Budgeting for the Computer Savvy
With computers, you can leverage the computerized budgeting tools to your advantage in making flexible, accurate, and easy-to-maintain personal budgets. You don’t necessarily need to be a computer guru to set up these budgeting tools–just basic computer skills is all that is required. There are free computer budgeting tools and those more sophisticated that you pay for. Here are a few points to consider when using computer budgeting tools to manage your finances:
Keep budgeting simple in spite of using a computer. One feature that makes the computer popular among budgeting tools is that categories for both expenses and income can be added very easily. They can be added so easily that there is a tendency to get overly detailed in setting them up. Then, you have so many accounts to track that data entry for the day gets too time consuming.
No computer replaces the pocket notebook. On the portability scale, the pocket notebook is one of the budgeting tools that might rank higher than budgeting on a computer. This is because you can obviously take a pocket notebook with you everywhere you go. This is not so with even a laptop computer. However, with paper budgeting tools, you have to make sure you take the data for the day and enter it into your computer. Otherwise, you get a conglomeration of notes that build up and make data entry into the computerized budgeting tools a major task.
Use computer budgeting tools where the data can be shared among different applications. Never use computerized budgeting tools where you cannot export your data from one application’s database and then import it to another application’s database. In this case, “application” can mean web-based or personal computer-based (Windows or Mac). For example, some internet banking applications allow you to download checking account transaction history in what is known as Comma Separated Values or CSV format. CSV format should be the minimum standard. It is a text-based file format meaning you can even load it into Microsoft Notepad on your PC. And, most of your computerized budgeting tools are able to import CSV files into their application databases. So, it is a good way to get expenditures from a checking account electronically into your computerized budgeting tools.
Use free budgeting tools. Just go to any major search engine like Google.com and type in a phrase like “free budget software tools” and start evaluating what is out there. However, as mentioned in the previous point, make sure that you can export your data from the free software budgeting tools. You might find another free budgeting tool later and if you cannot export your data it will lock you in to one tool or you will have to enter the data all over.
If you can afford it, there are many software products featuring high-quality budgeting tools. The intent of this point is not to endorse any one product. If you can afford it, the software budgeting tools that you pay for are rich in features and reports and can help make your budgeting process even more streamlined and efficient. A couple of popular products are Intuit’s Quicken and Microsoft Money.
Software budgeting tools simplify budget reporting. Computerized budgeting tools are popular because of their advanced reporting features where you can make pie charts to show spending in categories, actual versus budgeted reports, and many other visual and textual reports that give you an indication of just how effective your budgeting plan is. Plus, you can produce these reports in a matter of seconds and report in different ways based on different input parameters such as date ranges.