… There’s a few good apps that are free that give you that snapshot of your credit score, and a lot of banks do that too. So you might not necessarily need it in a separate app. It might be in your bank’s app if you already have one of those. You can go in and see the credit score they use when deciding if they’re going to give you a new credit card or a car loan or something like that.
But if you want to look for outside apps, I’ll give a shout-out to Experian. Experian has a free app you can use, and they’re one of the three main credit bureaus. You can get your credit score right there. They send you a lot of emails to try to get you to upgrade to paid products, which I was not interested in, but I like getting my credit score for free. So, thanks to them for offering that. It’s pretty cool.
Yeah, Experian has been one of the leaders in this space, and you may have seen their television ads talking about a new Experian credit boost score, for example. There’s innovation happening in this space, new products, new ideas that they’re coming to the market each and every month. And what’s important to know with these apps for the credit bureaus, with the credit scores, with credit information, is to really understand the basics. What does it mean, what’s in my credit report, what does the score mean and how does it apply to say when I’m looking for a loan. These are things that are a little bit beyond the scope of what a typical app will inform you on, but this is great stuff to look up if you’re going down that path of home ownership or taking out a loan, to really understand the sort of next level concepts and definitions and terms and ideas, but definitely approach all of these new apps and all these new products with a very careful lens to understand what it does in your situation.
Yeah, totally. Another area that I like to look at is loans and investments, which I say those together because they’re both kind of long-term. We’re hopefully paying our credit cards off in full every month by the due date, so that’s short-term. But if you have a car loan or a mortgage or student loans or any other kind of long-term loan, that’s something I like to think through.
And then investments, well, I like to see loan balances go down. I want to see investment balances go up. But if you don’t know where you stand, making good decisions in those areas can be tough.
So, if you were looking for a finance or budgeting app to have features around those, what would you look for and how would you try to use them?
What you’re talking about very oftentimes involves an account aggregator. The vast majority of us don’t have all of our accounts at the same bank, the same financial institution. We may take a bank account from a credit union or Chase and then get a loan from Wells Fargo and a credit card from Citibank.
The problem is, and oftentimes I see this with folks who struggle with financial management, which is trying to figure out where all that money is, who do I owe, when, where are my savings, how do I find out all the information. So, a hallmark of a good app is account aggregation. So, not only being able to connect in real time to a bank, but to be able to connect to multiple banks, to be able to connect to multiple financial institutions that may not be banks, may just be lenders, for example. And so, you can pull all that information into a central location, into that app or into that piece of software so you can see how everything is going. Have you paid that loan, has that deposit come in, how frequent, by the way, is that update on that account information coming in. These are all questions that you might be asking or you’ll need to know about.
When you look at an app or you look at a service, you’re going to want to see can they connect to other financial institutions. And very often there’s one or two ways they can do it, they either have a realtime backend connector between the computer systems or they’re just using, frankly, your login to grab information from the screen and then put it into your account. And there are pros and cons to both, but as long as there is a connection that’s important.
In addition to a budgeting app, I might use a few different financial apps. I might have a separate app I do for my credit score, a separate app for investment analysis. I know I don’t want to pay too many fees and I want to make sure my portfolio is in the right balance for my goals. So, sometimes there’s even more customized apps that’ll do just what Bobby’s saying, they’ll bring in multiple accounts and give you that more holistic view.
Something a lot of people worry about, and this even goes with using their regular old bank apps or even the Payactiv app, some people are really worried about security. They have this conception that the internet is not safe, and we know there’s hackers out there, there are cyber criminals, and we read about data breaches all the time, but what would you say to someone who says, “I just don’t trust these money apps, even my bank’s app, because I don’t think they’re safe?” What would you tell them?
It’s a fair concern, and I’ll take it one step further. I know folks that won’t even use an ATM. They’d rather go in person, they’ll wait. Bank branches are shrinking their hours. They’ll go in between 10:00 and 4:00 on a weekday to go visit somebody in person. I get the concern, that the hacking, the data breaches, they’re alarming because it’s out of our control. We can’t do anything about it.
It’s going to be funny to say this, but having real time access, live access to your bank account is the number one way you can monitor for these situations. If you’re waiting for that statement to come in, you’re going to have a month of lag time before you realize someone’s taking your money out of your account. And so, you’re going to want to get on it as quickly as possible. And that’s a great thing about using online banking or the apps from your financial institutions.
There are safeguards you can take to prevent unauthorized access to your account. That’s turning on two-factor authentication. That’s when they have to text you as a code separately to log into the app. There’s a new movement towards passwordless login, which is very, very new, and that’s a whole another podcast episode. There’s various ways to ensure that the information from your account stays in your hand. And ultimately, and this is why everybody should be using a bank account instead of trying to store the money under a mattress, there are liability protections. At those financial institutions, they’re going to say zero fraud liability, and it’s true. They will back that up and put that money back into your account as long as you tell them quickly that something is wrong, and that’s the big thing. You’ve got to stay on top of your accounts and that’s what you do with these apps. And yes, breaches are part of the nature of all that, but there are safeguards that you can take.
And I will say there are other measures that the bank can offer that may not be listed. Some higher protections like additional passcodes, verbal passwords, things like that, that can be discussed over the phone or in person at the branch.
I used to work with anti debit card fraud systems in one of my jobs, so I got to meet the people who support banks, and they analyze your transactions looking for fraud. So if you ever get a text message from your bank saying, “Hey, was this really you?” Those computers, they’re looking out for you too, it’s pretty cool, but you have to have that all set up.
One thing we didn’t mention that I think is so important also is using a different password on every single website, especially your financial websites.
