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How to manage your personal finances with these helpful apps and websites

This article was co-authored by Trent Larsen, CFP®. Trent Larsen is a Certified Financial Planner™ (CFP®) for Insight Wealth Strategies in the Bay Area, California. With over five years of experience, Trent specializes in financial planning and wealth management as well as personalized retirement, tax, and investment planning. Trent holds a BS in Economics from California State University, Chico. He has successfully passed his Series 7 and 66 registrations and holds his CA Life and Health Insurance license and CFP® certification.

There are 9 references cited in this article, which can be found at the bottom of the page.

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Personal financial management is a subject that is not taught in many schools, but is something that nearly everyone has to deal with in their lives later on. Here are some statistics: Some 58% of Americans do not have a retirement plan in place for how they’ll manage their finances when they get old. [1] X Research source While people generally believe they’ll need about $300,000 to support themselves in retirement, the average American has only about $25,000 saved at the time of retirement. [2] X Research source Average household credit card debt among Americans now stands at a distressing $15,204. If these facts are alarming to you, and you want to reverse the trend, read on for specific, targeted advice geared towards giving you a better future.

Chris Stobing is a writer and blogger from the heart of Silicon Valley. His work has appeared in PCMag and Digital Trends, and he’s served as Managing Editor of Gadget Review. Read more.

Keeping your monthly finances in check (no pun intended) isn’t always as easy as it sounds. With bills that vary every month, surprise expenses that pop up at the worst possible moment, and grocery tabs that seem to be growing larger with every season that passes, asking for a little help from your phone or desktop isn’t so absurd.

These are some of our favorite mobile apps and software that you can use to make managing your monthly finances a breeze.

Mint

Of course, by now everyone has heard of Mint. It’s quick, easy to learn, user friendly, and all-around the best choice for beginner budgeteers who want to utilize a set of tools that will help them to more effectively manage their monthly finances.

You can set budgets for everything from entertainment purchases like movies, music, and theater performances to the everyday stuff like medical premiums, prescriptions, and grocery bills. All of this is factored into a monthly report which visualizes how much you’re spending on what, and giving you helpful hints along the way that create a broad picture of your purchasing habits each month.

All that said, the settings you get with Mint are still relatively limited. That’s why, although Mint is essentially the gold standard when it comes to mobile financial management, there are still a number of other apps that can help round out your toolbelt.

Banking Apps

If you’re a member of one of the major banks (of some of the larger credit unions), the app that corresponds to your personal financial institution can be a perfect financial assistant that can do everything from helping you to figure out how much you spent on groceries in a week, to getting your taxes organized and prepared for the yearly pocket drain.

Bank of America, Chase, Citibank, Wells Fargo, and Ally all have apps that will allow you to keep careful track of your expenses, from transactions that happened that day, to general overviews of how your spending has changed from month to month

Other features like texting when your balance reaches a certain limit and identity theft protection come standard, though if you really want to get your finances under control, there are apps that can predict what you’re going to buy before you even get to the store.

Digit

Digit is amazing for people like me who, despite their best intentions, can never seem to get enough put away in their savings account that doesn’t inevitably fall back into checking before their next paycheck rolls in.

Digit works by automatically scanning your spending habits week to week, month to month, and sending cash over to your savings that reflects those patterns accordingly. This way you’ll never try to save outside of your budget, and the app can help you establish a better understanding of how much you actually use, and how much you might have left over that would be better spent accruing interest in an account on the side.

Digit does cost money, but somewhat uniquely, it will only take its fees from your savings account after it’s saved you a certain amount. Otherwise, you can enjoy the rest of the software 100 percent free of charge.

Credit Karma

But what good is saving money if you don’t have a down payment to look forward to?

Although there are dozens of different ways you can check your credit these days, few offer the level of customization and simplicity that you’ll find with Credit Karma. Outside of the standard credit reporting features, Credit Karma will also analyze how much money you spend every 30 days, how much you save, and cultivate a collection of credit offers that best fits your budget.

This kind of personalized loan analysis is something that people used to spend hours working out at their local banks, but now the whole process has been streamlined to fit squarely in your pocket.

BillGuard

BillGuard is great not only for the fact that it helps to keep your bills in check, but by analyzing your monthly expense reports over time, it can react quickly and effectively if your identity is stolen and a criminal starts going on a spending spree with your pilfered details.

Using predictive algorithms and crowdsourced data, BillGuard is one of the best tools out there for catching an identity theft attempt early, and easily shutting it down in its tracks. If it detects anything out of the ordinary, you’ll receive either a text, email, or phone call alert that tells you that someone you don’t know or recognize is digging through your accounts.

You Need a Budget

Quick, curt, and to the point, You Need a Budget is a great app that mimics many of the same features you might find in Mint, but extends them out to your deskop for simple mouse-to-interface interactions.

This is a job that used to be handled by programs like Quicken, but as a slew of free options started to crop up, Intuit realized that mobile solutions were where the real money could be made for itself, and its many customers.

You Need a Budget also has a mobile app, though the features on that side of things are a bit more limited than what you might find in something like Mint. It should also be noted that the mobile version is just a companion app, so you’ll need to have the main client installed on a desktop before activating your account on a phone or tablet.

Managing your money is hard and thinking about how much you have to spare at the end of each paycheck is added stressor that none of us need to worry about any longer thanks to these apps, desktop programs, and digital financial assistants.

