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Personal Finance Analyzer helps analyze expenses, Reduce Interest Rates, Reduce Expenses, Increase Cash Flow. Its like having your very own personal finance consultant and credit counselor right at your fingertips!! HOME | REGISTER | FAQ | EXPENSE TIPS | FEEDBACK |
Frequently Asked Questions about Personal Finance Analyzer:
Q. What is PFA?
A. Our Personal Finance Analyzer (PFA) is a system that is designed to provide a simplified and easy to understand view of your current financial status. Using the data that you provide, the system can offer some tips which can help you save money on interest or expense charges, and demonstrate how these all impact your BOTTOM LINE each month.
Q. Do I have to create an account to see how this system works?
A. You do not have to create an account to see how PFA can work for you. You can take a 'test drive' using our guest login account (User=guest Pass=guest) so you can view sample data and take a full tour!
The test drive sample data demonstrates how the PFA system works and provides additional information tips to show how you can utilize the system to evaluate and improve your personal finances.
Q. How long will take to pay down my credit expenses?
A. This depends on how much debt you have accumulated. If you make additional payments beyond the minimum required, continue to use PFA to remain focused on priorities, you should be able to see quicker progress.
You can use this Credit Card Payoff Calculator to estimate the monthly payment or number of months to pay off a credit card debt using the remaining balance and interest rate. Don't get discouraged! You didn't fall into expense problems overnight, and you won't get out of them overnight either!
Q. Things like Gas and Groceries are never consistent numbers. How do I input these to PFA correctly?
A. If you use a Debit card to pay for gas or grocery items, then you can get the monthly total from your bank statements. You can also use receipts to tally your monthly expenses in those areas. This is a time consuming process of course, and many users will just estimate those charges. Estimating is not the most accurate method, but it can still provide useful data. It would probably be best to keep actual receipts for a one month period, then enter that amount to PFA. Although the cost of these items change from month to month, the change is usually not significant enough to justify ommitting the expense from PFA. In order to work best, PFA needs as much actual expense data as can be provided.
Q. How do I input my car insurance so it is included in my PFA Analysis?
A. If your car insurance expense is paid quarterly or yearly, simply divide the expense by 3 (quarterly) or 12 (yearly) then place that amount into PFA as the monthly charge.
Q. Can I use the main page in PFA to filter my own records?
A. Yes... From the main screen, you will notice a button near the top left corner "V". Press this button to activate filtering on the main grid. You will see a new row created near the top of the grid for filtering columns. Each column will have a field availible to enter filter data. When you have selected your filter has been input, simply press the ">" button to the left to that row and records will be filtered according to your criteria. The "X" button clears the filter field's, and the original "V" button will close the filter row.
Q. Can I use sort the column items displayed on the main page in PFA?
A. Yes, simply click the column title on the top row. The first click will sort in ascending order, and each subsequent click will reverse the sort between ascending and descending. You will see the sort criteria updated in the third row of the grid. Multiple sort columns are possible. If you want to remove all sort options and restore to default, click the "x" to the left of the row.
Q. What is the difference between RC, LT, and ME Payment Types?
A. Revolving Credit (RC) Payment Type should be used for credit cards, personal loans, and other accounts which usually have a fixed credit limit. For credit cards, payments and interest charges vary and are both determined on a monthly basis. A short term (5 years or less) personal loan can have a fixed payment and payoff date. A home equity line of credit is another example of RC Payment Type.
Long Term (LT) Payment Type should be used for monthly mortgage, car loan, 2nd mortgage, student loans, etc. These accounts usually have a fixed payoff date (typically greater than 5 years) and a fixed payment. Although late charges may apply, they do not usually impact your Loan Balance or Monthly Payment.
Monthly Expense (ME) Payment Type should be used for normal monthly expenses including rent, utility bills, phone charges, water, gas, groceries, child care costs, or other monthly charges. These expenses do not have any Interest Amounts or Interest Rates associated with them, although late charges can still apply.
Q. Should I include Dividend payments that I receive as Income?
A. Stock or Interest Dividends (including savings account interest) should only be included as income if they are used to pay monthly expenses. Otherwise, there is no need to record that income. However, in fact dividends and savings account interest do increase your Cash Flow, and could be used to pay down other expenses like credit card debt.
Q. I work a lot of overtime hours, so my income is always changing. How do I input my income to PFA?
A. Try to find your base 40 hour net income, without the overtime dollars, and use that figure in PFA. When working with finances, it's better to leave out the extra overtime dollars unless they are guaranteed. By using this method, you will still have an accurate finance picture if the overtime money ceases for some reason. Keep the overtime dollars out of your finance decisions, and use the extra money from your overtime dollars for a night on the town, or to pay down expenses instead!
