Hey there! This is a sponsored post, meaning I was paid money to write it. Money I use to invest in index funds and buy necessities like dog treats and iced coffee. Also, this is my honest opinion. Please enjoy!
This week, I’d like to tell you a story. A story about the utter financial chaos that was my life in my early twenties. I was in significant credit card debt and couldn’t even make my minimum payments on my cards, I was subjected to an absurdly high interest rate on a loan for a car I had no business buying in the first place (an article for another day, perhaps!), I had student loan bills coming in the mail when I didn’t even remember taking out student loans four years prior (apparently I did), and I felt completely overwhelmed.
I also was starting a new job in a new city with no friends or family anywhere nearby. A job in finance, no less, where I felt like my debt-ridden personal life had to be kept secret at all costs – literally. I had the clothes, the shoes, the bags, the car, and all of the debt that tends to accompany those things when we’re not mindful. Eventually, I got serious about learning how to manage my money and I made personal finance my hobby. Fast forward to today, where I’ve done many years of research on credit cards, loan restructuring, investing, saving, real estate and the like, and I can safely call myself a personal finance expert.
Here’s the thing, though. It took me years to get there. Not only did it take a lot of time, it took a lot of money. I was missing out on quickly being able to identify opportunities to lower interest rates on outstanding loans, for example, which certainly cost me thousands of dollars in those early learning years.
Do you have to go through the same thing if you want to get a grip on your financial landscape? I have good news…
You don’t have to toil for years like I did, painstakingly comparing every possible financial product on the planet. I know what you’re thinking – HOW do I make this magic happen in my own life, Emily?!
Here goes: I recently had the opportunity to test drive Cinch, a new platform that offers an all-inclusive view of your financial landscape with a brief on-boarding exercise.
If you’re already zoning out at the words “platform” and “financial landscape” and wanting to vomit as you conjure mental images of boring charts and graphs all over the place, it’s time to zone back in! In what has quickly become my favorite feature on Cinch, they take a more artistic (and in my opinion, calming) approach to representing your financials. So instead of a bar graph with a bunch of harsh red all over the place representing your debt, you’d instead be looking at cute little birds sitting on a wire. When there are lots of birds on the wire, it’s looking a little heavy, and that represents your collective debt burden. As you pay down your debt, the birds start to fly away, and Cinch helps to keep track of it all. Isn’t that a nicer way of thinking about it? There’s no judgement or criticism, there’s just birds on a wire. And by the way, Cinch can help you shoo the little birds off the wire a little more quickly by identifying ways to reduce your debt burden, not to mention bolster your savings, plan for major life events, and monitor your spending. They also periodically update your credit score so you always know where you stand with the credit bureaus, which is important if you’re thinking about renting a new apartment, buying a car, taking out a mortgage, or doing anything that requires lenders to offer you money.
So now you know what Cinch does, but I bet you’re curious about how they do it. Specific to debt repayment and loan consolidation, they scan all of the offerings for tons of financial products online, compare the deals and present options to you to make your life easier. You don’t have to do anything that they recommend, but they do all the research for you and it’s way faster. What took me many ramen-eating nights over many ramen-eating years to uncover, they can do almost instantly (if anyone’s wondering, I’m actually more of a Minute Rice gal, but you get the idea). Not only can they help to get you on the right track by figuring out if you should refinance your mortgage, your student loans or other debt, they also keep monitoring it over time so you’re always aware of the best deals out there without having to actually do any of the legwork. They’re constantly scanning the interwebs on your behalf, and they’ll let you know when something good pops up. On top of that, they monitor your credit card usage, bank accounts and cash flow, and can help you get a grip on where your money comes from and where it goes every month. If you’re not entirely sure where your money disappears to, and the idea of painstakingly reviewing all of your credit card statements line by line is repulsive to you, just let Cinch do it for you. They’ll analyze everything, let you know how you’re using your money, and they won’t judge you for that latte. If you feel like initiating a “savings challenge” or a fun game to help yourself get and/or stay on track, you can also manage that through the platform. But you’ll never get a preposterous email shaming you for going to Starbucks. On a semi-related note, Starbucks is the first stock I ever bought, so if you do frequent Starbucks, my investment portfolio thanks you! Why Starbucks? I kid you not, it’s because Warren Buffet said you should only invest in things you understand, and when I was 23 I knew more about Starbucks than I did most other things. I’m really into iced coffee.
Anyway, all of this sounds great, right? Maybe a little too great?
I assume your next question is: What’s the catch? How does Cinch make money? Technically that’s two questions, but have no fear, I’ll answer them both.
Cinch is free for users for the first 90 days, so you can test-drive the platform, see if it works for you. If it doesn’t, no harm done, just cancel. If you’re digging it and want to keep using it after 90 days, it’s less than $5/month. Let’s take a brief pause to do some math – one of my favorite kinds of pauses.
Let’s say you have $5,000 in credit card debt, at 15% APR. If you pay $150/month towards that bill it will take you about 44 months to pay it off (almost four years), and you’ll pay about $1,500 in interest. Yikes. If Cinch identifies a credit card with a 10% APR and you transfer the balance, even with the same repayment schedule, you’ll pay it off four months sooner and save about $600 in interest – yay! Even if you’re paying to use Cinch, it more than pays for itself in many cases.
So – subscription fees – that’s how Cinch makes money. That’s the only way that Cinch makes money, in fact. Whereas other platforms will accept kickbacks from credit card companies and other lenders to push their products even if they’re not right for you (which to me is super shady and uncool), Cinch is legally obligated to act as a fiduciary, which means they have to act in your best financial interest with the advice and products they recommend. You want your financial planner to be a fee-only fiduciary (if they’re not, RUN), and you should expect the same from a platform that’s going to know all of your personal financial business, right?
So there you have it! I think Cinch can be a great way for people to quickly get a comprehensive picture of their money situation, and it takes away the judgement and stigma that typically accompanies financial tracking. They make it fun and easy, and from a technical perspective, the user interface is clean and straightforward. I have limited patience for a lot of apps badgering me with notifications and updates, so it says a lot that I actually found Cinch fun and rewarding to use. You can see your snapshot at any point and watch how your financially-savvy choices improve your position over time.
They’re partnering with companies as well to help manage retirement planning and investment accounts, so depending on who you work for, you might be able to get free access long-term. If you want to check it out and give it a try, head over to www.cinchfinancial.com and you’re on your way! Once you’ve gotten set up, let me know what you think in the comments below!
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