Managing your money doesn’t have to be overwhelming.

Don’t let your finances stress you out to the point of inaction. Instead, take back control by following the steps below:

  • Start budgeting. But here’s the key: Don’t use your budget to set unrealistic goals about how much you are going to save and how much extra money you will earn. Instead, aim to make it an accurate description of how your finances work. See where you could be spending more or spending less.
  • Create an emergency fund. Putting aside $50 a month can really add up. You should aim to have at least $1,000 in your fund until you are out of debt.
  • Be honest with yourself. The financial gap resulting in your debt might be caused by a number of factors – you may not be earning enough, or you may be spending too much. You need to name the problem to figure out the right long term solution.
  • Ask for help. There are plenty of services out there that can help you take back control — from financial planning services to debt management advisors to credit counseling services.

Managing your money doesn’t have to be overwhelming.

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The last year has been a very difficult one. Not only have we had to deal with travel restrictions, lockdown orders, and fears of getting sick — many of us have also been struggling financially. In fact, research suggests that financial stress is at an all-time high in America, a phenomenon explained by the numerous hiring freezes and layoffs brought on by the pandemic.

Financial stress can be caused by a number of things: debt, unexpected expenses, or a compulsion to make purchases that we can’t afford. Without the right coping strategies or support, it can feel impossible to get through. But it is possible.

If you are suffering from financial stress, keep two things in mind:

1) You are not alone, and there are plenty of services and people out there who can help you.

2) There are some tried-and-tested ways to begin to feel in control of your money again.

1) Budget, budget, budget.

The easiest way to get your finances on track is to make a detailed, realistic budget that you can stick to. This may sound obvious, but for many people, the experience of financial stress creates a vicious cycle — you avoid thinking about money because it’s a stressful subject, which then gets you further into debt, which then causes more stress, and so on ad infinitum.

The key to creating a successful budget is not setting unrealistic goals about how much you are going to save and how much extra money you will earn. Instead, use your budget to accurately track and describe how your finances work. Having a good idea of how much money you actually have, spend, and can save is the first step toward true financial freedom.

To start, put together a spreadsheet document (you can use Google Sheets or Microsoft Excel). Under the far left row write out your monthly expenses. These could include things like:

  • Savings (Don’t forget to always pay yourself first!)
  • Mortgage/rent
  • Car payment
  • Car insurance
  • Health insurance
  • Taxes
  • Student loans
  • Groceries/Food/Other necessities
  • Gasoline
  • Internet
  • Phone
  • Fun

Then to the right, type in the amount that you spend on each one, and the date the payments are due as a reminder. Add up the total at the bottom to ensure you’re not spending more than you’re bringing in. S ee if you notice areas where you could be spending more or spending less.

2) Create an emergency fund.

Another effective way to reduce financial stress is to start building an emergency fund to cover unexpected expenses. If you are struggling with debt, and not earning enough to put money aside, building up a huge fund might seem unrealistic. But putting aside $50 a month will quickly add up to a useful nest egg. You should also consider selling some clothes, books, or other items you own, but haven’t used in years, to kick things off.

You should aim to have at least $1,000 in your emergency fund , at least until you’re out of debt. Once you have enough money to save a little more, aim to have three to six months’ of living expenses in your fund (use the budget you made above to calculate this).

An emergency fund can, and likely will, alleviate your stress in a number of ways. Most importantly, it will provide you with the psychological security you need to keep your cool in the most stressful situations. Should any unexpected costs come up — such as a vehicle repair or a last minute trip to visit family — you will have the money to meet them. As a result, you will avoid getting further into debt, and be able to sidestep solutions like borrowing money or racking up credit card charges that you can’t afford to payoff.

3) Be honest with yourself.

After making a budget and starting an emergency fund, it’s time to face up to some hard truths. If you’re affected by financial stress, you’re probably in debt, which means (a) you’re spending more than you’re earning or (b) you’re facing additional stresses, like supporting family members or other people in your life.

The good news is that it’s much easier to earn extra income today than it was in the past, largely due to the increase of online freelancing opportunities. Freelancers in the United States earn around $50 an hour on average, meaning taking on just a few extra work hours each week is an effective way for many people to bring in more money and make a dent in their debt. (Websites like Upwork or Guru offer opportunities for people in various fields.)

That said, in the short to medium term, your spending is going to be easier to change than your income. Reducing costs means doing some obvious things — not making compulsive purchases, and skipping those expensive nights out with friends. But it also includes making some less obvious choices.

One of these includes moving to a cheaper apartment. This may sound like a drastic change, but for most people, rent is by far their biggest monthly expense — making up almost 30% of monthly outgoings . If you can afford the large, one-time cost of a move, rest assured that over the course of six months living in a cheaper space saves you thousands of dollars — not just in rent, but in reducing interest payments on your debt.

Try this same strategy for other major monthly expenses, such as looking into more affordable options for health insurance or vehicles that require lower car payments.

Being good with money is about more than just making ends meet. Don’t worry that you’re not a math whiz; great math skills aren’t really necessary – you just need to know basic addition and subtraction.

Life is much easier when you have good financial skills. How you spend your money impacts your credit score and the amount of debt you end up carrying. If you’re struggling with money management issues such a living paycheck to paycheck despite making more than enough money, then here are some tips to improve your financial habits.

When you’re faced with a spending decision, especially a large purchase decision, don’t just assume you can afford something. Confirm that you can actually afford it and that you haven’t already committed those funds to another expense.