Q. For Revolving Credit or Long Term accounts, should I enter a Payee Name account record even if I currently have a $0 balance outstanding?
A. Yes. If you have an open line of credit and a $0 balance, this information should still be entered in PFA. If the account has a lower interest rate than a more active account, PFA may select the $0 balance account as a target for possible balance transfer from higher interest rate accounts. This could result in additional cost savings! If you do not enter this account, PFA will not be able to consider it in the analysis.
Q. Why is paying down the HIGHEST INTEREST AMOUNT account so important?
A. This value is important because the highest Interest Amount account needs to be reduced first in order to provide the greatest benefit to you. When the Interest Amount is reduced, you can then use the savings to further reduce other expenses, or continue to pay down that account. This is a compounding process. The more charges you reduce, the more expenses you can payoff, and your expenses are reduced even further.
Q. Why is reducing the HIGHEST INTEREST RATE account so important?
A. High Interest Rates increase the Interest Amount (in dollars) paid for loans. For accounts with a small Loan Balance this additional interest amount could be small. For accounts with a large Loan Balance, the additional interest amount can be substantial. It is important to limit the use of high Interest Rate accounts in order to keep Interest Amounts low.
Q. If I decide to open a Low Interest 2nd mortgage type loan, how do I estimate how much of my payments will go toward interest and principal?
A. Try this Loan Amortization tool. It will project out your estimated expenses in terms of Interest and Principal along with an estimated payment. If you want the exact numbers for a specific account, you should contact your lender.
Q. What can I do to reduce my INTEREST RATE?
A. There are numerous options availible to reduce Interest Rates.
- You can contact your Payee and request that the Interest Rate be lowered. Sometimes they will accommodate your request if they have interest rate promotions in effect.
- You may have the option to transfer the Loan Balance to a different account with a lower Interest Rate and availible credit remaining.
- If you own a home, you can consider opening a Home Equity Line-of-Credit account. This will provide you with money to payoff or consolidate higher interest rate loans.
- If you have a 401K account, consider taking a loan on your vested balance to consolidate High Interest loans. The Interest Rates on 401K loans are usually low, and all interest you pay goes back into your own 401K account!!
- If those options are unavailible to you, another option is to open a new account with another payee who is offering a low introductory Interest Rate.
Q. What is the Debt-to-Income ratio and how do I know what's good and what's bad??
A. This is an interesting question... The recommended debt ratio varies depending on the source that defines it... Most use your "Gross Income BEFORE taxes and other deductions". Then the formula is: "Monthly Debt Payments / Gross Monthly Income" = ?? percent... After taxes, health benefit payments, 401K contributions, and other deductions are removed, it doesn't leave much take home money to pay the actual debt...
Here are some general guidelines:
Bottom line is: If your debt-to-income ratio is too high, you will likely be forced into a higher interest rate when applying for loans and you could even be turned down!.
- 35% or less: This is an average debt load for most people. If you keep your ratio around 15%, you're in great shape
- 36%-42%: You need to control your credit spending and work on a plan to start retiring some of your debt
- 43%-49%: You could soon face financial difficulties unless you start lowering your debt now
- 50% or more: You may need to seek professional help to aggressively reduce your debt load
Q. A lot of people that need this kind of analysis are not in a position to do anything about. So why even try?
A. PFA is designed to assist users in understanding their monthly expenses. By providing a central location to view ALL monthly income and expenses, users can see exactly where all their money is being spent. By comparing individual items on a single page, users can make easier choices on how to change spending habits and reduce many of their current expenses.
Q. PFA suggested my credit card bill with interest rate of 19.99% should be paid off quickly. The obvious suggestion is to pay that one off quick... But how??
A. It's not easy... PFA can make recommendations to help reduce that high interest rate. When the interest rate is reduced, it results in smaller interest payments. Users can then use those savings to further reduce other expenses, or to pay down that account. This is a compounding process. The more charges you reduce, the more expenses you can payoff, and then your expenses are reduced even further.
Q. I don't make enough money to pay off the revolving credit items. So why recommend that to me?
A. PFA will help determine if your income and expenses are running cash flow Positive or Negative. If the system determines you are cash flow NEGATIVE, the system will still try to provide suggestions for reducing expenses. If those suggestions are offered and implemented, then you CAN make improvements. As mentioned previously, this is a compounding process. The more charges you reduce, the more your expenses are reduced further. However, after using PFA many users will find they are actually CASH FLOW POSITIVE. In this case, the system can provide suggestions on how to rearrange spending that money to furthur reduce unnecessary expenses.
Q. Do you have tips for reducing expenses?
A. Yes, view our suggestions for reducing expenses
Q. Where can I find more information to help with saving money and other Personal Finance issues?
A. Additional information is availible at the Personal Finance link. You can also search the Personal Finance NewsFeeds
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