Learning personal financial management in a world where nearly everyone is trying to get out of debt is crucial.
The good news is that no matter how complex your financial situation is, you can always turn it around with effective money management.
Interestingly, Nick Wilson, CEO of AdvanceSOS.com has broken down personal financial management into related points that you can adopt for personal use.
Drawing on his in-depth understanding of general finance, in particular the strategic management of income, loans and debt, Nick has also identified some personal financial management applications.
He oversaw the affairs of AdvanceSOS, a payday and installment loan company that connects borrowers with direct lenders offering the best loan terms and loan rates you can find.
Defining personal financial management
Essentially, personal financial management uses creative tools to create financial models and strategies to manage how your money is spent effectively. It is a process that involves setting financial goals, budgeting, and planning how to allocate your income to meet strategic financial needs.
One of the most crucial pillars of personal financial management is budgeting. Having a budget gives you an idea of ââyour actual disposable income and can be used to manage outstanding debts if you have any effect. Essentially, you can plan for the future and respond to the present using the most available assets through budgeting.
Traditional personal financial management relies heavily on written calculations and paper spreadsheets. However, this old method has long given way to simpler software applications accessible on your computers and phones.
Understand the personal finance planning process
Every efficient staff financial plan has adopted a process structure to help you achieve your financial goals, long or short. Below, we’ll look at five crucial planning processes you can explore to improve your financial situation.
Create your goals
You are one step away from where you want to be financially if your financial goals are specifically written down. Make a list of the goals you want to achieve in the present, which serves as an immediate short-term plan, and the long-term goals you want to accomplish. These goals don’t have to be rigid; you can always revisit them periodically as your income level improves.
Evaluate your personal life
You can only achieve the goals you have set for yourself if all the financial factors in your life allow it. Therefore, it is important to collect relevant data such as income and expense patterns in your life. Analyzing this data helps you set your financial priorities and reveals your financial obstacles like debt and tax burden and how long it will take for your goals to materialize.
Design your financial plan
While others prefer to have professional help with this, even trained professionals will rely heavily on the first two processes to design your financial plan. First, consider all of your recurring expenses, investments, and savings when creating a financial plan. This way, you can manage your income more effectively by sticking to the percentage of allocating your income to items in your financial plans.
Implementation and periodic review
No matter how tight your financial plan is, it will remain on paper or as text in your software application if you don’t implement it. Therefore, take very deliberate and consistent steps to strictly implement and adhere to your financial plan, and always leave room for periodic review of your plan. As your income or expenses increase, this should be reflected in your plan, as you should adjust it accordingly.
Personal Financial Management Apps
As mentioned earlier, organizing your financial plans no longer requires tedious paperwork. Since the advent of Intuit in 1983 by Scott Cook and Tom Proulx, personal finance software has constantly evolved to allow you to apply a seamless financial plan with little or no professional help. Although you can find some of these apps for free, others offer paid premium services as better alternatives. Either way, below are our top three personal money management apps.
For several reasons, Quicken has remained the most talked about app for managing personal finances. First, although not free, they offer flexible payment plan packages that more than meet basic personal finance, investing, and business planning needs.
Additionally, Quicken provides flexible traction for your income, taxes, and investments and enables periodic reports on your finances and bill management. They have also incorporated some elements of mobile banking as they offer bill payment services.
From the makers of personal finance apps, Intuit, Mint helps you track your spending in one place. You can use this app on multiple devices and have your planner wherever you go.
Additionally, Mint has structured a system that helps you monitor your credit and design a repayment plan to ensure you get out of debt quickly. It also has a budget planner and an expense tracker that helps you track your expenses. Plus, you can sign up for free and take advantage of credit score improvement programs.
Tiller gives you a simple approach to creating a meaningful spreadsheet. You get to see all your expenses at a glance at a glance. You get instant expense categorization and you can easily create a budget plan from the well-structured data that this app will calculate from your personal finances.
The app also offers free templates for creating debt repayment plans, net worth estimates, and trend analyzes of all your recurring payments. Interestingly, they offer a thirty-day trial period with a subsequent rate of $79 for an entire year.