Budgeting software is a type of computer software used to help people manage their personal finances. The software keeps track of income, spending, banking, investment and credit. Budgeting software is one of the most popular types of productivity software offerings available.
Budgeting software is also available for business use. However, budgeting functions are usually built into an accounting system, providing a wide range of functions, including payroll and account management. While these products are effective, they do not work well for personal use due to the fundamental difference in the activity.
There are two major companies that offer personal budgeting software packages, Microsoft and Quicken. Both companies offer software designed to be installed on a home computer. The features available differ between the two products, but the core functions are the same.
In the initial set-up, approximately 45 to 60 minutes is required to create your list of creditors, banks, employers and family members. You will also need to create categories for spending, based on your lifestyle.These software packages allow you to set your own budget for categories and then compare your actual spending to your budget.
In order to have this comparison and tracking service, you will need to update the system with all your financial transactions. This can be done manually, or via data download from your online banking system. Budgeting software on your handheld computer is slightly different.
Using this type of software, you manually create the budget amount in each category of income and expenses. Then you update the system as you spend. The value of this type of software is that the update is instantaneous. The downside is the small number of reports that this type of software can do.
It is now possible to have budgeting software on an iPhone or iTouch. Both these devices have computer chips and processors. However, there is a limit to the types of budgeting software available for us on these technologies, due to the limitation set out by the manufacturer.
When investigating budgeting software, look for one that provides clear indicators when you exceed your budget in a particular category and which provides money management advice. Some useful tools include debt repayment calculators, the impact of a lump sum payment on your debt and investment management tools.
Make sure that the budgeting software that you select has an easy to use upload and download utility. It is very useful to be able to upload all the banking and credit card activity for a period. Downloading is a great function if you need to provide a report to your bank or to view the data in a different way.