Personal or household budgeting is the first step to securing financial security; paying off debt, saving for a new car, planning for a college, or building a retirement nest egg all start with knowing where money is coming from and where is it going. Taking control of your finances will empower you to take control.
While there is personal finance software, such as Quicken or Moneydance, there are plenty of free programs that will serve most customers' needs. There are three types of free programs: paper and pencil budget systems, personal finance computer software, and online personal finance tools. Each system has benefits and drawbacks. Trying a few programs for a couple of weeks will let users know which programs (or combination of programs) works best for them depending on recording habits and the level of sophistication of financial activity.
Paper and Pencil Budget System
While not exactly free, these paper and pencil systems are very low cost. The benefits are the ease of use and portability. Limitations are that calculations need to be done by hand and keeping track of the files.
Users can draw up their own forms based on personal or household needs. Templates, such as monthly summaries, pocket budgets, and "budgeting survival packs," are available to print at personal finance organization websites such as American Consumer Credit Counseling. The National Foundation for Credit Counseling offers a budget form you can fill out online and print out to use away from a computer.
Personal Finance Computer Software
Computer finance software is convenient because all the computations can be automated. Also the files are stored digitally and can be easily backed up for archiving reasons. The most obvious drawback is the lack of portability which can be an issue if multiple people in a household are using the same program or mobil access is needed away from the home computer terminal.
A spreadsheet template is a simple solution and is available at consumer advocacy organization websites such as American Consumer Credit Counseling. These spreadsheets can be used with commercial programs such as Excel or free open source alternatives like Open Office.
Some downloadable freeware programs are also include GnuCash, Money Well, or Ace Money Lite.
Most of these programs, either the spreadsheets or the stand alone finance tools, can be further customized to fit personal needs and spending habits.
Online Personal Finance Tools
There are a few online finance tools that make account access available from any internet terminal. The benefit is that the account can be accessed by multiple users from different terminals. The drawbacks are that there is no access without an internet connection and you are limited to the templates provided. Most users will not have needs more sophisticated than what is available.
One of the leaders in this field is Mint.com which was recently purchased by Quicken and should provide users with an intergrated on/off line system shortly.
Other online services include Quicken's online personal finance site and Wesabe.
Regardless of the system, the most important part of a personal finance program is how consistently it is used. Experiment; take control of your finances; share your experiences.
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