And most people aren’t like me. I live online. I have over 1,000 passwords, I looked in my password app. It’s hard to keep them all straight, I wouldn’t just write them on a piece of paper or keep them on a notepad thing in your phone. There’s password apps. I use one called Bitwarden, they have a free version, to keep all of my passwords safe. But when you are inevitably… Some sites will get hacked that has your email and password and bad guys will go to every bank and every financial company and enter that combination to see if they can get into one. So, make sure you use a different password everywhere.
And if you’re out traveling or out grabbing something to eat and you’re on one of those public wifi networks, I would not do any financial transactions hooked to a public wifi network, like a coffee shop or something like that. If you do think that you need to do that, get something called a VPN, a virtual private network app on your phone or computer because that keeps the people who are sharing that same wifi network from getting into your data.
So, there’s all these little nuances and things we can do, but I’d say the most important thing, unique passwords, two factor authentication, like Bobby pointed out, you can do it where the code goes to your email or your phone or there’s an outside app. I use one called Google Authenticator. There’s a handful that can give you a random code that’s generated every like 30 seconds or so.
So, taking just those few small steps to keep your passwords unique and use multifactor authentication, that puts you far ahead of the crowd on cybersecurity. And if you’re doing those things, the hackers will probably just move on to somebody else. They won’t spend any more time trying to get into your data because you’re making it tough on them, and that’s what we want to do. We want to just be safe.
Eric, I’ll throw in one more thing here, and this is something that you probably heard about in the news recently. These crooks use AI technology to replicate your voice or use some sort of offline method to try to gain access into your account. It’s very scary to know that someone can try to impersonate you, sound like you, sound like a family member to try to get that information, to pretend to be a bank calling about something happening on your account.
One big thing to know is that if you are going to get a phone call from the bank saying, “Hey, there may be fraudulent information,” to say, “Hey, that’s great, I’ll call you back,” and actually call the bank, the number on the back of your card directly and reconnect to the fraud department. Because very often they’ll try to impersonate the fraud department and they’ll trick you into giving personal information because we’re all trusting people. They may say, “Oh, hey, before we get into your account, can you read back all nine digits of your social security number?” Those are things to really watch out for. So, this is beyond just apps and having an online account. Crooks can do this even if you don’t have an online account, they’re going to ask you for this information. So, something else to be careful of.
Yeah, that’s called social engineering. And actually, my mom recently got one of those calls, and I’ve told her again and again, if it sounds like it might be suspicious, hang up and call back. And one time she called back and it was real, it was her bank, but another time it wasn’t. She hung up and she called back a public number for her bank and they said, “Oh, no, we didn’t call you. That was a scam.” So, good for mom for knowing what to look out for. So, all of us and all of our moms and dads and grandparents should know when to hang up and not give out information, because if your bank is calling you, they already have your information, they don’t need it. But if you call them, then they need to verify you, but you know you’re actually talking to your bank.
These are really good tips and really useful information. We’re early in the year, so it’s a great time to revamp your finances, think about your financial wellness, get your personal bookkeeping in order by maybe signing up for a budgeting app or even with the Payactiv app, we’re happy to help you out there. There’s lots of different tools you can use, but as long as you use good cybersecurity, just best practices to keep your stuff out of bad guys’ hands, you will be safe and can go forward and confidently manage your money better.
If I can just plug one resource really quickly, it is going to sound a little hokey, but AARP has an incredible fraud watch team with a lot of great information. You may say this is just for senior citizens. No, this is for everybody to know about and to help you to understand what to protect yourself from.
Yeah, I actually used to listen to their AARP anti-fraud podcast, and one of the co-hosts is Frank Abagnale, the guy from Catch Me If You Can, but in real life. He used to be a fraudster and now he helps the FBI prevent fraud. So, I really like that show.
Well, if anybody is excited about what they heard and they want to learn more about you and connect with you online, where should they go?
So, you can find me at 2 Minute Finance, so that’s 2minutefinance.com. Or if you’re interested, as Eric mentioned in the beginning of the podcast, I work a lot with fintech startups and participate in fintech competitions to bring a lot of these new apps to a higher level of visibility in the marketplace. So, the thing is, a lot of these apps come and they go, unfortunately, but the good ones, they stick around in a lot of people’s phones and their online accounts. So, it’s important to keep an eye on the new developments and new innovations that are out there. But thank you for having me, Eric.
Thank you so much and hopefully we’ll have you again.
Absolutely. Thank you so much.
Well, that was a fun conversation. I could talk about money and budgeting and financial apps all day, but I’m a money nerd. I know most people do not love money and money apps as much as me, but I could have talked and talked and talked on those topics. I just think they’re so interesting.
And that’s where I got a big start in managing my money and getting into this career path where I can help other people with their money. I signed up for a brand new budgeting app. I’m going to date myself here, it was way back in 2007. And that was the first place I was able to see all of my transactions from multiple accounts in one place. And my financial management improved and my financial wellness improved. It helped me pay off my student loans, pay off a car loan, and improve my credit score and get myself on track for a better financial future. So, definitely take advantage of what’s out there.
And if you don’t already have it, you should check out the Payactiv app. It’s available for Android and iOS devices. It’s free to sign up and there are tons of free financial wellness tools built in, including ones to help you better track and manage your money and improve your savings and a whole lot more. So, you should check that out. Type Payactiv into whatever app store you use, Google Play or the Apple App Store, and get that downloaded. It’s just a couple minutes to sign up.
So, thank you everyone for sticking with us today and listening till the end. Now, get on out there and live the life you’ve earned. Bye-bye.
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