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5 Small Decisions That Will Improve Your Financial Status

5 Small Decisions That Will Improve Your Financial Status

Whether you have a little or a lot of money, there are many things that anyone can do to help improve their financial status.

Improving your finances is not about making life altering decisions. You do not need to become the world’s most well-informed investor or to create a budget that is so strict that you live on nothing but potatoes. Healthy money management is all about those small steps that you take towards greater overall financial health.

The end of the year is the time that many people think about changing their financial position for the better. If you’re not ready for a big resolution, you can make just as much progress by making several small decisions that are aimed at improving your finances.

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1. Get Informed

One of the most important things that you can do to improve your financial standing is to be informed about finance. You do not need to become an accountant or find a financial guru. It is all about educating yourself in the places that matter most.

The process of becoming better informed about your finances has two parts. First, you need to understand your own finances. Having a clear picture about where you currently stand is essential for setting and achieving your financial goals. You need to know what you have, what you earn and what you owe. This basic knowledge will have a real impact on how you look at finance.

Second, you need to know more about the basics of finance. You need to have an understanding of the impact of good debt and bad debt. You also need to know about how interest rates can work with you and against you. Learning about the different options that you have for saving money is another good place to start.

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2. Set Real, Achievable Goals

If you’re not already setting goals, there is no time like right now to begin doing so. If you are setting goals, there is no time like right now to measure your progress so that you can improve. Financial goals are important when it comes to improving your finances. These goals give you something to work for. They also give you something to measure your success by.

Setting goals is all about setting achievable goals. To do this, you need to be specific in the goals that you set for yourself.

Let’s say that your goal is to save money or pay off personal loans. You need to know how much money you want to save. You also need to know how you want to save it. Do you want to set up a savings plan to save $500 a month? Or do you want to cut spending to save an extra $200 for extra expenses?

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These are two different types of saving and you would use different methods of achieving each goal. This is why it is so important to make your goals as detailed as possible Do not forget to keep your goals attainable. An unreachable goal sets you up for failure and often hurts not only your finances but your attitude about money.

3. Take Your Time

Taking your time is one of the most important decisions you can make about your finances. Rome was not built in a day and your retirement accounts will not be either. Choosing to think about your financial decisions is also a multi-faceted approach. First, you should make sure that you take time to think about your purchases before you buy them. This helps weed out impulse buys and helps you spend money in a health way. One great way to do this is to put the item in your shopping cart online and if you are still thinking about it the next day, you may actually need the item.

Secondly, you should take your time creating a financial plan. When striving to reach a goal, give yourself enough time to reach it. Trying to save too much, too fast is hard to do. Have patience with yourself and your bank account.

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4. Eliminate Things You Don’t Use

Everyone has at least one bill that they pay every month for a service that they do not use. Whether yours is a landline, a gym membership or a subscription service that you have not figured out how to cancel, take some time to declutter your finances. Eliminating even one thing from your monthly selection of bills can make a big difference on your monthly finances. More importantly, it teaches you how to let go of spending habits that are not serving you.

5. Set Up an Automatic Savings Plan

Saving is important yet it is not at the forefront of everyone’s mind. You can make a decision to automate your saving plan to help make sure that it happens. Even if you only transfer $20 a month into a savings account, every little bit helps you build up a little nest egg. It also makes you more comfortable with saving. It’s a win-win decision.

Taking these small steps towards prosperity can take your further than you’d ever imagine. Remember that you have your whole life to manage your finances, you do not need to accomplish everything today.

Featured photo credit: GotCredit via flickr.com

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Last Updated on January 2, 2019

How Personal Finance Software Helps You Get More Out of Your Money

How Personal Finance Software Helps You Get More Out of Your Money

Do you know what mental health experts point to as the biggest cause of stress in the United States today? If you said “money,” then ding, ding, we have a winner!

Three out of four adults today report feeling stressed out about money at least part of the time. People are either worried about not having enough money or whether they’re putting the money they do have to use in the best possible way.

Your money is either in charge of you or you’re in charge of it, there’s no middle ground. Using some type of personal finance software can help alleviate some of that money stress and better allow you to manage your money effectively. Without it, you may just be setting yourself up for constant financial worry. Life is already tough enough and there’s no need to make it more difficult by simply hoping your money issues will all work out in your favor. Hint: they won’t.

This guide will help you to understand how personal finance software can better assist with both accomplishing long term financial goals and managing day-to-day aspects of life.

Whether it’s tracking the savings plan for your child’s college fund or making sure you won’t be in the red with the month’s grocery budget, personal finance software keeps all this information in one convenient place.

What Exactly is Personal Finance Software?

Think of it like the dashboard in your car. You have a speedometer to tell you how fast you’re going, an odometer to tell you how far you’ve traveled, and then other gauges to tell you things like how much gas is in the tank and your engine temperature. Personal finance software is essentially the same thing for your money.

When you install this software on your computer, tablet, or smartphone, it helps to track your money — how much is going in, how much is going out, and its growth. Most personal finance software programs will display your budget, spending, investments, bills, savings accounts, and even retirement plans, levels of debt, and credit score.

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How It Leads to Financial Improvement

It shouldn’t come as a surprise, but people who regularly monitor their finances end up wealthier than those who don’t. When you were a kid, keeping track of all of your money in a porcelain piggy bank was pretty easy. As we get older, though, our money becomes spread out across things like car payments, mortgages, retirement funds, taxes, and other investments and debts. All of these things make keeping track of our money a lot more complicated.

