Below you will find an article explaining how to choose the right personal finance software to manage your personal money. I will divide the article into internal subheadings and provide a brief description for each.
Account Balances and Transactions
Personal finance management software displays the balances of all accounts you choose to track. The software calculates the accurate balances of accounts based on the purchases and payments entered into the program or downloaded from banks and other financial institutions. If you are using an online personal finance application, the balances will be updated at least once a day. If you prefer to use a desktop program for Windows or Mac, check if the program will automatically update the accounts every time you start using it, which is preferable for accuracy and convenience. While downloading transactions automatically is a very secure procedure, it may not be convenient for everyone. If you are uncomfortable with this process, choose financial software that allows you to import transactions after downloading them to your computer or manually enter transactions.
No Delays in Payments
Most personal finance programs allow you to schedule reminders for bills, paychecks, deposits, and money transfers, which is a feature that greatly helps avoid penalties and fees incurred for late payments. Many programs can send reminders to your mobile phone or smartphone or via email. At the very least, an alert should appear in the program when bills are coming due.
Quick and Easy Account Reconciliation
Reconciling personal financial accounts becomes easier and error-free when using financial software that has a reconciliation feature. This feature is typically found in financial programs for Windows and Mac, but not in online applications as frequently. When reconciling an account using personal finance management software, transactions in the program are marked with a mouse click when they match the financial statement. All the calculations are done for you, and determining whether your account balance matches that of the bank, credit card company, or other financial institution is much faster.
Budget Planning
Most personal finance software will assist you in creating a personal budget easier than setting up a budget spreadsheet. After setting up the budget, you need to assign budget categories for income and expenses in your accounts. The software should have a saved transactions feature so you only need to assign categories to most transactions once. Although all personal finance management software includes a budgeting tool, if you primarily use the software for budgeting purposes, opt for dedicated budgeting software. You can also download some budget table templates.
Facilitating Tax Time
Some financial software includes tax-related transaction categories, and you can always set up your own tax categories, which are used when preparing your return to generate a report on tax deductions, estimated taxes paid, and other items. If you categorize income-related transactions from payroll, charitable donations, and other deductible expenses, preparing your annual income tax return becomes much easier. Run a tax report for the year to get data for your tax return, or easier yet, transfer the data to tax software.
Paying Bills Online
Some financial programs allow you to pay bills online directly through the software with transactions automatically entered into the accounts at the time of payment. Many banks and brokerage firms offer free online bill payment services, but some charge for this service. Another option is to use an online bill payment service that is not tied to a banking institution. These services remind you to pay bills and can be set up to make automatic electronic payments from your checking or savings account on a specific day each month.
Tracking
Investment Analysis
Some financial software allows you to enter or download investment transactions and keep your account values updated almost in real-time through online automatic updates. Look for features such as printed and on-screen reports and charts to help you track your investments and inform your capital. If you’re looking for software that assists you in making trading and investing decisions daily or weekly, use stock analysis software.
Determining Net Worth
Not all money software tracks net worth, but integrated software usually tracks assets and liabilities to provide an accurate picture of your net worth at any given time. The program that offers detailed reports on net worth may cost about $15-20 more than basic financial software, but if tracking net worth is important to you, the graphical report and charts outlining the numbers are worth the cost.
Teaching Kids About Money
The more your children learn to manage money, the better prepared they will be for budgeting and bills when they grow up. Free or low-cost software is available that teaches children about money in a very engaging way to help parents and teachers educate kids through fun educational activities.
The key to using personal finance software to manage and save money is to use the software regularly and at regular intervals. The time required depends on the complexity of budgeting and other money tracking tools. If you plan to create a comprehensive budget, plan to spend 10 to 20 minutes each week reviewing your budget report and exploring transactions and making small changes to the budget. If you’re using the software to pay bills and track account balances or investments, some weeks may require a quick 5-minute glance at relevant tools, while others may need to allocate about 20 minutes for deeper use such as reconciling accounts.
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Source: https://www.thebalancemoney.com/how-to-choose-personal-finance-software-1294279
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