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turn the screws BY MARLYS HARRIS

AND MENTION OTHER

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MAKE IT CLEAR THAT THERE'S

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ILLUSTRATION BY JORGE COLUMBO MONEY MAGAZINE@35|1972-2007 September St

Personal-Finance Software

The reigning champs now have some worthy challengers ey pavip ruTRELLE

Woody Allen once said that 80% of success is just showing up You could also say ing, itdoes let you track mul- that 80% of financial success is just keeping track Knowing what you have stops tiple accountsand entitles you

you from bouncing checks; knowing how your investments are performing helps to free upgrades for life—orat

you move toward your goals Trouble is, keeping track can be a royal painin the leastforaslongasthe small posterior A personal-finance program can ease the ache Here are our six faves software company behind

AceMoney sticks around

> MONEYDANCE

Reilly Technologies;

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Moneydance doesn’t charge

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‘These two programs dominate

for good reason Both let you

download your bank and

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online, creating cool charts

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forbalancingyour checkbook)

to apricier one with sophisti-

cated tools tohelp youpay

down debt, save for retirement

and more Both give tax advice

> POCKET QUICKEN LandWare; pocketquicken -comy Palm, Pocket:

> ULTRASOFT MONEY

Ultrasoft; ultrasoft.com

into tax prep programslike you'rea Mac user, your only Ifyouwantasimpler Attention, handheld-PC Intuit’s TurboTaxand H&R optonhereisQuiken) (and usually addicts: These two very

Block's TaxCut Quicken and Money aren't cheaper) alternative: similar programsare the only

‘The 2008editionsofthese perfect, though They'reso >AcEMoNEY ones worth bothering with,

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track expenditures more youon other productsand _personal-finance package.IF your desktop personal- precisely (The 2008 versions services And they're not you're a frugal sort with only finance program (as longas wereunavailableat presstime; —cheap—especially ifyoufactor one bank account totrack, you that program is Quicken or wetested the2007 versions) in their monthly fee foronline can download AceMoney Lite Money, respectively) Because Bottomline: Youcantt go billpaying ($6 with Money, — for free While the $30 version man cannot live by teeny wrongwith either program, (IF $10 with Quicken), doesn't include onlinebill pay-_keyboardsalone $

52 September MONEY MAGAZINE@35]1972-2007 ILLUSTRATION BY EBOY

lGCGI GD G2006 324

From today on, getting a clear picture of your future

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the long view | mxemeuroseavr

Three Great Ways to

Mess Up Your 4.01(k)

Don’t look now, but you may be draining thousands

from your savings with these costly errors

What's worse than approaching

retirement with too little money

because you didn't contribute enough to

your 401(k)? How about saving diligently

but sabotaging your effortbecause you've

made poor investing decisions?

Recent research from Financial

Engines, an online advice service, su

gests many people are doing just that In

study of 100,000 401(k) participants,

the company found that 70% gave up

returns of one to three percentage points

ayear after inflation because of common

and entirely avoidable blunders The

cost: potentially hundreds of thousands

of dollars over the course of acareer

Don’t repeat their mistakes Ask your-

selfif you're guilty ofthe following:

> LOADING UP ON COMPANY STOCK

‘Company stock remains the single largest

holdingin 4019) plans that offer it as an

option, Hewitt Associates reports Infact,

one in five people hold halfor more of their balance in company stock “People

view their employer's shares as less risky because they feel they know theircom-

pany,” says Pamela Hess, Hewitt’s director

of retirement research Buta singlestock istypically two to three times asrisky as

adiversified portfolio, without offering

any mensurately higher return, Justask the employees of Enron, who lost everything

If you own any company stock in your 40104), sell it Ifyou can't bring your-

self to do that, at least limit it to 10% of

your portfolio, Under a law passed last year, you can even sellshares that your employer contributed to your account, as Jong.as you've been there for three years

> BEING TOO CONSERVATIVE Plowing too much money into low-risk choices

like stable value, bond and money funds

"may seem safe since it protects your

asonable expectation ofa com-

THE HIGH PRICE OF INVESTING MISTAKES

Common blunders such as investing too heavily in conservative choices like bonds

and cash or involatile company stock can stuntthe long-term growth of your 401 (x)

Too wimpy Too focused Just right

ion

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58 September MONEY MAGAZINE@35)1972

be

401(k) from market setbacks But it’s

dangerous in the long run because your savings won't grow enoughto provide you with an adequate income in retirement

Abetter approach: Create a blend of stocks and bonds that pro

against price drops but also gives you ashot at the gains you'll need to amass asizable nest egg: For helpsetting the appropriate mix for your age, check the

Asset Allocator tool at cnnmoney.com

» DOIN’ THE SMORGASBORD THING

In anattemptto diversify, some people spread their money evenly across all the optionson their 401(k) menu, That doesn't

produce a well-rounded portfolio any

more than searfingevery item at abuffet assuresabalanced meal You might wind

up with too big ahelping of growth or bonds, dependingon your plan's options

What to do? First plug your choices into the Instant X-Ray tool at morningstarcom

to see how your portfolio breaks down

by the major asset classes—large and small stocks, bonds and foreign shares, You

can then compare your current mix to the

blend our Asset Allocator recommends and, ifnecessary, rejigger your choices to get your 401(k) on track

Woiding these errors won't guarantee

you a giant nest egg But you will be mak- ing the most of every penny you set aside

And in the long run, that will pay off $

jes a cushion

mup for Updegrave's weekly e-mail newsletter at ennmoney.com/expert E-mail him

at longview @moneymail.com,