Some types of personal finance software can help make things a little less complicated, setting you up to meet financial goals and taking away some of the stress associated with money.

Even if you already have a Certified Financial Planner (CFP) some type of personal finance software can be of great benefit. Whereas CFPs focus on the big picture of your money, they don’t handle the day-to-day aspects that determine your overall financial health.

It’s also not nearly as complicated as you might think and can take out a lot of the tedium that comes with doing everything on an Excel spreadsheet or with a pad and pencil.

Types of Personal Finance Software

When it comes to personal finance software, it generally fits into two categories: tax preparation and money management.

Tax preparation software such as Turbo Tax and H&R Block’s software can help with everything from filing income taxes to IRS rules and regulations and even estate plans. Plus, there’s the benefit of filing online and getting your refund check a lot faster than if you were to mail off your forms after waiting in line at the post office.

For the purpose of this article, however, will be focusing more on the personal finance software that aids with money management.

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Money management personal finance software will help you to see the health of your cash flow, pay down debt, forecast for expenses and savings, track investments, pay bills, and do a host of other things that 30 years ago would have practically required a team of accountants.

When to Use Personal Finance Software

So far we’ve gone over what exactly personal finance software is and how it can be a benefit to your money. The next logical step in this whole equation is determining when it should be used and how is the best way to go about getting started using it.

Below are four of the most common and practical ways to use personal finance software. If all or any of these apply to you and your money, then downloading some type of personal finance software is going to be a smart move.

1. You Have Multiple Accounts

There’s a good chance that when it comes to your money, it’s in more than one place. Sure, you probably have a checking account, but you may also have a savings account, money market account, and retirement accounts such as an IRA or 401k.

If you’re like the average American, you probably have two to three credit cards as well. Fifty percent of Americans also don’t have loyalty to just one bank and spread their money across multiple banks.

Rather than spending hours typing in every detail of every account you have into a spreadsheet, many programs allow you to easily import your account information. This will help to eliminate any mistakes and give you a bird’s eye view of everything at once.

2. You Want to Automate Some or All of Your Payments

Please don’t say that you’re still writing out paper checks and dropping each bill in the mailbox. While it’s noble that you’re doing your part to keep postal workers employed, we’re 18 years into the 21st century and you can literally pay every bill online now.

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There’s no need to log into every account you have and type in your routing number either.

With personal finance software you can schedule automatic payments and transfers between all of your imported accounts. Automatic transfers will help to make sure you have the necessary funds in the right account to ensure all bills are paid on the appropriate date. Late fees are annoying and do nothing but cost you money. It’s time that you said goodbye to them once and for all.

3. You Need to Streamline Your Budget

Perhaps the best feature of personal finance software is that it allows you track everything going in and out of your virtual wallet.

Nearly every brand of personal finance software out there has easy-to-read graphs and charts that allow you track every cent you spend or earn, should you choose. You might be pretty amazed when you see just how much you spent on eating out last month or if you splurged a little more than you should have on Christmas gifts last year.

Every successful business on the planet has a budget and using personal finance software can help you trim the fat on your spending in ways that affect your everyday life.

4. You Have Specific Goals to Meet

Maybe it’s paying off debt or saving for up something like a European vacation. Whatever your financial goal is, whether it’s long-term or short-term, personal finance software programs are one of the savviest ways to go about reaching those goals.

You can do everything from set spending alerts to notify you when you’re over budget to automating what percentage of your paycheck goes to things like retirement investments. The personal finance software that you choose should show you exactly how close you are to hitting those goals at any given time.

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How to Get Started

From AceMoney to Mint and Quicken, there ’s no shortage of personal finance software apps out there. Many of these programs are free to download and will allow you to pay bills, invest, monitor your net worth and credit profile, and even get a loan with the swipe of a finger.

Other programs may only offer you limited services and will require a one-time fee or subscription to unlock all that they offer. These fees can often vary from as little as two dollars to 50 bucks a month.

It’s best to start off with the free version and then gauge whether you’re able to accomplish everything you’d like or if it’s worth exploring one of the paid options. Often times the subscription programs come with assistance from financial planning and investment experts — so that can be a real benefit.

When deciding which personal finance software program to use, it’s also important to look at how many accounts you wish to monitor. Certain programs limit the number of accounts you can add. Be sure that if you have checking, credit card, and investment accounts to monitor, that you choose a service that can monitor them all.

Finally, when looking around for the right personal finance software that meets your needs, make sure that you’re comfortable with the program’s interface. It shouldn’t be expected that you recognize every single feature instantly, but if the features don’t seem readable and manageable to you, then you’re not as likely to use it and get the full benefits.

Final Thoughts

Personal finance software can go a long way in helping you to take control of your money and meeting your financial goals. It’s important to note, however, that some focus more on budgeting and expense tracking while others prioritize investing portfolios and income taxes. Explore several different programs and read reviews to find the one that’s right for you.

In this day and age, managing one’s personal finances in a secure manner that allows the user to have a real-time visual representation of their money is easier than ever before. With the numerous applications that are out there — both free and subscription-based — there’s no reason that every person can’t take control of their money and ensure they’re making smart money moves.

Featured photo credit: rawpixel via unsplash.com

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