PERSONAL FINANCIAL MANAGEMENT: Guide to Personal Financial Management

Personal Financial Management
Photo Credit: Forbes

Due to the overwhelming and ongoing nature of personal financial management, even the most financially savvy person may become confused or have limited vision. At its most basic level, personal financial management is the process of evaluating your financial situation so that you can make the most of your money in your current life and plans for the future. In this post, we’ll examine personal financial management software and courses. Let’s grove!

Personal Financial Management

The process of planning and budgeting for how your money is saved or spent is known as personal financial management. Setting and achieving financial objectives, such as retirement savings, are an important part of managing your personal finances. To manage your money effectively, you must first decide what your long-term objectives are. What you need to do to get there will depend on whether you have a specific objective in mind. Thankfully, there are several software and service solutions available that can support you in achieving your goals.

The second step in personal financial management is to develop a budget after deciding on a goal. Understanding your spending and saving patterns will help you figure out how to combine them with your long-term objective. There are numerous ways to create a sound budget. Alternatively, you can use software, such as that available through online platforms that are frequently linked to current bank accounts, or you can do it manually using pen and paper or an Excel spreadsheet. Whichever approach you choose, be careful to take into account your cash flow and how you wish to approach debt repayment. Paying off credit card debt is crucial if your objective is to minimize debt and improve your credit score.

While some people choose to pay off their credit cards with the highest interest rates first, others prefer to do so first in order to cut the number of payments they must make each month. The greatest solution for you and your financial plan must be determined by you. In order to increase your overall net worth and increase your financial security, proper budgeting should also account for income taxes and contributions to an emergency fund.

Personal Financial Management Software

Personal financial management software has been developed by modern technology to assist us in better money management and financial organization. Before, people managed their finances by waiting for their bank account statements or going to the closest branch of their bank. Thanks to technology improvements, managing our finances and making investments for the future are becoming more effective in the digital era. To track where our money is going and how much we are saving for the future, we rely largely on our smartphones and laptops these days. With a few clicks, you can also pay your bills.

Examples of Personal Financial Management Software

Here is a list of the top personal financial management software programs that can assist you in increasing your savings and reining in your expenditures to help you make a decision.

#1. Quicken Premier 

A desktop program named Quicken should be familiar to anybody who is interested in personal accounting. In addition to handling personal finances, assets, and company accounts, its Premier edition is suitable. You may link activities between your accounts thanks to this feature, making it simple to transfer money between them. The software also provides budgeting capabilities that will enable you to manage your spending and save money at the same time.

#2 Personal Resources

Consider Personal Capital if you wish to manage all of your financial accounts on a single platform. The software can be used for investment accounts, mortgages, credit cards, and bank accounts. You can use it to keep track of your money and valuables. Additionally, it provides guidance depending on your objectives and financial circumstances.

#3. YNAB 

You Need A Budget, often known as YNAB, is a piece of personal financial management software that enables you to keep tabs on your spending, adhere to a budget, and control your overall financial plan. It aids in developing better spending and saving habits and financial knowledge. Additionally, it offers courses on harder financial subjects.

#4. Mvelopes

If you’re used to managing your budget by placing cash in envelopes, Mvelopes allows you to do the same thing digitally. The budgeting method used by this personal financial management software is the same: You will divide your money into various digital envelopes designated for different expenses, such as savings, phone bills, food, a mortgage, etc. You are free to spend the remaining cash on other things or to hold onto it until your next pay period if it is still in an envelope.

#5 Mint

Mint is another well-liked tool for creating budgets. With the help of the Mint personal financial management software, you may better manage your finances by finding areas where you can minimize costs. By allowing you to set up due date reminders, Mint also aids in prompt bill payment. The application offers accurate info on how much you can invest in particular things through its budget categories.

#6. Money Dashboard 

Money Dashboard is among the top personal financial management software programs on the market. A pie chart that displays your monthly spending on things like electricity, food, and transportation helps you better understand your spending. It also provides a quick overall balance that shows you how much money is available across all of your accounts. You may assess how well you’re managing your money by comparing it to the amount from the previous month.

