Money Management Software
3 Reasons Why You Should Be Using Money Management Software
We’ve found that many individuals have financial problems due to a lack of understanding in the best way to manage their money. Quite often, they make mistakes that prove to be quite costly, especially when it involves an increase in debt. Money management software can be a big help in many cases.
There are several reasons that these individuals get into financial distress.
- Many don’t set up an emergency fund. Sooner than later, an illness, major auto or home repair, or even a loss of their job will create a severe financial problem. This can take a long time to overcome, and some don’t recover and have to resort to bankruptcy.
- Most don’t create a budget. Without a workable budget in place it’s quite difficult to track and control your spending. Making use of good money management software can be a big help with a budget. It will create all of the accounts that you need for fixed expenses, debt reduction, and even an emergency fund.
The software will allow you to import your bank transactions and also your credit card transactions. By doing this, it will be much easier to reconcile those accounts.
[bctt tweet=”Money management software can keep you on track.” username=”HBSMoneyTips”]
Any good money management software program will also give you a sample of asset and liability accounts to set up. Your assets will include checking and savings accounts, investments, retirement accounts, and real estate owned.
Your liabilities include the mortgage on your home, credit card balances, auto loans, and any other type of debt that you may have. Once you have those balances entered, you can get a clear picture of your net worth and how you stand in planning for your retirement.
First of all, creating a monthly budget is very important to see just where all of your hard earned money goes. You should also create savings, an emergency fund, debt reduction, and a retirement account. You need to plan for these to happen.
Your software program can be used just like a map to see where you are and where you need to be going. The budget will also help you to focus on a particular area that you need to improve on. We always recommend to our clients, that they make a strong effort in eliminating debt, especially credit cards. This is the one area where so many have a very hard time focusing on. They see their friends or neighbors with certain items and they feel that they should have them too. Out comes the credit card and more debt is added on to an existing problem.
Some individuals use a spreadsheet when setting up a budget and if that works for you, use it. However, a good personal money management software program will give you a lot more bells and whistles. It will create and print out a lot of reports that will help you.
Importing bank and credit card transactions will also save you work and time. There won’t be a need to enter transactions twice. Plus importing the transactions will make reconciling the accounts much easier.
A money management software program will also assist you in being able to make more informed decisions. You will know where you stand at any time, and where you are in reaching various goals. Knowing where you are in debt elimination, and perhaps how much money you have in retirement accounts, will enable you to adjust your budget to reach those important goals.
An accountant and tax preparer by profession, Gust’s true passion lies in his company blog titled “HBS Financial Group, Ltd.”. Through this venue, he not only tries to teach individuals about budgeting, money management, and taxation but he writes the majority of the articles as well.