Using an effective home budget software program is a great way to discover the financial leaks you do have, and then plug them. Have you ever noticed how easy it is to make bad financial decisions? When you wish to purchase something you discover there is not enough money, although you know you make enough to pay for all your expenses and a little bit more.
Seeing your spending habits up close and personal is a huge reality check and effective eye opener. When I coach clients, this is the most effective thing we do to help them finally get control of their money as opposed to their money controlling them. As you go through this process you may even discover that you have more spending money then you realized.
Here are three ways to help you pick out the right home budget software program and get the most effective use from it.
1. Try a free budget software version of the most popular programs such as Quicken, Microsoft Money, etc. For most people, purchasing the pro version is overkill. There are usually more functions than what is really necessary and can be too complicated for which you are trying to do: track spending in categories. Remember that you simply need a way to track your income and expenses, from different sources in a way that makes sense to you. It should allow you to put your expenses in different categories such as the house, automobile, food, utilities, phone, and the like. Do a Google search for many more options.
2. Being consistent 100% of the time is the key ingredient for making a home budget software program work for you. If you do not enter each of your expenses accurately you will not get out a realistic picture of your financial situation. There is an all older computer term that states, garbage in garbage out. Please ensure that both you and your spouse are on the same page with this. If both of you feel comfortable using a computer, then each of you could endure in your own expenses.
However, it is more usual to find that one of the spouses is designated to enter in all the expenses for simplicity sake (the and for the sake of the other spouse's sanity). Simply keep a box or an envelope were all the receipts will be placed and then designate one or two days in each month to categorize them in your home budget planning software program.
3. Sit down to analyze the reality of where your money is going after you have been using your home budget program for a couple of months or so. You will be surprised, and many times shocked, at how much you really do spend on certain things each month; coffee, eating out, movie rentals, entertainment, food, and the like. After effective analyzing, you are now in a position to start making more informed decisions on whether to cut back your expenses so you are able two afford the things you really do need or want.
When you start creating a household budget, you do not have to stop all spending until you "realize" your current spending habits. Just by beginning in going through the process, you will immediately become more aware of your spending and actually reduce it as you begin to mentally examine many of your purchases. You may also wish to begin with a written system, which is where I always have my financial coaching clients begin. It brings the reality of spending home a little more; after doing it manually for a while, the tracking and budgeting process is more thoroughly understood and a lifetime habit is developed.
Home budget software simply makes the process a bit less time consuming with reports being produced to help you see your financial picture from different angles. It has been an invaluable tool for myself and then my family for over 20 years. You may believe a lot of money is being spent eating out or some other activity; however, seeing the actual number right in front of you helps you to make the decision to reduce expenses and save a whole lot easier. What have been your experiences? Tell your story below.