THE GOOD LIFE

In previous posts I have discussed the importance of budgeting and creating a spending plan (less threatening way of saying budget)! Hopefully everyone has taken those posts to heart and began working on a paper budget because it is the key to eliminating debt and creating financial success!

Today though, I want to give you some tools and resources to help in your budgeting efforts, and also provide tools to help you manage your money better. Are you excited! OK, well let’s go!

MONEYDANCE PERSONAL FINANCE MANAGER

I have listed this application in previous posts, but want to mention it again. This is the program that I actually use to help organize and manage my finances. It is essentially a program comparable to Microsoft Money or Quicken, but works on all platforms (MAC, PC and Linux). It is a software download with a one time fee (I think I paid $30) and updates the product with any new releases for free.

Moneydance is basically a fancy, easy to use check register. You can manage all of your accounts, including investments, assets and liabilities, credit cards and checking/savings accounts. By categorizing your spending with each transaction entry, Moneydance will generate a multitude of graphs, charts and reports including the all important Net Worth and Cash Flow reports. As you can see the the above screenshot, you can schedule events in the calendar, it automatically tracks your spending to give you a snapshot of spending and more, right from the homepage! To see more and download, you can go to www.moneydance.com and there is a link in my Blogrol to the right of this post!

MINT MONEY MANAGEMENT

What if you don’t want to spend money on a software package or tool, but still want to organize your money and even find ways to save…without saving! Mint is the product you are looking for then! This is a free web based product which allows you to create a free, anonymous profile and, within just a few minutes, see where you could be saving money, and how much you are spending.

When you set up your account, Mint will have you select your financial institutions and ask that you enter your username and password to your online banking. Mint will then access your account, import all of your transactions, classify your transactions, and provide you with graphs, charts and more. Once your account has been established and all of your financial institutions have been set up, Mint will provide you ways in which you can save money without setting aside money from your paycheck! For example, you may have a credit card account that you established on Mint will recommend a card for you which has a lower interest rate, or no annual fee, and provide you with the annual amount you would save with that card. Mint does this for a number of products and is based off of your current accounts.

Once your Mint account has been established, and all of your financial institutions entered, Mint will automatically update your accounts and categorize your spending daily without you requesting an update. This provides a hassle free budgeting and tracking system that other programs do not provide. The interface is easy on the eyes and fun to look at. The graphs and charts use colorful and easy to read formats, and provide useful information. One of the great features is a comparison of your spending to what other individuals on average are spending in that category. The system also allows you to set up account alerts which can be emailed or sent as a text message to your phone and can notify of you of upcoming bills and their due dates, when you are getting low on your account balance, and if there is any unusual spending on your accounts. This is a great tool for the person who wants an easy spending tracking system. You can access this website at www.mint.com or click on the link in my Blogrol at the top of the blog! NOTE: NOT ALL FINANCIAL INSTITUTIONS ARE SUPPORTED AT THIS TIME. CHECK WITH MINT TO SEE WHAT INSTITUTIONS ARE SUPPORTED.

ENVELOPE BUDGETING SYSTEM

The envelope budgeting system is an old, tried and true way of budgeting which our grandparents or great grandparents may have used. Essentially, you get paper envelopes, and use each envelope for a particular category (food, gas, housing, utilities etc.) and mark that category on the envelope. You then divide your cash out into the envelopes for each category, creating your budget. The amount you place into each envelope is the amount you can spend on that category. If you need more money for a particular category (food for example) you can pull money from another envelope (entertainment for example) for use, but whatever is left in your entertainment envelope has to now last until your next payday. When your envelope is empty, it is now empty until your next fill up! When it is gone, it is gone!

Obviously, this method sounds good, but we not long live in a paper age. Many of us don’t ever carry cash in our wallets or purses. To fix that, companies have come out with software and systems to help re-introduce envelope budgeting into our lives in an electronic form so that you don’t have to withdraw your cash; you can keep it safely in the bank or Credit Union. Here are some options for electronic envelope budgeting systems:

• Crown Mvelopes: Crown Financial Ministries offers an online, web based product called Mvelopes Personal. This is a subscription service which provides you anytime access to your accounts via internet and mobile devices. The concept is the same as the traditional envelope budgeting system, but provides automatic retrieval of transactions, automatic categorization, spending plan creation and charts, graphs and statements which can be printed. I have used this product, and really enjoyed it. Because it is a different type of budgeting, it does take some getting used to, but can ultimately save you money (the product’s website claims you can recover 10% of your income) and helps you to spend better. Your first 30 days are free, and if you wish to continue, for as little as $7.08 per month with a 2 year subscription (the subscriptions are paid up front). You can access the website and begin your free trial at www.mvelopes.com or click on the link in the Blogrol.
• Snowmint Envelope Software: Snowmint Creative Solutions (http://www.snowmintcs.com/index.php) offers several personal finance products for download including an envelope budgeting system. The system has a simple user interface with large icons and simple functionality. About.com conducted a review of this software product, and rated it a 4.5 of 5 stars. See below for a screenshot of the Windows version. There is a free trial with this program as well and then a one time fee of $29.95 for the download; more if you order a CD copy. You can check out the article online at http://financialsoft.about.com/od/reviewsfinancesoftware/fr/BudgetSnowmt.htm

• Paper Method: Of course, there is always the fancy paper method of envelope budgeting whereby you print out a tracking sheet, which you can find at Crown Financial Ministries (see Blogrol for link) and use each tracking sheet as an envelope. It acts like more of a check register, but each “register” will be dedicated to an envelope category. This way, you can spend with your debit card and still track your envelope spending on paper. The downside to this method is that it does not provide a good visual which tends to be a motivator and it can be harder to track the spending since you have multiple sheets of paper floating around. I prefer software or web based products which prevent this problem and provides the visual motivation necessary for success.