That means using your budget and the balance in your checking and savings accounts to decide whether you can afford a purchase. Remember that just because the money is there doesn’t mean you can make the purchase. You have also to consider the bills and expenses you’ll have to pay before your next payday.

How To Manage Your Money Better

  1. Have a budget: Many people don’t budget because they don’t want to go through what they think will be a boring process of listing out expenses, adding up numbers, and making sure everything lines up. If you’re bad with money, you don’t have room for excuses with budgeting. If all it takes to get your spending on track is a few hours working a budget each month, why wouldn’t you do it? Instead of focusing on the process of creating a budget, focus on the value that budgeting will bring to your life.
  2. Use the budget: Your budget is useless if you make it then let it collect dust in a folder tucked away in your bookshelf or file cabinet. Refer to it often throughout the month to help guide your spending decisions. Update it as you pay bills and spend on other monthly expenses. At any given time during the month, you should have an idea of how much money you’re able to spend, considering any expenses you have left to pay.
  3. Give yourself a limit for unbudgeted spending: A critical part of your budget is the net income or the amount of money left after you subtract your expenses from your income. If you have any money left over, you can use it for fun and entertainment, but only up to a certain amount. You can’t go crazy with this money, especially if it’s not a lot and it has to last the entire month. Before you make any big purchases, make sure it won’t interfere with anything else you have planned.
  4. Track your spending: Small purchases here and there add up quickly, and before you know it, you’ve overspent your budget. Start tracking your spending to discover places where you may be unknowingly overspending. Save your receipts and write your purchases in a spending journal, categorizing them so you can identify areas where you have a hard time keeping your spending in check.
  5. Don’t commit to any new recurring monthly bills: Just because your income and credit qualify you for a certain loan, doesn’t mean you should take it. Many people naively think the bank wouldn’t approve them for a credit card or loan they can’t afford. The bank only knows your income, as you’ve reported, and the debt obligations included on your credit report, not any other obligations that could prevent you from making your payments on time. It’s up to you to decide whether a monthly payment is affordable based on your income and other monthly obligations.
  6. Make sure you’re paying the best prices: You can make the most of your money comparison shopping, ensuring that you’re paying the lowest prices for products and services. Look for discounts, coupons, and cheaper alternatives whenever you can.
  7. Save up for big purchases: The ability to delay gratification will go a long way in helping you be better with money. When you put off large purchases, rather than sacrificing more important essentials or putting the purchase on a credit card, you give yourself time to evaluate whether the purchase is necessary and even more time to compare prices. By saving up rather than using credit, you avoid paying interest on the purchase. And if you save rather than skipping bills or obligations, well, you don’t have to deal with the many consequences of missing those bills.
  8. Limit your credit card purchases: Credit cards are a bad spender’s worst enemy. When you run out of cash, you simply turn to your credit cards without considering whether you can afford to pay the balance. Resist the urge to use your credit cards for purchases you can’t afford, especially on items you don’t really need.
  9. Contribute to savings regularly: Depositing money into a savings account each month can help you build healthy financial habits. You can even set it up so the money is automatically transferred from your checking account to your savings account. That way, you don’t have to remember to make the transfer.
  10. Being good with money takes practice:​ In the beginning, you may not be used to planning ahead and putting off purchases until you can afford them. The more you make these habits part of your daily life, the easier it is to manage your money, and the better off your finances will be.

Frequently Asked Questions (FAQs)

Why is money management important?

Without money management, personal finances are a bit of a mystery. This can lead to overspending and living paycheck-to-paycheck. Money management can help you have a better handle on your income and spending so you can make decisions that improve your financial status.

How do you improve money management?

You can improve your money management by regularly evaluating what you’re doing with money and making changes that make sense for you. For example, if you don’t have a budget, you could start by developing one. If you have a budget, you could track your spending and see how it lines up with your budget. Once you have an idea of your income and spending, you could choose to increase your savings, pay off debt, or start investing based on your financial goals.

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Additional Resources

Acquiring an economic and financial education is important, but traditional methods – like books and college courses – cost time and money. And if you’re like me, you prefer to not pay for things.

However, there are many great resources (in addition to Money Crashers, of course) to help you take control of your personal financial education – all without cost. You simply need to get online, and know where to look. While the Internet is loaded with bad – even dangerous – misinformation, you can take advantage of the following five sites.

Best Financial Information Websites

1. Investopedia

Investopedia is a good starting place for those who find themselves dumbfounded by the terms used in the financial world. When I wrote my first article related to finance, I quickly found myself confused by all the jargon that is casually tossed around. I needed help clearing up the confusion, and I didn’t have time to fire up an academic database, nor the cash to thumb through a personal finance tome. Luckily, I found Investopedia.

Definitions and Exam Prep
Its definitions are accurate, and its simple search function helped me save time. It kept me from having to read much longer material while still providing me with the same basic knowledge.

Investopedia also has many financial investing tutorials and exam preparation materials that help users understand key terms and concepts. The site also features the nifty Investopedia Stock Simulator that lets you learn what it’s like to trade stocks and get a feel for risking your own capital out on the open market. All in all, it’s a great resource for people who are new to finance, and it offers far more than just a financial dictionary.

2. About.com

Some people have mixed feelings about the jack-of-all trades information site About.com, but I can assure you this site deals in quality financial and economic knowledge. This site has two pages among the many offered that are dedicated to the studies of economics and finance, and I know a few college students who have learned economic formulas on About.com because their textbook was too dry.

