Why Financial Data Aggregation is Pivotal to the 10 Commandments of Personal Finance

Recently, the Wall Street Journal ran an article, which tried to distill all that a person needs to know about money matters and personal finance management into under a thousand words. It’s a very straightforward and simple, yet useful article, which reminds people that managing one’s finances doesn’t need to be overcomplicated, and that some of the most important pieces of advice are nearly intuitive. These tips can be seen as a sort of 10 commandments for personal finance. While the tips themselves may be simple, the trouble can come in the implementation and execution phases. This is where data aggregation has an important role to play. By having all of a person’s financial data easily accessible from one place, successfully implementing those 10 commandments becomes more possible.


For example, one of the tips involves keeping investments simple, so that it’s actually better to have a simple portfolio, which is invested with the necessary amount of diversification, which is made up of index funds that require only minimal fees and charges, and which is only adjusted on an annual basis. Data aggregation is helpful because it allows a person to quickly understand the big picture of all their existing investments. Instead of having to bounce from one portfolio account source to another all their  financial assets are centralized in one location.


Another important tip is that it’s important to have a good understanding of a person’s financial and spending habits. This means that if a person has difficulty keeping impulse buying under control, that person should not be making use of credit cards or even have access to them. Or if the person has a very low appetite for risk, then that person should make sure that the investments made should center on more conservative financial instruments. Data aggregation can help by allowing the person to more closely, accurately and completely keep track of spending habits. Are there certain types of items where spending tends to be more unplanned or sudden? Does the person have a history of quickly dumping stocks that are falling in the stock market? Aggregation and financial data management allows a person to more honestly understand his or her financial proclivities.


A third key tip mentioned in the article is the importance of saving on a regular basis. It’s pointed out that getting an earlier start to saving can pay off big in the long term. The same is true for having a habit of adding to savings regularly. Data aggregation also helps here by allowing someone to better keep track of his or her savings among their cash assets. Key questions such as; does a person have 6 months of cash liquidity available in reserve or  what is the total interest earned on investments?


These are just but a few of the benefits of centralizing and data…


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