For most folks, expense management is something that’s done solely at business establishments. You balance income with expenditures to ensure that you get profit. However, what tends to get overlooked is that the same process should also be used at homes.
While managing expenses for a business are done on a computer, people tend to veer towards a more Jurassic method at home. Bills and checkbooks are spread out on the kitchen table and you at times working frantically with a calculator trying to make sense of everything. You dig through all the sheets of paper, checking due dates to find the bills that need to be paid before the rest.
The great news is that the technology available to make a business a success can also help you get a goodnight’s sleep. No more worrying about your expenses at home and stressing over whether you overlooked anything. But before you start shopping around for personal expense management software, you should look at the current challenges you have with managing your budget at home.
Home Expense Management
Managing your finances at home basically means working with a budget. That word alone is enough to send chills down your spine. You are definitely not alone in dreading the word budget as most folks associate it with being deprived of whatever they want. But that is a myth that you need to break.
According to Debt.org, America’s debt help association, a budget is simply a documentation of your cash flow. It basically answers two important questions, how much money is coming in and where is it being spent on. It is also the foundation of financial success as you are able to maximize your household’s well earned money.
However, successfully managing your home expenses may sometimes feel like the proverbial unreachable star. There are many factors and challenges that affect how you manage your finances. Below are some of the most common roadblocks that people encounter when working on a budget taken from the simpledollar.com.
- No Time to Budget – Whether you’re working or a home maker 24 hours in a day doesn’t seem to be enough to get things done. There is always something that needs your attention, so sitting down with the bills and everything else isn’t something that you can easily find time for. And if by some miracle, you are able to squeeze this into your busy schedule, you may be too tired or distracted to be able to do it efficiently. You might end up overlooking a bill or over drafting your account.
So, even if you really wanted to, you’re just not able to have the time to work on your finances at home.
- Forgetting Bills – If only all bills came in similar intervals then you would never have to worry about this. Unfortunately quarterly and biannual bills can wreak havoc on your careful budgeting.
- Forgetting Savings – You may have at one time planned to start an emergency fund or perhaps make savings for a future holiday. Unfortunately these smart ideas never went past the “plan” phase. This is usually either you forget about your commitment to set aside some of your income or you procrastinated and promised to start the following month.
- Emergencies – A carefully planned budget can go askew when emergencies happen. Expenses that had not been factored into your household costs will certainly be a drain and affect your financials.
Expense Management System
In the business world, companies use expense management software to run a tighter ship. It ensures that all expenditure requests and approvals are done in a timely manner. In addition, it keeps track of employee incurred expenses on business related activities.
A similar system but one designed for home use is an efficient solution to the challenges mentioned earlier. House expense management software has features that would make handling your finances more manageable. But what exactly is it?
An expense management tool is software that helps you track your personal cash flow. You can create categories for your different expenses and use the automated system to make sure you are on top of things. This form of budgeting has become increasingly popular in the last few years as more and more people are discovering how beneficial it is.
There are a variety of systems available for you to choose from. The ideal choice would be to start off with free home expense management software first to get used to how the system works. Once you are comfortable with automated budgeting, you can look for software with more advanced features.
Features and Advantages
As with any other software technology, developers strive to make their product the most user friendly and cost efficient. They load features that customers can benefit from to attract more users and be hailed as the best expense management tool. Here are some of the common features that you can enjoy from the available systems online.
- Account Summary – This feature allows you to store your information such as credit card and bank accounts, mortgages and investments. It makes it easier for you to identify trends like deposit dates so you can make changes or adjustments. With all your information available at a glance, you don’t need to keep hunting through piles of banking and credit cards statements to verify details.
Some home expense management software can even be linked to your online bank accounts so that the information accurate and updated real time.
- Cash Flow Management – Have you ever found yourself wondering about where your money goes? Or have you ever forgotten to pay bills because you overlooked the due date? Then this feature is perfect for you. Software providers like Quicken have features that allow you to easily track your bills so that these get paid on time.
In addition, it provides you with details of your spending habits in platforms that are easier to understand and analyze such as graphs and charts. The information can be customized so you control what you see. You can choose expenditures in specific time frames such as within the last week or month or categories like credit card or cash purchases. Having these details available will help you understand how your income to spending ratio.
- Budgeting – Not only is budgeting a scary word for most, it is also a skill that not everybody is gifted with. Saving money and having goals is much easier said than done. Expense report management software can help you out with this. With this feature, you can set budgets on different expense categories to help you control your spending activities. By having this visual reminder, you can curb the urge to purchase something necessary. Most software such as the one from Mint provides you with the average monthly for each category so you can set realistic budgets. These are amounts that you can actually work with and stick to without needing to sacrifice the essentials.
This feature will also help you to finally take the holiday or emergency funds out of the planning stage. It will provide you with reminders and updates to show you how close you are to achieving the amount you had set out to achieve with these savings.
- Tax Management – Preparing your tax forms can be a challenge and time consuming. You have to dig into piles and piles of bills, receipts and bank accounts to make sure that you have accurate data. According to The Wall Street Journal’s online publication, there are software that allow you to export financial data onto tax preparation programs. Not only will this cut time, but you can also guarantee that the data will be correct.
On the Homefront
With all the features that a personal expense management system has, it is easy to see how it can be the best solution for challenges you often encounter when managing your finances. This business tool can certainly make budgeting a lot simpler. According to USA News and World Report, 3 in 4 people get better control of their finances by using software or tools to manage their finances. Below are the challenges discussed earlier and the features that provide resolution.
- No Time – Budgeting with an automated system does not take as long as when you need to do it manually. Because all the information you need is already available, you can check, track and make payments muck quicker.
- Forgotten Bills – You no longer have to worry about forgetting to budget for that bill that only comes every quarter or every six months. You can include this in the budgeting feature where it will be broken down to match your income patterns. You can create a separate category where money will be allotted into these payments every month to make it more manageable. In addition, with the financial tracker, you can view the pattern of your transactions and never have to be surprised ever again. So whether it’s monthly quarterly or even annual, you would have it covered.
- Forgetting Savings – You can use the budget and goal feature t set up the emergency or vacation funds that you have been planning for. You can set the timeframe or goal amount so the system can help you allocate a portion of your income to go towards these savings.
- Emergencies – With the budget feature, you can ensure that you set aside money that can be used for unplanned and unforeseen situations. This will reduce the impact emergencies would have on your budget.
Whether you’re a professional or a home maker, an expense management system can make budgeting a process that you no longer need to dread. The features make sure that you and your family are able to do what needs to be done to protect your finances and work towards stability. Whoever said money matters were complicated had surely not used these systems before. Check out CrowdReviews.com’s list of expense management software to discover your options.
Trevor Price
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