Small Business
One thing that really stands out on About.com’s business and finance page is the section they have for small businesses. Obviously, small businesses are different from large ones, and most people who go into business for themselves start out small. About.com features many subsections arranged beneath the main “Small Business” page that are updated frequently, and this makes it one of the best free Internet resources for entrepreneurs. The topics go into so much detail about small business that there is even a guide that gives information about how to open a business in Canada.

3. Biz/ed Learning Zone

If you haven’t heard of the Biz/ed Learning Zone, you’re missing out. Biz/ed is a free online portal for students and teachers in business, economics, and accounting. The site is based in the United Kingdom, but that does not negatively impact the relevancy of the accounting and business materials you can download. That’s because it is affiliated with Cengage Learning, a major provider of learning solutions to academia worldwide.

Accounting
What stands out at the Biz/ed Learning Zone is the section on accounting, which provides easy-to-understand accounting lessons. Spreadsheets are the lifeblood of accounting, and Biz/ed’s accounting lessons come in spreadsheet format with multiple pages. Plus, they’re color-coded to make the lessons easier on the eyes. Perhaps surprisingly, colorful accounting spreadsheets are much easier to process than trying to read the same information from a black and white textbook.

4. MyMoney.Gov

Budgeting and financial literacy is a big problem in America, and this became particularly apparent after the 2008 economic collapse. Many people were living beyond their means, and the United States government deemed it necessary to provide budgeting and financial literacy information to the public. MyMoney.gov represents the efforts of 22 federal entities, and offers a wealth of free and expert information.

Financial Data and Life Planning
The thing I like the most about MyMoney.gov is how nicely the website’s main page is designed. As a writer, I’ve had many experiences searching government websites for specific information, which can be frustrating because information is often either hidden or organized in a way that doesn’t make sense. However, MyMoney.gov organizes a broad range of topics well and is easy to navigate. Plus, it offers multiple tools and guides, including a host of current economic and financial statistics and data.

The “Life Events” section is perhaps the most useful area. Within it are financial guides for planning for your first child, paying for college, buying your first home, and preparing for retirement. There are also several calculators that help you plan and budget. This site is a great example of your tax dollars at work.

5. Khan Academy

To put it simply, Khan Academy is a revolution in education. The site’s stated goal is to provide a world-class education for free. The founder of the website, Salman Khan, is a former hedge fund manager who decided he’d rather spend his time providing free financial education, rather than navigating the market. He has three degrees from MIT, as well as one from Harvard Business School, and he’s using his smarts to help regular people make sense of complex concepts.

Finance and Economics
Khan Academy covers a variety of disciplines, and the site is always adding new lessons to its database. I’m most impressed with its financial and economics lessons. Khan Academy excels at presenting dry material in an engaging way that is brief and to the point – there is no chance of falling asleep during a lecture here. I have actually used Khan Academy to help pass college classes, and I can tell you I have never been so excited about furthering my own personal education.

Mr. Khan uses a digital white board in lessons with many different colored markers to differentiate between concepts. And though the site uses simple technology, it utilizes it so well that many schools and home-schooled students are using the site’s lessons to supplement their curriculum. If you need financial knowledge or just want to understand how markets work, I encourage you to check out Khan Academy.

Final Word

If you have the time, you can learn almost everything that students of finance, business, and economics are taught in college, and you can learn it for free. Just make sure to properly vet each site you’re interested in, and don’t fall prey to the glut of misinformation that can be found online.

These are not the only good financial and business education sites out there. Which do you recommend? Are there any sites that you think should be avoided?

In these modern times — when there literally is an app for everything — it has never been easier to track your money and stay on budget. It’s a snap to automate payments. It’s easy to set and track financial goals. You should never miss a bill payment.

Here are our choices for the best personal finance apps.

Acorns App

Cost: $1-$5/month

Where It’s Available: IOS, Android, Web

At A Glance

Acorns is an automated savings tool that rounds up your purchases on linked credit or debit cards, then sweeps the change into a computer-managed investment portfolio. Picture it as a virtual piggy bank.

The target audiences for Acorns include college students, non-involved investors and people who struggle to save money.

In seeking young, would-be investors, Acorns goes after college students, especially those who don’t have earned income and can’t yet contribute to tax-advantaged retirement accounts.

After four years of “rounding up,’’ there’s usually a nice sum of money looking for a new home. It could be the seed money for your first investment!

You are given the option of transferring your change into an investment portfolio, either automatically or manually (where you can review each purchase on the app, then select which ones to transfer).

Acorns also has several partners — such as Jet, Blue Apron, Airbnb, Boxed and Hulu — that offer 10% cash back when using a linked payment method with them.

Of course, unlike the IRA or 401(k) accounts, Acorns offers only individual taxable accounts. Found money is one thing. Free money — such as an employer match — is quite another. So don’t put all your acorns in one basket — or something like that.

Acorns speaks well to new investors through Grow Magazine, an online personal finance site that is geared toward millennials. It offers advice about side gigs, credit-card debt, student loans and other pertinent topics. Much of the Grow content is incorporated in the Acorns app.

Safety

The app and Web site are encrypted. Automatic logout, IDs and other security measures are employed.

Pocket Guard

Cost: Free, $4.99/month, $34.99/year

Where It’s Available: iOS, Android

At a Glance

This app budgets how much spendable money you have after accounting for the basics like bills, debt, and long-term financial goals.