#7. FutureAdvisor

Consider FutureAdvisor if you’re a DIY investor seeking personal financial management software with an investing focus. It offers individualized advice on how to vary your portfolio. Do you know what a Robo-adviser is? It is an algorithm-based computerized investment advisor that assists you in managing your portfolio. FutureAdvisor offers a free Robo-adviser edition for more thorough portfolio management if you want to give it a try.

Personal Financial Management Courses

Personal financial management courses give you the chance to learn from experts who can walk you through the most important parts of personal finance step-by-step while testing your knowledge along the way. Even though many excellent financial management courses are free or very inexpensive, it’s important to choose one that will be worth your time. 

Frequently, people read or hear something from a personal finance expert or a course that they feel compelled to act on. However, some courses in personal financial management can not only improve your money-management abilities but also encourage you to think about your spending and saving habits and help you lay a solid basis for success.

Here are 12 good financial management courses you can take.

Personal Financial Management App

You can track your expenditure with the use of personal financial planning management apps that can link to your bank account. These apps can assist you in tracking impending bill payments, identifying the categories in which you spend the most money, keeping track of your credit score, and managing your investment portfolio. Some even let you pay your bills straight through the app. For managing your total finances, the best personal financial management apps offer a variety of functions (email notifications, bill deadlines, subscription tracking, shared wallets, etc.). No matter what smartphone you own, you can enjoy all of the applications on our list because they are all compatible with both iOS and Android. These are the best personal financial management apps one can get. 

  • Best overall: Mint
  • To Pay Off Debts: You need a Budget
  • the best option in wealth management: Personal Capital
  • The Best for Paying Bills: Prism
  • Best for Budget planning: EveryDollar
  • Best Visuals: Ads on mobile

What Is the Importance of Personal Financial Management?

Once you start managing your finances, you’ll have a clearer understanding of where and how you’re spending your money. This may enable you to stick to your spending plan and possibly grow your savings. By practicing good personal finance management, you can learn to manage your money well and reach your financial objectives.

What Are the Sources of Personal Finance?

Personal financial resources include the following:

  • Personal savings.
  • Borrowing.
  • Inheritance of money.
  • Financial institutions.
  • Having a job or business.

What Are the Main Components of Personal Financial Planning?

The main components of financial planning are listed below.

  • Cash flow analysis.
  • Risk management.
  • Superannuation planning.
  • Retirement planning.
  • Investement management.
  • Taxation planning.

What Are the Five Steps in the Personal Financial Process?

The personal financial process consists of these five steps:

  • Step 1: Recognize your position. Understanding your existing financial condition is the first step in developing a financial plan.
  • Step 2: Set your goals.
  • Step 3: Plan for the future.
  • Step 4: Handling Money.
  • Step 5: Examine your plan.

Conclusion

From the foregoing, it can be inferred that in order to live a happy life, it is crucial for each individual to plan and manage their own finances. Every person should have a personal financial plan so they can meet their financial obligations and goals, retire comfortably, become financially independent, make smart financial decisions, and take advantage of every financial opportunity.

Personal financial management enables us to live comfortably, with the security of a future and the ability to spend money on what makes us happy. The value of sound financial management and planning is evident in every aspect of both personal and professional life. No matter the financial situation, everyone needs to learn about personal financial management and apply it to their lives.

Since none of us are born knowing these things, it should be everyone’s job to learn how to plan and manage their own finances, because doing so not only makes us happier people but also, over time, aids in the long-term growth of the country.

Personal Financial Management FAQs

What Is the Main Goal of Personal Financial Planning?

Establishing a financial plan is the main goal of personal financial planning.

What is the benefit of acquiring personal financial management courses?

Personal financial management courses will not only improve your money-management abilities but also encourage you to think about your spending and saving habits and help you lay a solid basis for success.

What Is a Real-Life Example of Personal Finance?

It is the money we spend. Paying our mortgage, rent, and bills are examples, as are buying gifts for our loved ones, shopping, filling up our cars, and making charitable contributions.

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  2. Personal Finance: Basics, Importance, Types, Management ( + Free Softwares)
  3. PERSONAL DEVELOPMENT GOALS: Definition, Examples and How to Set it Up
  4. HOW TO MAKE MONEY WORK FOR YOU: Easy Ways to Make Your Money Work for You
  5. BUDGET MANAGEMENT TOOLS: Definition, and Best Budget Management Tools
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