Keeping on track with your finances has become easier, as personal financial software programs become more automated and includes new features. Here are six ways to get more out of your financial software, and keep more money in your wallet. (For related reading, also check out Budgeting When You're Broke.)
TUTORIAL: Budgeting Basics

1. Set Up the Automatic Download Feature
Most personal financial software programs now have automatic download features that allow you to connect with your bank accounts online, and pull the transactions directly into the program. This saves a significant amount of time over inputting each transaction manually and making sure the bank balance is correct. This service is free at most banks, but there are a few that charge a monthly fee for this access. Check your bank's rules and policies before signing up.

2. Prepare a Monthly Budget for the Next 12 Months
Tracking your past transactions is only part of smart financial management. You also need to know where you are headed. Plan out your next 12 months of spending, and be sure to include all of your known expenses plus a buffer for unknown ones (such as repairs). Apply the balance of your income left over every month after expenses to either debt repayment or savings. Planning out your surpluses ensures that they are used to your best advantage.

3. Input Bills When Received
One of the least-used features in personal financial software is bill management. You can input a bill when it comes in the mail, along with its due date. The program will warn you when the bill is coming due, so that you can avoid interest and late charges on overdue bills. Some programs also allow you to pay the bills through the software, saving even more time.

4. Dedicate Two Hours Per Month to Review Your Data
Set up an hour mid-month, and another at the end of the month to look over your transaction history and your budget to see if you are still on track. Most software programs have a number of different reports that you can customize. A commonly-used one is a comparison of the month-to-date expenses by category and the budget. You can change the dates to look at any period. You can also compare this month's expenditures to last month. Regularly analyzing how your actual spending ended up, in comparison with what you thought you were going to spend, will prevent you from running into unexpected and costly overdrafts in the future.

TUTORIAL: Banking

5. Track Your Net Worth
Financial software programs can also track your assets and liabilities over time. This will show you how your debt is decreasing and your assets are building. When you set spending goals, also set savings and debt reduction goals so that you know you are on track to build your net worth. When setting loan goals, keep in mind that only a portion of the payment pays down the loan balance, while the rest is an interest expense.

6. Prepare an Income Tax Estimate in Mid-December
With all of your income and expenses in the software program, it's possible to run an early tax estimate so that you know how much to set aside for taxes. Preparing this estimate before year end also gives you options for tax planning, such as increasing charitable donations. If you run a small business from your home, make sure that your business and personal expenses are separate from each other in order to calculate your net business income correctly.

The Bottom Line
Use all of your software program's functions to manage your financial life effectively. Take the time to review your transaction history and tweak your budget. Personal financial planning can make a vast difference in your overall wealth. (For additional reading, also see The Beauty Of Budgeting.)

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