This article is by staff writer Honey Smith.
There are many personal finance books and tools out there, useful to people in all stages of personal finance. I have a lot to learn before reaching financial independence, and the editorial elves thought it would be useful if I shared some of what I learn with you.
My recent reviews include “Soldier of Finance: Take Charge of Your Money and Invest in Your Future” and “FlexScore, Part I (The Book).” This week, I’m reviewing FlexScore’s free online tool.
FlexScore is still in beta, which means that they are still working out the kinks before general release. Once the developers are convinced that the tool is as bug-free as they can make it, they will “launch,” or make the product/feature available to everyone. Student loan payoff tool Tuition.IO, which I reviewed in January, is also still in beta.
Philosophy behind the website
As I mentioned in my previous review, the aim of the FlexScore tool is to “gamify” personal finance. What does that mean, exactly? They make 1,000 a perfect score of sorts, meaning if you score a 1,000, you can probably retire today without a problem. Your initial score is determined in part based on your demographic information, your debts and assets, the insurance policies you have in place, and your goals for the future.
Once you have an initial score, the tool creates an individual action plan for you. FlexScore assigns different values to different activities, and by completing those activities you can gain additional points. Examples of activities you could do to gain points are:
- Getting life insurance, or increasing the amount you carry if you have it
- Completing or updating your estate plan
- Opening an Emergency Fund
Sometimes getting points is as easy as reading articles on the FlexScore website or watching their informational videos on a variety of topics. The tool will recommend that you watch specific videos or read certain articles based on your action plan. However, you can access all the articles and videos on their site via the FlexScore learning center.
One of the ways the tool will be monetized is by having sponsored links to companies that provide the services. For example, if “get life insurance” is on your action plan, the site will link to one or more companies that sell that product. However, as long as you get the life insurance and update your profile accordingly, you don’t need to buy from a sponsor to get the points.
What I didn’t like
My main complaint in the review of the book is that there was little information about what constituted a “good score” for a particular person. The main reason for that, of course, is that scores vary widely depending on factors like age, current financial situation, and goals. The online tool gives you not only your FlexScore, but also tells you how your score compares to that of your peers (based on age and location).
While the tool did provide more information on what a good score is, I didn’t find the compare feature to be all that useful. This was mostly because it just seemed to compare my raw score to that of my peers’. While my FlexScore suggested that I was right on track with my peers, I suspect that’s because my student loan is the size of a mortgage and, well, I don’t have a mortgage.
Maybe I’m just nosy and want to know exactly what my “peers by age” are up to. I think making the comparison tool more robust and comparing scores not only holistically but also by category would be awesome. I do expect that the tool will become more robust with time, however, so maybe it’s coming someday!
Also giving access to your accounts means they will have access to your data (as Mint does) and can send you marketing offers they believe you may be interested in.
What I loved
My favorite part of FlexScore was the “breakdown” tool. What this does is put variables on a sliding scale and let you play with the effect that changing your goals would have on your score. The variables are:
- Retirement age
- Monthly income goal in retirement
- Current monthly savings
- Current cost of living
By sliding each variable up or down, you can see the effect that delaying retirement, decreasing your current cost of living, or paying off a debt would have on your FlexScore. Then you can decide what trade-offs you’re willing to make.
The learning center is also pretty neat. I watched a couple of the videos and they’re not too long or technical. They seem to be designed to explain basic concepts and inspire you to take action. For more in-depth explanations on various topics, the articles are extremely comprehensive.
Who should use It
My FlexScore was 400, indicating that I have a long ways to go before retirement. That’s news to precisely no one! However, I learned my peers have an average FlexScore of 380, which puts me about on track for my age and location.
One of the questions I asked Jeff Burrow and Jason Gordo, co-founders of FlexScore, was what makes FlexScore different from something like Mint. They said that Mint is extremely robust for day-to-day budgeting. However, it’s harder to get a sense of where you stand in a holistic sense, or understand how changing one aspect of your financial life can impact your ability to reach future goals.
With FlexScore, the action plan and points are part of the game. Sometimes it can be hard to get up the motivation to do something tedious and/or boring, like compare policies and obtain disability insurance. FlexScore is predicated on the belief that by getting points today, you’re less likely to put things off until it’s too late.
FlexScore isn’t a site for micromanaging your daily finances. You’re not going to be categorizing each transaction you make. This is a site for people who want:
- A big-picture understanding of their finances and how it relates to major life goals
- An action plan that is customized to their specific situation
- One central location for information on a variety of financial topics
- Are inspired by competition and games (you don’t compete against others, but can compare yourself to others, and compete against yourself)
A note about swag: While I was provided with early access to FlexScore for review purposes, my opinions are entirely my own.
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