Personal Budgeting Software

Written by Sarah Provost
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If you often find yourself with too much month left over at the end of your money, personal budgeting software might help you turn your situation around. Many people who find themselves in such circumstances have little or no idea where their money goes. Tracking those fly-away dollars is the first and most important step on the road to financial stability.

The first step is to list your basic living expenses. This category will include your mortgage or rent, utilities, groceries, insurance, medical expenses, transportation costs and taxes. If you have children, you may need to add child care and/or tuition. These are your fixed or non-discretionary expenses.

Reducing Non-Discretionary Expenses

If you are carrying credit card debt, you should create a category for paying it off. Consider it as much of a non-discretionary expense as your mortgage or car loan. Pay the most on the card that has the highest interest rate, but be sure to budget more than the minimum payment for each card.

Reducing Discretionary Expenses

Your discretionary expenses include things such as clothes, dining out, fast food, entertainment and other personal expenses. If you need to do some cutting, this is the place to do it. If you keeping track of all your spending, even your morning latte, you may be surprised at how much money leaks out of your pockets on nonessentials.

Start reducing your spending in the category that means the least to you. If that latte is necessary to start your morning right, but you aren't particularly attached to your cheeseburger at noon, keep the latte and bring your lunch to work. Your waistline will benefit as well as your budget!

It's important not to cut out all your "fun" expenses. As with a diet, being too stringent can lead to binges. Try substituting less expensive versions of the things you enjoy. If you love movies, rent a DVD rather than going to the theater. If there's a movie you really want to see when it first comes out, go to a less expensive matinee showing.

Plan Ahead for Seasonal or Annual Expenses

One place where beginning budgeters often go wrong is that they list only their monthly expenses. It's imperative that you set aside a budgeted amount each month for annual and seasonal expenses. Insurance premiums, taxes, membership fees, holiday gifts and seasonal travel are several categories that might be included. By spreading these expenses out over the course of the year, you won't be caught short when big bills come due.

Of course you could do all this with a pencil and a notebook, but personal budgeting software can make it less of a chore. The software will suggest categories so that you don't forget something important. Calculations are automatically done for you, so you can easily keep a running total in each category. You can set a budget amount for each expense, and the software will let you know how much you have left to spend. You can often reduce expenses painlessly, once you are aware of where your money actually goes.


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