While it is possible to use a spreadsheet to create a simple personal budget you will find that personal budget software can offer you a lot more advantages. The software will help you to create you budget more easily and also manage it on a day to day basis.
Most personal budget software applications will make your budgeting faster and your budget will be more accurate as you enter both income and expenditure transactions as they occur. For each budget category the software can let you know what your total expenditure was, and a lot of applications will warn you if you are getting close to exceeding your budget.
So here is what we recommend you look out for when comparing different personal budget software applications:
Go for Personal Budget Software with flexible Categories
The best personal budget software will allow you to create different categories for your income and all of your costs. This is fundamental to a solid budget, and it is worth paying a little extra to have this functionality.
Once you have created your categories then the software should allow you to change them. Maybe you want to rename a specific category or delete an existing category. Some of the lower priced personal budget software will force you into using a default set of categories. They do this for both income and expenditure that you cannot change so watch out for this.
Look for software that enables you to create sub categories as well. For every transaction in your budget you need to assign the right category. In some cases sub categories are required to break things down into the detail that you need for your reporting.
Flexibility to handle monthly changes
Bills have a habit of changing from month to month, so your personal budget software needs to be able to handle this. You are probably going to use more electricity and gas in the winter so the bills will be different to other times of the year. If you have telephone plans then these will certainly vary on a monthly basis.
For some people their income changes each month as well. This is particularly true for self employed people. If you have a day job and run a side business at home then your income amounts will change.
Some personal budget software will force you to enter the same monthly amount for your income. Even if you have a job this can change with bonuses, promotions and so on. Do not go for software that does not allow you to change monthly amounts for your income or expenditure.
Consider Envelope Budgeting
This is particularly useful if your income and expenditure varies each month. Expenditure will vary for most people so envelope budgeting is a good method to use. With envelope budgeting you have a simple yet systematic way of saving money for future bill payments. A lot of personal budget software applications have an envelope budgeting functionality.
Some personal budget software works on the principle of envelope budgeting by default. This means that it will automatically roll over funds that have not been used into the budget for the next month. So if you budgeted a $75 expenditure for your electricity but the bill is not due until the following month the software will roll over this amount.
What kind of Budget Reports do you want?
For a lot of people a simple monthly, quarterly and annual budget report is all that they need from their personal budget software. Other people like to check their budget more thoroughly. They need an application that can provide a real time report in the dashboard and the ability to display and print reports in any time frame.
When you are starting out with your personal budget you may not deem this fine reporting necessary. But as you become more in control of your money your views may change about this. So to avoid future disappoint we recommend that you choose personal budget software that has good reporting functionality.
Also think about what you want the budget reports to show you. All budget software will show you the difference between your income and expenditure in reports. But you may require more detail than this.
How Secure is the Personal Budget Software?
If you intend to use personal account numbers and credit card numbers in your budget software then you need to be sure that this information will be stored securely. You need an application that uses data encryption to prevent your important information leaking out. This is especially true if you plan to use budget software online.
Passwords are important as well. A lot of budget applications will have a password protection facility. If yours does not then find another way to prevent unauthorized access to your budget such as an operating system password. Use strong passwords that will not be easy to guess.
Exporting your Budget Data
There are times when you may want to export data from your personal budget software into a spreadsheet for further analysis and a lot of applications have this facility. You can export a CSV format file and then use your spreadsheet program to import it. Check that this feature exists before you invest in budget software.
Is the Personal Budget Software easy to setup?
These days you will find that most budgeting software is easy to setup, but there are always exceptions. You do not want to purchase a program that requires a computer and accounting expert to set it up for you.
Check to see if the software creators state that the setup is easy on their sales page. If you are in any doubt then contact the company and ask them about the process of setting up the software.
Now go and find the right Personal Budget Software
Now you know what to look for with personal budget software you can start looking for solutions that are in your price range. Use your favorite search engine to find the software and comparison websites.