Personal budgeting software provides key features for budgeting your income with software that is dedicated to setting up, managing and tracking a household or personal budget. If you want to really focus on your budget and you do not need the additional features of traditional personal finance software, here are some tips for choosing budgeting software.
1. Flexible Budget Categories
Categories are used to define income and expenses in budget software and are the foundation on which you will build your budget. Be sure the budgeting software you are considering has flexible categories that you can edit, delete or add to. Avoid budget software that locks you into a default set of income and expense categories.2. Income and Expense Fluctuations
Everyone has some fluctuating expenses, like heating bills that are higher in the winter, and many people do not work on salary so income changes from month to month. If you need to work with fluctuating income, it is very important that the budgeting software does not require you to enter the same monthly amount for income. While budgeting software that allows for monthly fluctuations in expenses is easier to use, you can allocate a monthly average expense amount over a year if you like budget software that requires you enter a set amount for expenses. Just be sure to sock away unspent funds in the months where spending is lighter to cover months when bills are higher.3. Need an Envelope Budget?
Envelope budgeting is a great way to work with fluctuating expenses. Software with an envelope budgeting feature rolls unused funds in spending categories forward to the next month. Envelope budgeting software should also automatically distribute paychecks among the budget envelope categories.4. Budget Reports
The budgeting software you choose should have at least some fundamental budget reporting. You should be able to see how well you are following your budget on a monthly, quarterly and annual basis. If you plan to monitor your spending very closely, be sure the budgeting software offers weekly reports as well. Basic budget reports should show the budgeted amount, actual spending and the difference between the two. Some budget software provides graphs to show you how you are spending your money, but this type of reporting is not as important as actually being able to review the numbers. Whether you choose desktop budget software or you go online to use web-based budget software, you should be able to easily print reports if you want to.5. Budget Security
Data encryption is a must if you enter account numbers or other identifying information into the budget software or if you download transactions. Read the privacy or security statement, which should be published online. Do not use software with no privacy or security statement.- Security is not an issue when you set up accounts with generic names like Checking or Master Card and without account numbers or personal information. Even if your data were hacked, there would be no way to steal your identity or your accounts.
- Passwords: Set up your computer to require a password at start up (see the links lower on the page to set up a password for Windows XP, Vista or a Mac), or use online budget software which always requires a password.
6. Keep Your Budget Data
Most budgeting software will let you export your data to a CSV file or another file format that can easily be read by spreadsheet software. This feature is particularly important if you use budgeting software that also allows you to track transactions in various financial accounts. You may eventually decide to use other budget software, personal finance software with more features or you might want to analyze your spending in a spreadsheet. Not having to re-enter your data will save hours.7. Easy Budget Set Up
Because you will not set up new budgets frequently, ease of set up in budgeting software is not as important as other aspects are. You do not want budgeting software that is difficult to set up, either. The best way to determine how easy budget software is to use is to download a free trial of the software, and most budgeting software offers a free trial.If you want to experiment with budgeting scenarios, be sure that what-if scenarios or saving an existing budget while editing a copy is supported. If you will design a personal budget and a budget for a small business, the software must support multiple budgets.
