Personal finance software takes ideas from big business to help you save time and money. Chart s of accounts, tables, and graphs can help households better understand their cash’s inflows and outflows, but does that understanding lead to better decisions and ultimately savings? Often, knowing where your money goes can help you curb extra spending and save on expenses. If you’re not dealing with business-scale revenue and expenses though, how necessary are all of these software packages’ extra features? Do you really need three charts and a graph to tell you that you shouldn’t have spent $300 on ice cream last month? In the worst case scenario, you may find yourself spending more time and money than you save.
So, how can you guarantee that your personal finance software is paying dividends for you? Ultimately, you need to judge any software package by two criteria: price, and ease of use. Any software that comes recommended by anybody and that you are likely to come across is going to have the features you need, which are essentially expense tracking and categorizing, so what you need is to guarantee that you won’t lose more than you save in the process of using it.
With regards to price, there is one way to guarantee you won’t net a loss, and that is to find something free. Going with a free option may seem like a risky move, as free products or services usually come with either a catch or a sacrifice of quality. Some of the free software out there may lack slick graphics and marketing campaigns, but that doesn’t necessarily mean it was cooked up by some sixteen-year-old in his basement. For those willing to spend some time moving up the learning curve, there are several open-source personal finance software packages that offer all of the features you could ever need. The GnuCash project is probably the best example. The interface has none of the slickness of the Quickens of the world, but there is a huge community working on updating and maintaining it and for somebody looking for pure functionality, you can’t beat the price.
The second factor you need to consider is your time. An open-source project isn’t going to be worth the savings if it takes days to get running and figure out, and has you banging your head against your keyboard whenever a bug crops up. A simple solution with a user-friendly interface and good customer service doesn’t have to be expensive though. Mint.com, for example, monetizes itself through payments from banks and loan services, meaning that you as a consumer get access to a top notch professional program without paying a dime. Compare GnuCash and Mint.com side by side here: GnuCash vs. Mint. GnuCash obviously brings more features to the table, while Mint offers much more proactive support.
You can easily spend a lot to get the highest-end personal finance software, but why do so when the most significant thing you’ll learn from its analytics will probably be that you spend too much on finance software? You don’t need to spend money to get the tools you need to make good financial decisions. In fact, not doing so may be your first step in the right direction.
This guest post was written by Grace Nasri. Grace received her BA in Political Science and Global Studies at UC Santa Barbara and her MA in International Relations from New York University. She currently lives in southern California, where she blogs for the Huffington Post and works as the Managing Editor at FindTheBest.com, a comparison search engine.