Finance personal software was never something that I thought was needed in my life. But as time went on it seemed that I could not keep up with bill payments and debt started creeping at my door. This was a situation I never thought would happen to me. I mean this happens to other, unorganized people, you know, those with no self control, but not to me. But believe me, it did happen and it wasn’t pretty. That’s when a friend told me about using finance personal software.
# 1 – How to budget
Learning how to budget wasn’t the real problem, it was just keeping track of all the information that seemed to be the issue. She assured me that if I learned the software and stayed true to my budget, all the money stress would go out of my life. Well, with this kind of a guarantee, I definitely wanted to give it a try.
# 2 – Mvelopes software
The software I chose was Mvelopes by a company called Finicity. I chose this finance personal software program because it is web based, which means I didn’t need to think about getting special PC or Mac personal finance software. One of the best features is that it connects to my Internet banking accounts and my credit card online account, pulling all the transactions from those accounts. This means I don’t have to sit at the computer and enter receipts because the receipts are automatically pulled into the software every time I log in. Yup, it’s awesome!
# 3 – First step – Spending categories
The first step to setting up this finance personal software program was to list all my spending categories. There are some categories that are pre-made for you, but you can rename them or make your own. I wrote down all my categories on a piece of paper first then made up my budget categories or envelopes in the software. When you set up the envelopes you will have to put in the amount you need for each envelope. You may be in a position where you don’t really know how much you are spending in certain categories.
Do not let that discourage you. Start with the categories that you are sure of, for example your house payment or rent. For the amounts you don’t know or are not sure of simply keep track of your spending for a week, then for two weeks, then for three weeks, etc. At the end of one month, you should know what your monthly spending is for things like gas, groceries, entertainment, etc. At that time you can set up the rest of the categories based on what you spent for one month.
# 4 – Unexpected expense
Of course there are going to be things that you may need to guess at for awhile. For example, car repair, house maintenance, gifts, Christmas, etc. The way I handled these expenses was to guess at the amounts just to set up the budget and then continued to keep track of these expenses. After one year of using my finance personal software, I totaled the amounts and divided by 12, this is the amount that needed to be budgeted for on a monthly basis. Now when a car repair comes along, I have the money set aside for it and am not stressed about how the repair bill is going to be paid.
Understanding the importance of personal finance, getting on a budget and using finance personal software has totally changed my life. I no longer have the stress of worrying about money. I am even learning how to invest because I have the extra money where as before, that would not have been an option for me.
photo courtesy of Mabel Vargas, Flickr
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