Most of these programs are planned keeping the larger perspective and do not give any heed to the basics. They would have no provisions to get your expenses under control, debt clearance or tips on savings and investments. What is important with personal finance is to begin with simple budgeting process.
Let us look at different methods adopting which you can see your personal finances getting into shape:
Step 1: Use Paper and Pencil Method
It is one of the oldest methodologies available to track your finances. Nowadays one can download forms which are available on the different websites for free. Although this is an excellent method to know your finances and have them on tips, there are certain issues related to the same. One must have the basic understanding of the mathematical calculations so as to ensure speed and accuracy into this process. If you are to make changes it is difficult. Repeating the process every month becomes cumbersome and that is the reason most of the people are seen to give up.
Step 2: Use of computer – Excel
Ever since computer has entered our lives, we have access to a lot of software programs which have made our life simpler. When it comes to budgeting the use of MS Excel offer a great support. One can make a form with formulas embedded on the Excel. This allows one to simply enter the financial data pertaining to income, expenses and the payments and you can see the results immediately on your screen. This allows you to make changes in your budget instantly if you find anything going wrong.
One can overcome the issues related to time, repeatability and accuracy of the calculations which were seen as a lacuna in the old methodologies.
If you do not have an expertise in handling MS Excel and the formulas, you will find it difficult to create forms for your use. Well, there are self learning guides following which you can make forms easily.
Step 3: Budgeting Software’s
Most of these software’s are designed to offer end to end solution in terms of personal finances to the use. Right from monthly budgeting to portfolio management and financial planning can be done easily using this software’s.
These programs lack the human touch. They would simply create a budget depending on your spending habits in the past. A plan to meet your financial goals can be had using them. However, if there were some issues with the previous planning, they are going to repeat in your current budgeting style and there shall be no marked movement any further.
Most of these budgeting plans come at a cost which ranges anywhere between $40 to $100 per month. This can be a hefty amount when considered over a long term.
Thus, when you are looking out for getting your finances in the right shape, budgeting techniques can help you in the long run. The above listed methodologies are just a few which can get you manage the finances in the right direction and also save you money and time along with saving you from getting into debts.