22Seven – Managing Personal Finance
In my previous post about 22Seven I introduced the app and revealed its goal of empowering people to take control of their finances by providing the information needed in order to do that. In this post I share my experience of adding accounts to the app and the impact of that on the information available to me.
Adding and Removing Accounts
I had initially set up my Capitec bank account on 22Seven using the website (read more about my move from Standard Bank to Capitec). Capitec has a great feature where you can have up to 5 linked accounts with different names. This really helps me to manage my money as I can use each of these different accounts for my various businesses and projects and I don’t have to keep reconciling and allocating the funds from one account. But this does create an issue in 22Seven for me as many of the transactions imported from my Capitec accounts are business transactions and 22Seven is not an accounting tool.
This was going to be a deal breaker for me because I couldn’t cope with having to delete or categorise all my business transactions. But then I found the solution to the problem and it was incredibly simple, I could just delete the accounts I didn’t want included and 22Seven stopped importing those transactions. So I deleted my business accounts and just kept my current account and my savings account. Suddenly everything was much simpler!
My net value now more accurately reflected the balances in my current and savings accounts instead of including the money in my business accounts (which any freelancer/consultant will tell you should never be counted as your money).
I then added my spare credit card. This brought up my ‘you can borrow’ total significantly. But didn’t impact my ‘net worth’.
I got quite a surprise when I opened the list of accounts that can be added because it’s not just bank accounts and credit cards anymore. Your investment accounts (eg. Allan Gray, Momentum, etc) can also be added. This can be a positive and a negative. On the positive side, it’s good to be able to see your absolute net worth including your investments, but on the negative side, you should not count investments as being available for using. The solution to this is again very simple, simply drop down the list of accounts and un-tick the investment accounts and they will not reflect in the totals. When you want to see them just go and tick them again. So transactions for the accounts are imported and the totals stay current, but they do not necessarily reflect in the available balance unless you want them to.
The next thing that I noticed blew my mind. You may not know that I’m quite conscientious (some would say obsessed) about maximising the benefits I get from the loyalty programmes to which I belong. 22Seven allows you to add your loyalty programmes so that you can see your points balance for each one! The ones I added were: Pick ‘n Pay SmartShopper, Discovery Vitality and Clicks Points.
One of the best ways to maximise the value of a loyalty programme is to spend the points as soon as possible. Many people let their points accumulate over a long time and several things can happen over that time. The points could expire, a lot of people don’t know that their points are only valid for a limited period of time. The points could devalue, either because the cost of the merchandise increases or because the loyalty operator devalues the points.
To get the most value from a loyalty programme, use the points as soon as possible for something you would have purchased anyway. For instance if you have Discovery Miles, most online shops accept them as payment so next time you purchase something online, use your miles. Don’t save them for a flight you may, or may not, take at a later stage. Use them now and put the money you save toward the savings for your flight.
Again, I would choose not to have these loyalty accounts reflect in your totals as they are not really cash. But it’s extremely useful to have all my points reflected in one place so that I don’t have to go and check the individual balances all the time. In fact, I would go so far as to say that 22Seven would be worth using for this feature alone!
The final thing you can add as an ‘account’ is an asset or liability. For instance if you owe money to your parents or if you have a car which is paid off. The usefulness of this is that you can see an accurate reflection of your total net worth. So I entered the value of my car as an account, plus I created an account for money I owe my parents.
The only negative is that I can’t see a way to create manual transactions which would affect the balance of these accounts. So for instance if I pay my parents R5,000 each month toward the loan, my net worth will go down by R5,000. Then I have to manually edit my ‘loan account’ to make the balance R5,000 less.
Also, I will need to annually adjust the value of my car to ensure my net worth remained accurate. Some of these asset accounts may need to be adjusted more often than annually.
This is not the end of the world as it’s only a few transactions, but might be a nice feature to add at some point.
What It Shows Me
Now having entered all my account info, there are several things that I understand better:
- I can see my total net worth, with or without investments, with or without assets, etc. This is important for financial planning. You can’t set accurate and realistic financial goals for yourself if you don’t know your real net worth.
- I can see my loyalty points so that I know when I have points to spend, thereby maximising those loyalty programmes for myself.
- I can see more accurately how much a particular thing is costing me. For example, each month I get cash back from Discovery for various things, eg. buying Vitality food or using a credit card partner, etc. Now I can choose where to allocate that money. I can choose to allocate it back to the account it was spent from, thereby revealing the true cost of the items purchased. For instance, if I buy some clothes from Stuttafords and that adds R2,000 to the ‘clothing’ account under expenses. When I get R400 (20%) back on my credit card from discovery, I can allocate it to the clothing account, dropping my total expenditure on clothing by R400. This can become very useful if you are sticking to a tight budget. Alternatively I can allocate the cashback to a separate account called loyalty and see the total I get back each month then choose to save or spend it.
Whichever way suits you better, there is no doubt that this information is extremely useful in terms of personal money management.
Keep an eye you for my next post in which I will delve into the 22Seven reports and transaction features.
To download 22Seven, follow this link: http://goo.gl/zjZlpn
This is a sponsored post.