The beauty of money management is that it is accessible to almost anyone with a pen, a pad of paper, and a will to get their finances under control. However, just because you don’t need fancy tools to manage your money doesn’t mean you can’t benefit from them.
Plenty of people might think themselves capable of staying accountable to their financial goals without outside aid — and plenty of people tend to be wrong. If you find that you have long struggled to manage your money effectively, you might consider investing in a money management app or program for some much-needed help.
You Need Help Understanding Account Balances
In 2020, it couldn’t be easier to check your account balances. Almost all banks have moved online, so you can log into your account from any internet-connected computer or mobile device and see how much money you have (or owe) in each account.
Yet, even with this increased access and greater ease, you might not visit your bank and credit accounts with proper regularity. Experts say that you should check in on your accounts at least once a month, to understand their status and verify that no one has used your accounts without your consent. Checking your account balances and activity in this way can be time-consuming, especially if you have many different accounts in many various financial institutions.
Money management software can help aggregate all your disparate account balances so that you can check them in one simple, straightforward app. Management tools will combine your checking accounts, savings accounts, and bills into whatever configuration you choose, so you don’t have to do any mental gymnastics to understand what money is where.
You Need Help Building Budgets
For many personal finance beginners, building budgets is a dreaded chore. How are you supposed to know how much money to devote to a particular category of expenses? What if you don’t make a consistent paycheck — how do you budget then? Then, how do you track your spending promptly to ensure you are staying true to your budget? There are so many budget-related questions that first-time budget builders struggle with.
Money management apps help enormously with the process of building budgets and staying accountable to them. Some of the most robust software will almost build budgets for you, by asking about your financial goals, your income, your debt, and more. Then, the tools will track your spending, automatically categorize each purchase, and factor it into your budget. If you are in danger of exceeding your budget, your app will alert you and help you make better spending and saving decisions for the future.
You Need Help Paying Bills
While managing account balances and seeing your savings increase can be rewarding, even fun, you probably don’t relish the idea of paying your bills. However, getting your bill payments under control is a critical element of financial health; bills can swiftly drain your savings, impact your credit score, and otherwise put your money-related goals out of reach.
If you have developed poor bill-paying habits, you might need money management tools to get you back on track. Software can automatically pay your bills every month, sourcing money from specified accounts. You can also determine whether you want to pay your bills in full or make smaller payments each month. You can decide which bill-paying strategy is best with the help of money management apps and the advice of finance gurus.
You Need Help Organizing for Taxes
Few countries do taxes like the United States. Elsewhere, businesses or national tax institutions send citizens a bill for what they owe in taxes. Here, you are responsible for knowing the tax code, tracking your income and reporting the exact right amount to the IRS — and if you make a mistake, you could be looking at severe fines and even jail time.
If your tax situation stresses you, but you don’t have enough cash to hire a tax accountant, you should strongly consider using money management software for your tax preparation. Especially if you have an atypical tax situation — like you are a gig, freelance, or self-employed worker who needs to track work-related expenses — these tools calculating taxes so much simpler.
Once you become more comfortable managing your money with software, you might feel confident enough to migrate to more hands-on approaches like custom-made spreadsheets or even a binder with written notes — or you might stick to the automated tools. As long as you feel in control of your finances and see yourself taking steps toward reaching your financial goals, you should feel free to stick with the money management software.
Final Thoughts on Money Management
We could all use a little help every once in a while. When it comes to our money we can't get lazy. Laziness with our money can lead to bad things like debt. Checking in frequently with your money is the best way to go. Find an accountability partner to help. That might be a trusted friend, or a smart little app right on your smartphone. Anyway, you accomplish it will help you build wealth in the long run.
Brian is a dad, husband, and an IT professional by trade. A Personal Finance Blogger since 2013 who, with his family, has successfully paid off over $100K worth of consumer debt. I want my three children to handle money better than I ever did at a young age. I have been teaching them as much as I can for the last 10 years. My goal is to continue to champion the financial literacy message and then why I created the “How To Rock Your Money” book. To help teenagers navigate their financial futures. I hope my family’s story of paying off over $100,000 worth of debt will inspire and motivate you to take control of your money. He blogs at BrianBrandow.com