How to Choose the Best Personal Finance Software for You?
Personal finance software makes it easy for you to integrate all of your financial data in one program. Personal finance software main functionalities is providing you with an excellent platform for creating and tracking a budget, examining your investments performance and generating reports for analyzing your assets. Personal finance software is also designed to help corporations or individuals manage their finances and business ledgers. The main modules of personal finance software are; categorization of income and expenses, financial accounts tracking, synchronization of transactions with credit cards, banks, and companies, analysis of investments, creation of financial and tax-related reports, and provision of financial net worth. Personal finance software consists of two modules in its engine, they are; management of finance and software for tax. The management of finance module offers the required aspects for managing of flow income, banking, planning, and investing. The software for tax module provides the required tools for tax form preparation, tools importation, and e-filling of your taxes.
What is Personal Finance Software?
Personal finance software consists of processes key to financial planning that require regular re-evaluation and monitoring. The processes implemented by personal finance software towards financial planning include; assessment, creation of plan, and monitoring and reassessment. In assessment, the personal finance software asses the personal financial situation by compiling simplified versions of financial statements that include income statements and balance sheets. In plan creation, personal finance software provides details for accomplishing the goals set by a person. The details can include reduction of unnecessary expenses, increasing the employment income or even stock market investment. In reassessment and monitoring, personal finance software will monitor all possible adjustments on the person’s financial plan and perform reassessment. Personal finance software is popularly used in tax planning, retirement planning, estate planning, management of cash, investment and accumulation of financial goals, education planning as well as in delayed gratification. With personal finance software, an individual is placed in a good position to save and spend financial resources while concentrating on events in the future and financial risks.
What are the Features of Personal Finance Software?
Personal finance software provides the following features; online banking, graphs and reports, account registers, reminders, report groups, balance forecast, statement reconciliation, import and export data, investment account support, check printing, mobile app, bill and deposit reminder, multiple currency support, cash flow statement, two-factor authentication, email notification, net worth, and find and organize transactions.
- Online banking: It enables you to automatically download transactions and send payments from several financial situations as well as automatically categorizing and cleaning up downloaded transactions.
- Graphs and reports: It enables you to generate visual reports for your expenses and income by using the graphing tools that facilitate setting up the graph type and data range.
- Account registers: It provides an excellent platform for entering, editing, and deleting transactions in an account.
- Reminders: It enables you to set up payment schedules for the single or recurring transactions.
- Report groups: It enables you to organize you reports and reorder them using the drag and drop tools.
- Detail of spending: It enables you to categorize your spending and income and also help you in balancing checkbook and keeping your accounts in order.
- Reports and charts: It provides you with an excellent platform for generating detailed reports and charts that help you to see exactly where your money is going and also use the reports for making tax time easier.
- Balance forecast: It enables you to forecast on future account balances that are vital in preventing insufficient funds or bankruptcy.
- Statements reconciliation: It enables you to keep track of your banking statements to make sure every transaction is accounted for, therefore helping you to prevent bank errors and account fraud.
- Import and export data: It provides support to various file format imports such as CSV, QIF, and QFX and enabling you to export them to spreadsheet and QIF file format, therefore eliminating need for entering data manually.
- Investment account support: It enables you to download stock quotes and track investment actions like buy and sell which is vital in supporting investment account.
- Check printing: It facilitates check printing on blank check stock by using a calibration tool that allows easy calibration for different check types.
- Mobile app: It enables you to be at per with your finances anywhere and anytime.
- Bill and deposit reminder: It enables you to set up bill reminders that help you to see all your upcoming payments.
- Multiple currency support: It provides support to all world currencies and transfers between accounts with different currencies and also enabling you to download current exchange rates.
- Cash flow statement: It enables you to automatically update cash flow statement and facilitates viewing of your historical and future financial activity each month.
- Two-factor authentication: It enables you to effectively secure your account by requiring a code from your mobile phone that features your username and password.
