Personal Finance Software

2 Apr 2008 by Chetan Shah.

Personal Finance Software like Microsoft Money do a good job at managing personal expenses, investments and loans at the very least.

Following are some benefits of using personal finance software. By using I mean not just installing it but entering financial transactions on a regular basis. Basically the data in the software should as upto date as your bank/brokerage/mortgage statement.

- Entering expenses allows an individual to identify spending habits which are draining an individual’s income and adding no value to
him/her.

- Software can forecast individual’s cash requirements. By entering recurring bills, incomes and expenses in the software it will
forecast what your cash flow will be in 90/120/180 days thus enabling you to determine whether can you take additional expense now or whether you should wait for a later date at when you have a positive cash flow.

- Enables an individual to track their charitable donations and other income tax related data efficiently. By entering mortgage
payments, charitable donations, stock transactions etc. you will be able to extract all this information instanteneously for your income tax purposes.

- Capability to generate and printout reports (for example : Spending by Category, Portfolio Analysis)

- Track Retirement Account Contributions and Portfolio Performance.

- Category Spending Trends. It will help you identify your major expense categories. This will provide insight which area to
concentrate to reduce expenses

- Help you determine where you stand in terms of savings.

Please make sure that you have a good backup strategy also, so that in the event of hard drive crash you will not lose all this vital information. You will amazed how much data you have collected if you enter data in this software regular year over year.

As always your comments are most welcome.

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