To get started on financial management, you need to start measuring your financial situation first. Because once you start measuring things, managing them becomes clearer and easier. For most of us, this means balancing our checkbook and listing out our investments in a notebook (In MS Excel these days). Right?

Smart people would be setting up a detailed system and software that tracks expenses, optimizes income and tracks savings and investment. They know that there are several downsides for not maintaining any records or just maintaining a manual notebook for all your financial transactions. Are you looking for free software downloads, online softwares or desktop softwares?

Notebook records don’t give you the options of retrieval of data in any desired format other than the one you are using. For example, a list of fixed deposits will not give you another list which is sorted in a way that shows in an order when you will get the redemption or maturity of those FDs.

Excel is a powerful spreadsheet and can be used by trained users in a very effective way. But the caveat here is that you need to be a trained user to make use of the spreadsheet software. Even with trained users, getting reports in charts, tables, etc will not be easy.

Record keeping is a simple, easily implemented, and cost effective management tool. Complete, well organized records can help ensure proper management of your money.

But it is also important to be aware of the limitations of good record keeping. We need to take care of the following:

I believe that available technology can help create a strong system to manage your money. But they also need to be easy to use. It should not be like a Jet’s dashboard which has hundreds of powerful utilities and features but very complicated to understand.

There are some desktop softwares that are coming to the market and promise loads of features.

An option that is growing in popularity is software that is kept entirely online. You never actually download a program to your computer and can access your information from any computer connected to the Internet, including SmartPhones.

This is referred to as “cloud computing.” Some websites offer a low monthly fee to use the software and other sites are free and entirely advertising supported. Some people prefer this method for its convenience and other people stay away from these programs due to security fears.

Once you begin to use personal finance software you’ll wonder how you ever managed your finances without it. I believe that people might become addicted to seeing the computer generated reports of exactly where their money goes each month. They should find this makes it easier to create a budget and stick to it.

Using online financial tools is not free from some disadvantages. Even though there are efficient security systems that take care of your data privacy, you never know when it would be hacked into.

What are your preferences of using financial software, tools and calculators? Are you comfortable using online tools or desktop software?

Please share your thoughts with us at editor@personalfinance201.com

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