By  Updated on Wed May 21, 2014

How to Take Control of Your Finances: 7 Top Uses of Money Management Tools

Keeping track of bank accounts and other investments, getting out of debt, saving up for retirement, or simply balancing a checkbook are only some of the few essential money matters that most people would like to successfully juggle yet fail to do so most of the time.

The good news is, there are a lot of personal finance tools out there which are designed to make the task of money management less daunting. The more popular ones – Quicken, MS Money, Mint, Yodlee, Mvelopes – are only the tip of the iceberg. Many of these applications are free, while others are available for a small cost.

Here’s where financial management tools can lend you a hand in sorting out those long lines of debit and credit – no need to know which goes where.

1.Budgeting

Having a budget is one of the most fail-safe ways of getting a good grip on your spending and starting you on the road to saving. Yet what may seem like a simple enough task for some can be an overwhelming step for the first-time budgeter. With personal finance tools, budgeting is easy because they make it so.

First, identify your income, then assign a reasonable amount to each of the expense categories where applicable. Just putting down everything in black and white gives you a clearer perspective of whether you are spending more than you make.

2. Track Spending

Having a budget is the first step, now it’s time to see if you are actually sticking to it.

Use your ATM, debit, or check card, swipe your credit card, or issue a check, and most online money management tools will automatically retrieve this information from your bank account and deduct the amount from the appropriate budget item. For some applications, you may need to input the amount yourself but either way, you find out if you’ve kept within budget…and get timely reminders if you haven’t.

3. Balancing Accounts

Utilizing a secure encryption technology, a money management software imports all your transactions across your accounts so you get updated balances all the time and never miss a check. No more spending hours just nailing down the right balance or remembering that check you failed to list down. Personal finance tools also automatically classify expenses so you always know where you stand – both in your accounts and in your budget.

4. Managing Debt

Whether it’s your rising credit card debt, student loans, or long term mortgage, financial management software lets you keep track of all these debts so you can deal with them upfront. Plus, with a better budgeting system, you can free up more cash and slowly (or quickly) pay off these debts. The faster you tackle these obligations, the faster you can be on your way to debt freedom.

5. Paying Bills

Protect your credit score by avoiding overdraft fees, late payments, and unfunded checks. Stay on top of your bills by availing of free alerts via email or text messaging whenever one is due. Better yet, take advantage of bill payment options offered by some of these financial management services.

6. Finding Money-Saving Strategies

Not only do money management tools help you keep track of your finances, they also do your homework for you by finding effective saving strategies that are applicable for your situation. They scout for the higher savings rates, lower credit card interest rates, and even rewards deals more appropriate for your lifestyle so you can save more and spend less.

7. Tying in All the Info

When all these pieces of financial information are tied together, you get a more comprehensive grasp of your net worth. And no, knowing one’s net worth is not only for those who have healthy investment portfolios, but also for the average individual who has definite financial goals and needs a practical roadmap to getting there.

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