How to Save Money So You Can Afford Online Investing

By Matt Krantz from Investing Online For Dummies, 8th Edition

1 of 6 in Series: The Essentials of Investing Online

If you want to be an online investor, you must find ways to spend less money now so that you can save the excess. Here are a few things you can do now to help you change from being a consumer to an investor:

Start with what you can manage by putting aside a little each month.
Keep increasing what you put aside. If you do it gradually, you won’t feel the sting of a suddenly pinched pocket.
Hunt for deals and use coupons and discounts. Put aside the saved money.
Buy only what you need. Don’t be fooled into buying things you don’t need because they’re on sale.

Quicken is a great tool for measuring how much money you can afford to invest. It helps you determine how much money you spend, where it goes, and how much excess you accumulate each month that you can channel into investing. You can view the results in charts.

Quicken might be the big kid on the block, but it isn’t completely alone. Be sure to check out these other options (some of which are free!):

Microsoft Money Plus Sunset is a free version of the software that was once a venerable competitor to Quicken. The free software comes with all the powerful tools Money was known for, such as a portfolio tracker and budgeting tool, but doesn't include any online features.
Moneydance comes in versions for Windows, Macintosh, and Linux. It’s reasonably priced at $40 and offers a trial that lets you use the software until you hit 100 transactions.
Money Manager Ex is open-source personal finance software, programmed by hobbyists and offered to the public as a service.
GnuCash has one big thing going for it: It’s free. The software is updated and maintained by a host of freelance programmers, much like Money Manager Ex.
XeCheck is surprisingly slick and well-designed. The premiere version costs $32.
Buddi is another free option that Buddi tracks budgets and spending, not investment portfolios.

Personal finance Web sites let you see your information from any PC connected to the Internet, and you generally don’t have to install software to make them work. Here are a few to check out:

Mint.com pulls in all your bank and brokerage accounts and imports all your financial information.
Mvelopes Personal can be your spending cop that tells you you’re spending too much. Mvelopes is a Web-based spending tracker. It’s not cheap though.
MoneyStrands helps you track how you’re doing financially, compares you with others, and provides savings tips.
Personal Capital allows consumers to download their banking transactions and spot trends in their spending. Personal Capital provides what it calls a dashboard, which shows you where all your money is coming from and going to. There's also a cash manager to help you keep a handle on your expenses.

Putting all your financial data online is simple and convenient, but it can be a bad idea for many investors. First, there are the security concerns with entrusting all your financial data to strangers over the Internet. But beyond that, if a Web site calls it quits one day, you might lose access to the historical financial and investing records you kept on the site.