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Tips for Selecting a Budgeting Tool

Lisett Comai-Legrand

Lisett Comai-Legrand About The Author

May 17, 2018 7:36:00 AM

The primary goal of any budgeting tool is to track and control the flow of your money coming in and going out. However, all tools are different from one another in the way they function. The purpose of this article is to give you tips for selecting a budgeting tool.

What is a Budgeting Tool?

Some budgeting tools will allow you to directly import information from financial institution while others are a more manual process. Some of them may utilize your computer; others might not. There are budgeting tools that work on a desktop computer or a mobile device. Some cost money, while others may be free. You might wonder which of the tools offers the best budgeting solution, and the truth is that there is no single budgeting tool that is well suited for everyone, it comes down to your preferences.

Tips for selecting a budgeting tool

Do You Trust Online Services with your Login Information? 

There are several companies that provide a budgeting tool that syncs your financial accounts. These kinds of software pull your transactional information so you can see it in one place. This method is very functional, but it does have a disadvantage: you have to share your account information. Although these companies utilize secure encryption to protect your data, it is up to you whether you think it’s worth the risk of using it or not.

Budgeting and Saving Apps

These tools are best for those who plan on saving more and spending less. If you are someone who doesn’t mind sharing bank information online, you should give these types of tools a try. You can quickly find free or paid programs that can help you keep your budget organized. However, be careful that you install real programs instead of malware disguised as helpful software.

Evaluating Investment Accounts

If you are investing in something and you want to keep track of these investments, then investment management services are the best. These tools will look at your investment accounts and give you suggestions of how to manage them most efficiently.

Envelope System

Those who prefer not to use computers for budgeting or need a physical representation of the budget can utilize the envelope method. This system best works for people who like to deal in cash or checks for their expenses. You use a series of envelopes on which the particular expense is written and the approximate amount is kept. For example, one envelope would be labled groceries, one for utilities, one for rent, etc. 

Spreadsheets

Spreadsheets are a great way to look into your flow of cash on both a monthly and annual basis. Spreadsheets are based on the same principles as the other budgeting methods discussed so far but are more flexible than a prpgram. Spreadsheet budgets help you know exactly what came in and what went out. They are easily customizable to your spending habits as well. 


budgeting calculator


Summary

A good budgeting system may change your financial life, but it depends on how you use it and for what purpose. This article provides a few tips for what kinds of tools may help you. It's okay to try out a few to find the method that works best for you.

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