Personal Financial Software – Take Charge of Your Spending
What Should I Look For in Personal Financial Software?
I’m sure we’ve all had this situation before: you take a look at your credit card or bank statement and stare at it in disbelief. “When the heck did I spend all that money,” you think. Situations like these aren’t particularly uncommon for virtually anyone in almost any financial situation, and they serve as good illustration of why good financial prudence is necessary.
However, good financial planning often isn’t as simple as “save as much money as possible” or “just pay off your credit cards”. Rather, financial planning is often a complex strategy designed to maximize your savings, eliminate your bad debt, and give you up to date access to your net worth now and in the future.
As such, personal financial software should not only be intuitive but also give you the tools you need to keep yourself financially stable.
Arguably, the most important aspect of any personal financial software is budgeting. Although daunting to many novices, the concept of budgeting is extremely helpful in avoiding situations like the one described at the beginning of this article. Programs for personal finances often implement one of two types of budgeting: “retroactive” and “proactive”. Retroactive budgeting lets you create a budget for yourself and then see how close you came to following it in the following time period. Proactive budgeting attempts to allocate each dollar towards some use (paying down debt, saving money, etc.) and actually guides you to achieve short or long term goals. Usually, the way this is achieved is by having the software force you to set aside some additional money to cover unexpected expenses. Because the additional money is known to exist, the software can then make far better recommendations based off of your goals.
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You Can Create a Budget With Good Personal Financial Software for Excel
However, it would be facetious to contend that budgeting is the only important aspect of any financial application. It’s important to also be able to track your actual net worth as well. Thus, good personal financial software will allow you to input the value of all your bank, stock, 401(k), credit, etc. accounts and permit you to update them. Getting a solid view of your financial situation is imperative when considering certain decisions. Do I sell these stocks? Do I have enough money in this account to cover my credit card expenses? If not, where does the additional money come from? The more accounts you have, the harder it becomes to get a clear picture of where and how your money is stored. Good personal financial software free will make it much easier to understand exactly what you do and don’t have.
When you’re looking for good accounting software for personal finances to help you plan for your financial future, ensure that it (or a combination of a couple of applications) has each of these two characteristics. In many respects, you want to run your personal life in the same manner that business runs theirs. You want to know what you have, where the cash is going, and at the end of the year, you want to be able to turn a profit. Solid personal financial software will enable you to do all of those quickly and intuitively.
In order to effectively prepare a personal or household budget, good personal financial software is a must. In addition, it should be user friendly, yet comprehensive enough to accomplish your goals, and have proper reporting that is very clear.
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.