How Money Management Software Makes Your Life Easier
Dealing with money matters can get complicated. Throw in a shortage of funds to handle the monthly bills and everyday expenses, and you might find yourself in a time-draining financial tangle. Assuming you're not an accountant, you could use some help -- and money-management software provides it.
Making a Budget
Money management software typically comes in a stand-alone version -- to be installed on your computer - or an online package that requires Internet access. Either way, the software includes a budgeting section that allows you to plan income and expenses on a monthly, weekly and yearly basis. Sheri Stuart, education manager of the nonprofit financial consulting agency Springboard, explains that the first step is to "set up a spending plan. Start by thinking about how you're going to spend money before you get your paycheck." The structure of a regular budget makes spending decisions easier.
Automated Bill Payments
Writing and mailing checks to pay bills -- two mundane and unnecessary tasks in the digital age. But, paying a bill online also requires you to keep track of it manually. Money management software lets you link up your bank account to pay regular monthly bills, such as utilities and credit cards. You set the payment date and the amount; you can back it out a few days before the transfer date if you don't have enough money to cover it. "We always recommend the use of bill-paying software," Stuart says. "It helps you avoid late fees and makes the whole process much easier."
Help With Taxes
Pulling together your tax forms and related documents each spring might be the most work-intensive financial task you face. Along with receipts, pay stubs and bank statements, preparing federal and state taxes can use up a significant amount of your time. Files get lost and receipts mysteriously stray. A good personal finance software package offers a tax-preparation feature. By tracking deductible expenses and payments, it can help you complete tax forms automatically and do the calculations as well. The software may suggest write-offs you may not have thought of, and also can cut down on math errors that could end up costing you.
If you're putting money aside for a big-ticket item or a college education, money management software typically can help you track the performance of your investments. Showing the risk and return on your assets can also help you re-balance your portfolio periodically to keep it in line with your goals. This feature can cut down on the time you spend managing your savings and can help you make progress toward your long-term goals.
Self-Employed or Small Business
Many folks work independently or freelance. Keeping tabs on clients and prospects, tracking expenses, following up on invoices and payments -- these are essential activities, and they can be handled by money management software with a built-in feature for small businesses. The package could also assist at tax time if you need to complete Schedule C or SE, or throughout the year if you make quarterly estimated payments.