PocketGuard offers tools that simplify your income and expenses, allowing you to take command of your budget and even grow your savings account. It lets you link all your accounts in one place for a comprehensive view of your balances and net worth. After creating a profile and filling out some personal information, PocketGuard can send you offers for lower rates on financial services. The products are tailored to your interest based on your past transactions.

These days, so much of our transactions are handled digitally, which means it can be hard to tell how much money you really have available to spend. This confusion can lead to overdraft or late fees and inhibits us from optimizing our finances to our advantage. PocketGuard helps you stay aware of your current and future financial outlook. It even displays attractive graphs that make it easy to isolate the categories where you overspend. You can also customize the categories or personalize them with hashtags. The free version should work for those looking for an easy way to keep track of their spending. The premium version offers more in-depth customization and detailed reports.

Safety

Your data is secured with 256-bit SSL encryption–the same level of security as major banks. The PocketGuard app uses PIN code and biometrics, as an additional security layer, in case your phone is ever lost or stolen.

Mint App

Cost: Free

Where It’s Available: iOS, Android, Web

At a Glance

Mint is speedy and reliable, offering detailed and in-depth views of U.S. and Canadian personal-finance situations. It has a useful, clean design. You can sign up through the mobile app or the website (mint.com).

Mint analyzes your spending habits, income, and other financial transactions through customizable alerts. If you tap on the plus sign and choose “Create Budget,’’ you are taken to a page with a list of spending categories (such as groceries or movies). It suggests a monthly spending limit based on your history, while also tracking your money through a few months of historical data. There’s a look at your monthly budget through a simple line graph, so there is a short-term and long-term perspective.

It isn’t an app for accounting software or reconciling transactions; it’s more about spending and big-picture financial status. Mint can calculate your net worth, but also offer detailed analysis of your spending habits. If you’re looking to set financial goals — such as escaping credit-card debt or purchasing a home — it’s good for that, too.

It will send push notifications for bills. If you’re close to the budget limit in your given categories – too many lattes this week? – you will get a warning.
Mint is supported by advertising, but the ads are more useful than annoying. Because of Mint’s all-knowing, all-seeing approach to your financial accounts, it knows precisely how much interest you’re earning and how much interest you’re paying on your mortgage, loans, credit cards and savings accounts, along with ATM fees and annual service charges.

Safety

When providing access to your online banking and credit card accounts, you are only giving Mint read access to that information. Mint doesn’t have the ability to move money, so if a hacker broke through, they wouldn’t have access to your cash. You can add a passcode to the app, a four-digit PIN, but it locks you out of Mint when navigating away from the app, so you won’t accidentally leave the app open for someone else to use. Combined with your iPhone passcode, that should be added security.

The process of planning and managing personal financial activities

What is Personal Finance?

Personal finance is the process of planning and managing personal financial activities such as income generation, spending, saving, investing, and protection. The process of managing one’s personal finances can be summarized in a budget or financial plan. This guide will analyze the most common and important aspects of individual financial management.

Areas of Personal Finance

In this guide, we are going to focus on breaking down the most important areas of personal finance and explore each of them in more detail so you have a comprehensive understanding of the topic.

As shown below, the main areas of personal finance are income, spending, saving, investing, and protection. Each of these areas will be examined in more detail below.

#1 Income

Income refers to a source of cash inflow that an individual receives and then uses to support themselves and their family. It is the starting point for our financial planning process.

Common sources of income are:

  • Salaries
  • Bonuses
  • Hourly wages
  • Pensions
  • Dividends

These sources of income all generate cash that an individual can use to either spend, save, or invest. In this sense, income can be thought of as the first step in our personal finance roadmap.

#2 Spending

Spending includes all types of expenses an individual incurs related to buying goods and services or anything that is consumable (i.e., not an investment). All spending falls into two categories: cash (paid for with cash on hand) and credit (paid for by borrowing money). The majority of most people’s income is allocated to spending.

Common sources of spending are:

  • Rent
  • Mortgage payments
  • Taxes
  • Food
  • Entertainment
  • Travel
  • Credit card payments

The expenses listed above all reduce the amount of cash an individual has available for saving and investing. If expenses are greater than income, the individual has a deficit. Managing expenses is just as important as generating income, and typically people have more control over their discretionary expenses than their income. Good spending habits are critical for good personal finance management.

#3 Saving

Saving refers to excess cash that is retained for future investing or spending. If there is a surplus between what a person earns as income and what they spend, the difference can be directed towards savings or investments. Managing savings is a critical area of personal finance.

Common forms of savings include:

  • Physical cash
  • Savings bank account
  • Checking bank account
  • Money market securities

Most people keep at least some savings to manage their cash flow and the short-term difference between their income and expenses. Having too much savings, however, can actually be viewed as a bad thing since it earns little to no return compared to investments.

#4 Investing

Investing relates to the purchase of assets that are expected to generate a rate of return, with the hope that over time the individual will receive back more money than they originally invested. Investing carries risk, and not all assets actually end up producing a positive rate of return. This is where we see the relationship between risk and return.

Common forms of investing include:

Investing is the most complicated area of personal finance and is one of the areas where people get the most professional advice. There are vast differences in risk and reward between different investments, and most people seek help with this area of their financial plan.

#5 Protection

Personal protection refers to a wide range of products that can be used to guard against an unforeseen and adverse event.

