About Personal Financial Management Software
Personal financial management software is a popular and easy way for consumers to keep track of their checking account balances and credit cards. However, it is also a powerful tool for organizing and analyzing all aspects of your personal and business finances, including invoices, receipts, investments, real estate and taxes.
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Types
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Several financial management programs are available. Two of the most popular are Quicken and Microsoft Money. Microsoft Money is commonly included with the purchase of a new PC.
Function
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All of these programs operate in the same basic way. Once you start a user profile, you can create registers for all of your checking, savings, credit card, mortgage, investment, retirement and business accounts. You then enter transactions manually, or allow the program to download them for you. With all of the data in place, you can schedule payments, set reminders, assign due dates, see cash flow, spending and income charts and track stock prices and account balances. You can create budgets and assign categories to your expenses so that you know where every dollar is going. Personal financial management software can also help you plan for retirement, college or a major purchase like a home or car.
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Features
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If you own your own business, these programs can take care of this accounting as well--you can create invoices, vendor and customer lists, track outstanding invoices, mileage and other tax items. You can also run "what-if" scenarios. Many programs work in combination with programs like TurboTax, allowing you to organize your tax information within one program and downloading the information into the other for easy filing.
Benefits
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Personal financial management software offers many benefits beyond the obvious automatic checkbook balancing. Consumers struggling with debt or late payments will find the budgeting tools and scheduled payments invaluable. Investors can access up-to-the-minute stock information that may help them make better investing decisions.
Considerations
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To get the most out of your personal financial management software, explore all the menus thoroughly and read the manual. Also, before choosing a personal financial management program, consider the particular features each provides. If you own a small business, you may need the "Business" or "Deluxe" version of a given program. If possible, get a trial version or check them out in a computer store.
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