Personal Accounting Software
Do you use Personal Budgeting Software also known as Personal Accounting Software? If you’re like most people, the answer is probably no. You may even be wondering what this is? There are a number of personal accounting software choices available to Canadians. Some of the most common include:
At Red Seal Financial Ltd. we recommend www.Mint.com for three reasons.
- It’s Free – So you can get started without having to make any initial investment.
- It is Cloud based – So you never have to worry about installing updates, making backups, or dealing with technical issues.
- It come as an App – So you can keep up to date on your cashflow and personal budget from the device you use most: your phone.
Using a personal accounting software will give you financial superpowers. Don’t have a budget? It will help you master one. The insight gained from knowing where every penny is going will help you understand your own spending patterns. It also gives you a real-time feedback loop that can help you change your behaviour in positive ways.
Creating a financial plan begins with knowing the basics. It’s amazing how many people aren’t able to answer simple questions like:
What do you spend on groceries every month?
What do you spend on gasoline every month?
What did you spend on holidays last year?
How much interest did you pay on your credit card last year?
Mint.com can help you answer these questions and more. And when you know where you’re money is going, it’s a lot easier to find ways to save it.
Siging up for www.Mint.com is as easy as going to the website and registering for an account. Allow about 45 minutes for the initial setup.
Once you have your account setup, you link your bank accounts and credit cards and wait as the software downloads your transactions. This download feature is the core of the software as it eliminates any data entry you would historically have had to do with personal accounting software. Once your transactions have downloaded, you will need to go through and categorize them into expense and income categories such as salary, grocery expense, auto expense, etc.
The best part about Mint.com is that it learns. If you get your groceries at the same grocery store, it will begin to automatically code these transactions without your involvement. Most people have a routine and after a couple months, you will likely be able to take care of your personal accounting in less than 5 minutes a week right from your phone or tablet.
After a few months of doing your personal accounting you will be able to use the reports to see where your money is going and begin to truly understand your spending patterns and how to change them for the better.
Helpful Tip – Set up an expense category called ‘Transfers’. Use this when you are coding transfers between your accounts. The balance in ‘Transfers’ should always equal zero because if you transfer $500 out of your bank account, you should also have an offsetting transfer of $500 in to your credit card. If you ever see a balance in the ‘Transfer’ account then you’ve missed something.