- Email notification: It enables you to receive mails for your financial activity according to a schedule determined by you.
- Net worth: It enables you to add property mortgages and vehicles and also helping you to keep track of what you own and owe.
- Find and organize transactions: It provides an excellent platform for categorizing, labelling, and annotating your spend in your own way.
What are the Benefits of Personal Finance Software?
Personal finance software provides the following benefits; no late payments, quick and easy account reconciliation, easy budget planning, easy tax time, pay bills online, track and analyze investments, quick expenditure comparison, avoid financial mistakes, monitor credit scores, creating and managing financial goals, and tracking and budgeting expenses.
- No late payments: It helps you to avoid interest and fees charged for late payments by helping you to schedule reminders for paychecks, fund transfers, bills, and deposits.
- Quick and easy account reconciliation: Personal finance software reconciles with your account by making sure all the transactions are checked off, therefore helping you to determine if your account balances matches credit card, financial institution or bank.
- Easy budget planning: It helps you to create a personal budget in an easier way than setting up a budget spreadsheet, therefore making it easy for you to set up and assign budget categories to expenses and income in your accounts.
- Easy tax time: It helps you to easily create your own tax categories which are used when generating tax deductions and estimated tax paid.
- Pay bills online: It helps you to automatically enter transactions into accounts at the time payment is made, therefore helping you to carry out online payment of bills.
- Track and analyze investments: It helps you to make stock trading and investment decisions on a daily or weekly basis that is vital for analyzing your investments.
- Quick expenditure comparison: It helps you to compare expenditure made in other months to the current one.
- Avoid financial mistakes: Personal finance software makes it easy to identify mistakes as they are being entered, therefore helping you to achieve your financial goals.
- Monitoring credit scores: It helps you to keep track of your entire financial picture such as payment history, credit scores, and age of credit accounts.
- Creating and managing financial goals: It helps you to create new goals like paying off credit card debt and easily reflect into your monthly budgeting accomplishments.
- Tracking and budgeting expenses: It helps you to create subcategories for your budgeting needs and also provide you with options for making changes to your downloaded transactions.
What are the Key Performance Indicators (KPI's) of Personal Finance Software
The key performance indicators of personal finance software are; index for relative wealth, index for asset appreciation, index for living within means, and index for income independence.
- Index for relative wealth: It enables you to measure wealth as a function of lifestyle, calculated by dividing net worth by consumable assets.
- Index for asset appreciation: It enables you to identify how your net worth is deployed irrespective of its size, calculated by dividing the expected value of assets in twelve months by the current value of asset.
- Index for living within means: It enables you to know what extent your lifestyle expenses are within their means.
- Index for income independence: It enables you to identify how much income comes from passive sources.
What are the Latest trends in Personal Finance Software
The latest trends in personal finance software are; tag features, loan reminder, reconcile feature, search for payee text, monthly comparison, copying budget to spreadsheet, and printing the budget screen.
- Tag features: They will enhance transaction reporting and categorization.
- Loan reminder: It will enable you to automatically calculate principal and interest payments.
- Reconcile feature: It will remember the last reconcile date.
- Search for payee text: It will enable you to use the Find window for searching payee text rather than matching payee exactly.
- Monthly comparison: It will enable you to compare report to report category amounts in a spreadsheet-like view over multiple months.
How to choose the right Personal Finance Software?
Choosing and purchasing personal finance software is a tedious task due to the difference in features and benefits provided by the software. The following is what to consider when choosing and purchasing personal finance software;
- Connection ability: It should have the ability of connecting with different accounts from several financial institutions.
- Inclusion of budgeting timesavers: It should include budgeting timesavers like scheduling of recurring payments.
- Budget tracking: It should monitor your remaining budget and setting up alerts for notifying when exceeding limits is surpassed.
- Integration with mobile devices: It should work on mobile apps such as Android and iOS devices.
- Cost : Cost of the Software - one time or yearly subscription charges
- Security : Should provide Bank level security
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