Monday, September 16, 2013

Planwise - Online Tool for Long Term Financial Planning




While most of the personal finance software takes care of day-to-day activities and monthly budget, the San Francisco based startup Planwise offers you an online tool to make 5 or 10 years planning. 

Obviously to make long term plans you have to know your monthly income, expenses, cash balance and investments, debt and monthly loan payments. With all that you are ready to plan big in Planwise. 

Let’s see the results of my test drive.

1 min – Planwise has world simplest registration system, you just need to input your e-mail and main currency. The service claims that users are anonymous.
2-5 min Entering cash in back and incomes was an easy part. I did not enter any non-cash assets, let them stay in reserve fund. 

 


 I did not feel like entering all my expenses by 26 different categories, so I just entered my Total monthly expense. Since I have no loans or real estate, the set up was as easy and painless for as registration.

5-15 min. Selected 10 year prospective to plan, I will be 40 years old in 10 years. But, actually I thought that it would nice to have house of my dream when I turn 35.  And let’s say I want to buy a car in 2 years. Good thing about car, that beside actual payment (cash or loan schedule) I need to enter future monthly expenditure for the car.


Ups, looks like I’ll have to take almost $100k. in mortgage for the house.  And even if I transfer all net income to mortgage repayments, that is likely to end near 2022. Let’s cancel the car plan, so far so good with public transport.



The situation somewhat improved




However, what if I increase my income in 2014, staying at the same level of expense? I need to create an extra income and select option “monthly”. There are also pay increase/decrease option, I guess it’s for the similar purpose.

 


The service is unbelievably simple to use, but not without some flaws:
  • Obviously some integration with most popular home budgeting software will be helpful. I am sure though how to set priorities here, as there hundreds of services and formats.
  • I’d love this service to have some sort of reminders in settings. I did planning now, but I’d like to come back in 3 months and check how things are going.
  • If I invest $2000 into compound interest type of investment, I wonder what’s the way to account for that in 10 years in Planwise.
  • I did not quite understand how to save the plan I’ve created, there were no Save button...Fortunately, my info stayed in the system when I came back.
  • Mobile apps? Nice to have, but web service is actually fine for this type of long term planning.
 
Conclusion:
  1. Simple and useful tool for long-term financial planning.
  2. Good both for singles and couples.
  3. Free.
  4. Probably needs some more development in terms of features, scenarios and integration with home budgeting software.




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