Common protection products include:

  • Life insurance
  • Health insurance
  • Estate planning

This is another area of personal finance where people typically seek professional advice and which can become quite complicated. There is a whole series of analysis that needs to be done to properly assess an individual’s insurance and estate planning needs.

The Personal Finance Planning Process

Good financial management comes down to having a solid plan and sticking to it. All of the above areas of personal finance can be wrapped into a budget or a formal financial plan.

These plans are commonly prepared by personal bankers and investment advisors who work with their clients to understand their needs and goals and develop an appropriate course of action.

Generally speaking, the main components of the financial planning process are:

  • Assessment
  • Goals
  • Plan development
  • Execution
  • Monitoring and reassessment

Personal Finance Budget – Example

Preparing a budget or a financial plan is critical for giving you the best shot at achieving your personal and family goals. Below is an example of a simple monthly budget that could be used to manage your income, expenses, savings, and investments.

As you can see in the example below, there are three potential sources of income (salary, bonus, and other), followed by a list of expenses (rent, food, groceries, restaurants, entertainment, childcare costs, vacations, etc.), and the difference between the two is the person’s monthly surplus or deficit.

If you’d like to use this free template to help you with your personal finances and planning, please download the Excel spreadsheet and edit it as appropriate to fit your own needs. Additionally, you should always consult a professional advisor before making any financial or investment decisions.

Download the Free Template

Enter your name and email in the form below and download the free template now!

Personal Finance Careers

There is a wide range of careers that relate to personal financial management and advice. If you’re passionate about any of the topics mentioned in this guide, you may want to consider a career in the industry.

Some of the most common careers include:

  • Personal banker
  • Wealth manager
  • Investment advisor
  • Insurance advisor
  • Tax advisor
  • Estate planner
  • Financial planner
  • Mortgage broker

To learn more about the different careers in finance, visit CFI’s interactive Career Map to explore options on the corporate side of the industry. Some of the most common jobs on the corporate side include investment banking, private equity, and corporate development.

Additional Resources

Thank you for reading this CFI guide to personal finance. We hope it has helped you understand what managing personal finance is all about, why it’s important, and how to go about doing it.

CFI’s mission is to help anyone become a world-class financial analyst and have a meaningful career. To help you in your journey, you’ll find these additional CFI resources helpful:

Here’s how to monitor your financial accounts from Microsoft’s spreadsheet software with the ‘Money in Excel’ template.

If you want to manage your financial accounts but don’t need a full-featured and expensive program like Quicken, Microsoft offers a free add-on service called Money in Excel. This option helps you integrate your bank accounts and other financial data into Excel so you can track your expenses, spending habits, investments, and more.

The Money in Excel template can retrieve account information at most major financial institutions. Access to your accounts is performed through a third-party plugin provided by Plaid (Opens in a new window) , which handles permissions between you and Microsoft. You connect your financial data to Plaid, but Plaid does not share login credentials with Microsoft. (For more information about the security and privacy aspects of this feature, check out Microsoft’s Money in Excel FAQ (Opens in a new window) .)

As a premium Excel template, Money in Excel is available to Microsoft 365 Personal and Family (Opens in a new window) subscribers in the US. The feature is accessible only on the desktop; it won’t work on mobile. Here’s how to use Money in Excel to manage your personal finances right from a spreadsheet.

Get Money in Excel

Before you can start using Money in Excel, you must first add it to your instance of Excel. To grab the Money template, go to Microsoft’s Money in Excel page (Opens in a new window) and sign in as a Microsoft 365 subscriber. Click Edit in Browser to add the template to the browser-based version of Excel or click Download to get it for the desktop version of the program.

Both versions work the same. If you want to use Money in Excel anywhere from any computer, choose the browser-based version. If you want to restrict it to just specific computers on which Excel is installed locally, go with the download option.

After choosing the browser version, click the Continue button to add the template. With the Download option, download and open the XLTX file. After the file opens in Excel in Protected View, click the Enable Editing button at the top to add the template.

Click the Welcome and Instructions tabs at the bottom of the worksheet to learn how to set up and use Money in Excel. Click the Sign in button in the Money in Excel pane on the right-hand side to log in with your Microsoft account.

Connect Your Financial Accounts

Next, you need to sync your financial accounts to Excel. The right-hand pane explains how Plaid will connect to your financial accounts and how Microsoft uses Plaid. Click Continue through each screen to proceed through the setup.

The next screen presents a list of banks. Choose the bank at which you have an account to incorporate your financial information. If you don’t see your bank listed, type its name in the Search field at the top and select it from the results.

Sign in with your bank account credentials and click Submit. Then choose how you want to receive a security code to authenticate your identity. You can select email, phone call, or text. Click Continue, enter the code in the appropriate field, and then click Submit.

If you have more than one account at the bank you chose, check the accounts you want to view in Excel. Click Continue, and your accounts are then synced to your Excel workbook. From the right-hand pane, click the Add account or transaction entry and select Connect an account or Add a manual account if you wish to add an additional bank account.

View and Filter Data

Your transactions from the accessed accounts then appear in the workbook, specifically in the Transactions worksheet. Click the Transactions tab and scroll through each transaction to view the date, merchant, category, amount, account, account number, and institution.

