As tax season comes to a close (thank goodness!), a few of us are starting to think about how to make better financial decisions in the coming year.
After all, if you aren’t an accountant or money manager, making financial decisions on your own can be overwhelming. That being said, putting your finances into a stranger’s hands can be stressful (and costly). Thankfully, there are a number of companies working hard to simplify the complicated, build trust, and provide free or affordable education to those who are interested in becoming more financially literate.
By offering innovative and accessible resources, these companies are disrupting the traditional finance sector and making a crucial impact on the lives and futures of the individuals with whom they work. Here are some of our favorites:
To Access Low Cost Financial Education: LearnVest
Financial illiteracy is a major issue in the United States. According to the 2015 S&P Global FinLit Survey, a detailed and comprehensive analysis of worldwide financial literacy by the World Bank, Gallup, and George Washington University, just 57% of Americans were deemed financially literate. Also, student loan debt is over $1.1 trillion, 56% of people in the US don’t have “rainy day funds,” and only 14% of baby boomers have a written retirement strategy – all troubling numbers. Even when you feel like you understand certain elements of your finances, the market changes so frequently that “you must be a lifelong learner” to stay on top of your game.
That said, there are resources out there for those who want to become more financially literate – you just have to know where to find them. One of our favorites is LearnVest, an online platform providing affordable access to financial planning services, tools, and classes. Their incredibly informative blog provides a plethora of free resources about topics like understanding credit, getting out of debt, and budgeting based on your salary. LearnVest also offers hands-on personal financial planning for a fraction of the traditional rates, making it much more accessible.
To Invest in Social & Economic Progress: Global Impact Investing Network
In traditional investing, investors and their financial managers choose investments based solely on projected financial return, with little concern for what the company they’re investing in actually does. In recent years, a new kind of investing has been on the rise: impact investing. What is impact investing? When people make investments in entities and funds that are focused on positive social and environmental impact alongside financial return. Impact investing goes beyond a “do no harm” approach of screening out potential negative industries or products and instead, seeks to create positive impact in a measurable and transparent way.
If you’re interested in impact investing, start by informing yourself of how it works and who you should work with. The Global Impact Investing Network (GIIN) provides myriad resources to that end, including a knowledge center, tools and training materials, and a network for impact investors to connect with one another.
To Work with the Right Investment Experts: Aspiration
Once you’ve made the decision to invest, you’ll likely want guidance. But, again, finding the right people to work with at a price you can afford can be a daunting task. That’s why we were thrilled to learn about Aspiration, an investment firm that is “built on trust, focused on the middle class instead of millionaires, and founded on the idea that we can do well and do good at the same time.”
While this mission alone is enough to seriously interest us, there are two other differentiating factors that definitely warrant attention: When you invest with Aspiration, you decide what to pay them for their services. They believe that since you’re trusting them to make you money, they need to trust you right back. They also donate ten cents of every dollar of their revenue to “charitable activities expanding economic opportunity” through their Dimes Worth of Difference initiative.
To Access Better Loans & Services: SoFi
Our banks and financial institutions play a critical role in our finances. Traditional banks operate without a holistic view of an individual and his or her needs. This can lead to financial trouble down the line, which you’re then left to manage on your own.
Enter SoFi, a modern finance company that is putting people at the center of finance. SoFi offers an array of financial services, from personal loans to wealth management. Unlike traditional finance companies, they “evaluate applicants based on a holistic view of their financial well-being rather than a three digit score.” The company is revolutionizing the banking industry, going beyond traditional banking to offer such services as affordable and easy-to-understand student loan refinancing, career support, and an Unemployment Protection Program.
SoFi also offer a wealth of valuable financial literacy resources, including a blog, student loan repayment calculator, and clear information about complex topics like when you should consolidate versus refinance, and how variable rate loans work.
These are just a few of the increasing number of financially-focused companies that are choosing to turn the market on its head, helping us plan for a better future, both for ourselves and our world. Do you know of others? Share them with us, and we’ll spread the word to our community. Here’s how: