Touting Tools

By W.J. Hennigan
February 18, 2009 03:12 PM

As the U.S. attempts to tighten its financial belt, many Americans are seeking help to hone their spending and saving skills, and increasingly, they are looking to the Internet. Each day, hundreds of thousands of people visit personal finance Web sites that offer tools to help them set up budgets, rein in careless spending, and learn more about their investments –and some say business news sites should pay attention.

Sree Sreenivasan, tech reporter for a NBC affiliate in New York City and a dean at Columbia University Graduate School of Journalism, says incorporating these tools into news sites could be vital in reporting personal finance in the modern world, and helping people get a handle on their money.

“I’ve seen plenty of newspapers and magazines discuss personal finance in an interesting way,” he said. “But then you get online and there isn’t an interactive tool to go along with the story. It’s unfortunate because people want that. They want to be involved.”

Not only is it helpful, Sreenivasan said, but it’s also a way to keep the conversation ongoing among the publication and the reader. It’s clear that people are going to find the information they need, he said, now they want to receive the information in an interactive way.

Many personal finance sites offer services for free. One site, Mint.com, boasts that more than 850,000 people currently use its online money management and budgeting software. And it claims to add more than 3,000 users daily. Another company, Quicken, began in 1984 with its software and has since offered a free version of the product online at Quicken.com, amassing, according to their site, more than 15 million users.

As the recession deepens, personal finance sites will likely garner more attention. To deal with the demand, the list of these sites grows longer and more nuanced. For example, FoolProofme.com is a Web site that markets to younger consumers. FoolProof president and chief executive officer Will deHoo, 29, came across the idea about 5 years ago.

The young entrepreneur was inspired after observing the spending habits of many Americans his age. Coming from his background, growing up in Holland, he was “floored” by Americans lack of financial knowledge. He wanted to develop a Web site that would educate young people in a fun and interactive manner. Thus, FoolProof was born.

“No young person is going to read up on financial education on their own,” deHoo said. “You need to show them the dangers and scams in an instructive, but fun way.”

FoolProof tested its product with college and high school students for more than four years. But after striking a funding deal with credit unions in eight states, they were able to launch nationally on January 4.

“If more people were financially educated, this crisis may have been less severe or avoided altogether,” deHoo said.

FoolProof is aware of the journalistic merits of its enterprise. Of the seven members on FoolProof’s board of directors, three are former or current journalists. Their aim is to get financial information out to the public.

“Newspapers have to offer a great deal of content to their communities,” said Nick Buettner, vice president and chief operating officer of FoolProof. “We have a specific focus with important information that we plan to get across in an engaging way.”

Marketwatch.com’s media columnist Jon Friedman said in an e-mail that Web sites like FoolProof employ journalistic methods but only in the most elementary fashion. Journalism's foundation is built on reporting and analysis, he said, these personal finance sites simply provide a presentation of information. Nevertheless, Friedman acknowledges that there could be something to gain by looking at the tools that the sites provide.

“Newspapers can learn from any source when it comes to attracting and maintaining an audience,” he wrote. “They can learn here how to give the customers what they want in basic ways.”

And what they want is more interactivity, Sreenivasan said. The problem is that media is slow to adapt and that needs to change, he said. Journalists need to be on the cutting edge, especially business journalists.

“We, as journalists, have a tendency to wait for news to find us in the newsroom,” he said. “That’s nonsense. Journalists should be actively seeking out information and always be aware of what is going on outside the newsroom.”

Sreenivasan said if more people are looking for personal finance tips online in an interactive forum, then news sites should try to give that to them. This could mean partnering up with the finance sites.

In November of last year, the best-selling daily broadsheet newspaper in Britain, The Daily Telegraph, and personal finance Web site Wesabe announced a partnership to bring free money management tools to the Telegraph's readers.

In a statement, Paul Cheesbrough, chief information officer for Telegraph Media Group said Wesabe’s tools added “personalization and relevance” to the publication and that the services “could be of real value to our readers.”

However, there were concerns among some analysts that a public forum, like that of a newspaper’s Web site, might not be the best place to post one’s finances. After all, a newspaper’s job is to reveal information to the public, one blogger said.

Regardless, Sreenivasan feels that implementing these tools into news sites could be the future of personal finance news; as long as those in the media are willing to see the writing on the wall.

“The lesson is: people want solid, actionable information,” he said. “If their local media isn’t willing to give it to them, people will find it for themselves.”

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Copyright © 2009 Donald W. Reynolds National Center for Business Journalism