You’ll see that the necessary header row and data filtering are automatically turned on in the worksheet, allowing you to change the sort order in each column. Click the down arrow next to a column heading to change the order among any of the following criteria: oldest and newest or newest and oldest; A to Z or Z to A; and smallest to largest or largest to smallest.

You can also filter the results to view only certain categories. For example, click the down arrow for the Category column heading and change the filter to show spending only for restaurants or only for shopping.

Next, you can filter the results to show only transactions in a certain range. For example, click the down arrow for the Amount column heading, move to Number Filters, then select a criteria, such as Greater Than. Type a number to see only amounts greater than the number you entered. Click the down arrow for the column heading and choose Clear Filter to remove the filter.

Charts and Categories

Click the Snapshot tab to view charts and graphs showing your spending for the month compared to the previous month. To view a specific month, click the down arrow next to the month listed at the top and change it to a new month. You can also see where and how you spend your money for the month.

You can add your own custom categories to track specific transactions by clicking the Categories tab. Go to the Categories section and select the Custom option. Type the name of the category under the Category Name column and the type of category, such as Income or Expense, under the Category Type column.

Go to the Transactions sheet. Click the down arrow next to a transaction to which you want to apply one of the new custom categories and select that category from the list. While you’re here, you may also need to change the category for any transactions for which Excel picked the wrong category.

Update Data and Change Settings

If you ever want to add or change any information in the workbook, check out the right-hand pane. Click the Update button to update your spreadsheet with the latest transactions. New financial accounts can always be added by clicking the Accounts tab and selecting Add account or transaction.

Add supplementary templates to calculate net worth and recurring expenses under the Templates tab. The For You tab shows you the top merchant on which you spent money, and the Settings tab allows you to view and modify key settings.

Be sure to save your workbook with a specific name before you close it so you can open and update it each time you want to review your financial accounts, transactions, and spending patterns.

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Pamela Rodriguez is a Certified Financial Planner®, Series 7 and 66 license holder, with 10 years of experience in Financial Planning and Retirement Planning. She is the founder and CEO of Fulfilled Finances LLC, the Social Security Presenter for AARP, and the Treasurer for the Financial Planning Association of NorCal.

What Is Personal Financial Management (PFM)?

While the moniker “personal financial management” is often used to refer to ways of managing your personal finances, it is also an actual term often known by its acronym, PFM, and refers to the type of software used for personal finance apps. PFM has been around since 1983 when Intuit co-founder Scott Cook grew tired of watching his wife struggle with all the paperwork involved in paying bills by hand.

He started to explore how to simplify, or automate, the process. On his way to hang a notice seeking a programmer at Stanford University, he fortuitously ran into Tom Proulx, who had done some programming and agreed to write a simple check-balancing program for Cook that became an early version of the personal finance software program Quicken.

And that’s how Intuit (INTU) was born. The company started by building out Quicken, but it was a crowded field. Cook and Proulx weren’t the only ones seeking a solution to the frustration of juggling all that bill-paying paperwork. When Quicken launched, there were already 46 other personal finance products out there, but many were clunky and not easy to use.

Quicken’s biggest selling point was its ease of use. Because it literally mimicked a paper check, the software became widely accessible to anyone who ever had to pay a bill by check. What finally pushed Quicken to the front of the pack was a combination of positive reviews of its Apple version, a direct marketing approach, and stellar customer service.

Key Takeaways

  • Personal financial management, or PFM, is the term used to describe the software that powers many different personal finance and mobile banking tools.
  • Since it first took off in 1983, the software has evolved and expanded beyond its initial purpose to declutter and simplify bill paying.
  • As customer behavior and customer needs evolve, so will PFM software and the apps that it powers.

Understanding Personal Financial Management (PFM)

Creating a software product that mimicked a hard-copy product allowed Quicken to draw in customers, and tuning into other ways that customers were using the product allowed it to keep evolving. That was a critical key to its success.

For example, once the company found that a third of its customers were using the software for business expenses, Intuit pushed out what has become today’s Quickbooks—a version of Quicken that focuses on tracking those expenses. It also created a feature that allowed customers to download their brokerage statements and incorporate them into financial planning.

That set the stage for other PFM products to become part of a growing abundance of personal finance tools available today. They include ones focused on tracking credit scores (think Credit Karma), ones that allow individual investors to trade for their own account (think Robinhood), and ones focused on tracking spending and bill paying (think Prism). PFM is the software that powers these apps, as well as many mobile banking tools.

Quickbooks integrates with TurboTax, allowing those who are self-employed to import their financial information to file their taxes.

Special Considerations

Banking and finance apps may share PFM software, but they are not all built the same. It’s important to define what your needs are to ensure that you are using the right system. Some of these apps have free versions, although many have subscriptions to access more advanced features. Some are built for Windows, some are built for Macs, and some live in the cloud.

While mobile banking can help with bill paying, tracking deposits/withdrawals, and transferring funds between accounts, personal finance apps are often built with more comprehensive money management tools and a greater ability to personalize features. Many not only allow you to pay bills and track deposits/withdrawals but also include broader options that give you the flexibility to take more control of your financial management goals.

Personal finance apps have evolved to become much more user friendly and targeted to customers’ needs. Overall, these apps will allow you to be more organized with your finances. At the simplest level, they will help you track your budget/spending and ensure that you pay your bills on time. If you have broader needs, then there are most likely apps for them, too—or soon will be.

This list is by no means exhaustive, but it provides an overview of the top eight personal finance apps as ranked by Investopedia sister site The Balance.

