Track Personal Finances with Personal Budgeting Software for Mac and PC

So many of us dig ourselves into a financial hole and then it is like a scene from Ground hog day, the same thing every day with a slight variation in the hope it just all goes away. We never track personal finances and have no clue of our actual financial situation other than it isn’t pretty. Indeed you could argue that our leaders are doing exactly the same thing, but I digress. Sometimes it is just so overwhelming to face our financial dilemma that we choose to ignore it.

What we are going to discuss here how to track personal finances with personal budgeting software. Other times our best intentions are doomed to failure because we choose to go hog wild on a solution. Much like the diet and work out plans from January 1 that never get off the ground, resolutions set so many of us up for failure without realizing it.

If you are tired of the daily grind and worry and want to “trade out of it” where do you start? The first place is the recognition that you need to change, but not all at once. Secondly that it all up to you and is no one else’s responsibility. As Robert Plant screamed out thirty years ago, “It is nobody’s fault like mine”. I don’t want to hear any buts about whose fault it is, because clearly know one else cares, you must take responsibility. A major part of why you are in financial trouble is you have habits that allow it, time to develop new habits.

Once you have recognized change is in order and that it is not going to be easy it is time to set yourself some financial goals. These are to be intertwined with your personal or non financial goals. To make these goals achievable we will track personal finances with personal budgeting software. These goals would include when you want to retire, do you want to work for yourself, and do you want to have alternative investments or projects? Whatever these goals are you need a step approach to reach them within a specific plan. So we know where we want to go but how do we get there?

Back to those habits, many of our habits become impulsive or second nature. One of these is spending; you will be shocked to know what you actually spend money on and how much of it is unnecessary or wasteful. We are going to take a month and take note of all our spending, yes ALL our spending.

Track personal finances with personal budgeting software such as excel, Money or Quicken in a spreadsheet if you can. This will give you visual representation of where it goes (graph it if you like). We will categorize what we are spending things on, food, utilities, health and whatever else that come out of your pocket. What you find is that spending patterns surprise most of us, that cup of coffee, that meal out or those few things for the house. It adds up.

Remember we are in this for the long haul, so don’t flip out and try to stop everything all at once, we will aim to try to address and change one spending habit. Now you know what you are spending pick a habit to work on. Do you really need that Starbucks coffee before work, you don’t have to lick the coffee habit perhaps you brew it home or wait until work. This adds up 5 star bucks coffee a week is over $20, a month is $80 and a year is nearly a thousand. Plus do you buy a little cake for a few bucks when you get that coffee, and a paper. You can see where we are going with this.

Next we budget our spending as we track personal finances with personal budgeting software. Let’s not make the changes so drastic that they are doomed to failure let’s set limits. Let’s say we have a limit at Starbucks where you meet up with Betty from work there and enjoy the experience. You want to slip your new habits into your life, and then they become new habits.

You want to remove as many roadblocks as you can. One that most of us detest is setting budgets, they are dull, they are time consuming, I am hopeless with numbers and the excuses go on. You have a few solutions, you probably have a program already on your computer that makes it easy or there are a number of free resources to help you. One resource I like track personal finances with personal budgeting software is Mint.com which has free software that allows you to apply your goals, from short to long term to your budget. It also assists in setting caps on your discretionary spending.

The one thing with mint.com that makes it harder for some people reducing their spending is it doesn’t automatically track cash. Many financial planners recommend having cash on hand as your means to curtail spending and have spending caps on. This personal budgeting software tracking system uses debit cards which go back to the website and plug into your budget. Let’s take our Starbucks; you gave it a $10 monthly cap. When you hit that limit the site automatically sends you an e-mail alert. Another way in this example is to buy a Starbucks gift card for the $15 each month and that caps your spending right there.

This is the first new spending habit we are developing, recognition of discretionary spending and capping it. So now we can track personal finances with personal budgeting software, and for free. This is the first in a news series on rebuilding your personal finances.