There are so many wonderful websites around, and it is difficult to know each and every one of them. The below list provides some of those websites that I find particularly helpful, even though they are not as famous or as prevalent as some of the big names out there.

1. BugMeNot

Are you bugged constantly to sign up for websites, even though you do not wish to share your email? If yes, then BugMeNot is for you. Instead of creating new logins, BugMeNot has shared logins across thousands of websites which can be used.

2. Get Notify

This nifty little website tracks whether the emails sent by you were opened and read by the receiver. Moreover, it also provides the recipient’s IP Address, location, browser details, and more.

3. Zero Dollar Movies

If you are on a constant lookout of free full length movies, then Zero Dollar movies provides a collection of over 15,000 movies in multiple languages that are available to watch for free on Youtube. It indexes only full length movies and no trailers, or partial uploads. In addition, it has a clean interface, contributing to a good movie watching experience.

4. Livestream

Livestream allows you to watch and broadcast events live to viewers on any platform. For the next time when you want to share your company’s annual CEO speech live to employees who are on remote locations, Livestream serves as a perfect platform.

5. scr.im

scr.im converts your email address into a short custom URLs, that can be shared on public websites. This prevents your email id from getting picked up by spam robots, and email harvesters who are on a constant lookout from your email id.

6. TinEye

TinEye is a Reverse Image search tool which is as accurate as Google’s Reverse Image search tool. As opposed to Google, TinEye provides a set of APIs that can be used for personal and commercial purposes, which makes it very useful for developers.

7. Fax Zero

Fax Zero allows you to send faxes to US and Canada for free. Additionally, it enables you to send faxes to countries outside North America at a fixed pay per use cost.

8. Snopes

Do you believe that fingernails and hair continue to grow after death? Why don’t you check out if this is true, along with thousands of other urban folklore out there, at Snopes?

9. Stickk

Is it difficult for you to stick to goals ? If yes, then let Stickk help you reach your goals. It makes use of commitment contracts to empower you to better your lifestyle.

10. Boxoh

Boxoh can track the status of any shipment package on Google Maps.

11. PicMonkey

PicMonkey is an online Image editor, that allows you to touch up your images. Also, you can apply different effects, fonts, and designs to your images. It is a perfect tool to create pins for Pinterest and awesome looking Facebook covers.

12. Trello

Trello is a great online tool for organizing just about anything using Kanban style cards. It provides a highly visual way for Online Collaboration, and is a simple free tool for Task and Project Management.

13. Short Reckonings

Short Reckonings is an online tool to keep track of shared expenses. It is deceptively simple, easy to use, and allows you to enter expenses with the fewest possible clicks. A clean, ad-free interface adds to the charm of this simple website.

14. Memrise

Do you fancy learning new things in small byte sized packages? If yes, then Memrise is for you. The additive nature of gaming combined with memory improvement makes this an excellent resource.

15. Instructables

Instructables provides instructions to help you build just about anything you can imagine. It provides a platform for people to explore, document, and share their creations.

16. join.me

In today’s world, where collaboration across multiple stakeholders is key, join.me provides an online platform to share desktop screens. Record audio for meetings conducted with participants not in the same room. In addition, it is a simple tool to share your screen with just about anybody on the web.

17. Sync.in

Sync.in allows multiple people to edit documents and notes in real time. It is a great tool for online collaboration.

18. Privnote

Do you wish to share notes and information that self destructs immediately after it is read ? Privnote does exactly that.

19. ScribbleMaps

Have you ever wanted to place your personal markers, shapes, and scribbles on Google Maps? Even though Google Maps does not allow that, ScribbleMaps does, and it does a great job at it.

20. TripIt

TripIt is a painless way to organize all the details of your vacation or business trip. Forget your flight time? Can’t find the e-mail with your hotel’s address? That won’t happen with TripIt, which keeps your itinerary in one place.

21. Skyscanner

Skyscanner is a leading global travel search site, providing instant online comparisons for millions of flights on over a thousand airlines, as well as car hire and hotels.

22. Hostel Bookers

Hostel Bookers is one of the best search engines to search for cheap hostels and hotels while backpacking or traveling around the globe.

23. Fitday

Fitday allows you to track you diet and weight loss through its journal. The personal dietician and free articles on nutrition and weight loss on their site are a great bonus.

24. Endomondo

Endomondo is a mobile app that allows you to track your workouts. The website allows detailed analysis of your training, that makes it a valuable tool to understand and plan your workouts.

25. My Fitness Pal

If counting calories is your main goal, then My Fitness Pal is the best web and mobile application out there. The service has a massive database of meals and exercises to make it easy to accurately count calories.

26. Fuelly

Fuelly tracks the gas mileage for your cars and helps you to analyze, share, and compare your vehicles fuel consumption.

27. 3-Minute Journal

3 Minute Journal is different than most other Journals out there. This application allows you to track your moods, achievements, failures, and moments of gratitude. In addition, it does great analysis over these parameters.

28. 750 Words

750 Words is based on the idea of “Morning Pages”; that advises aspiring creatives to start each morning with three pages of stream-of-consciousness writing to clear away the mental clutter, leaving you with a clearer mind to face the day.

29. Kiva

Kiva is a micro finance website, that attempts to leverage the Internet and a worldwide distribution of micro-finance institutions. It alleviates poverty by connecting lenders to people in need.

Do you have other favorite sites that you find incredibly useful?