What are the Different Methods for Organizing Finances?

Using financial management programs and developing spreadsheets are two methods of organizing finances that may be ideal for people with at least a moderate amount of computer experience. Banking alerts and cell phone applications may be better for other people. Those who prefer a basic method may experience positive results with pen and paper.

The best method of organizing finances is a matter of personal preference. There are several ways it can be done. What is good for one person, however, may not be good for another. Take computer software as an example. This can be a great tool for organizing finances. Depending on the type of program used, a person generally has a wide range of capabilities, including managing multiple bank accounts, making automatic bill payments, and constructing detailed graphs and charts.

While a computer-savvy individual may give financial management software glowing reviews, a computer novice may not be as enthusiastic. Despite all of the features, she may even be discouraged by the difficulty of figuring it all out. There are numerous other methods of organizing finances, however.

Those with a moderate amount of computer skills may find spreadsheets useful. Spreadsheets also provide a person with numerous capabilities that are likely to be more difficult when attempted manually. These include automatic calculations, conversion of figures to graphs, and the ability to easily copy information from one place and put it in another. When using spreadsheets for tracking finances, some may find it best to use a single worksheet for a month that contains balances, expenditures, and income. Another method is to create a book for a single month and have several worksheets, each utilized for a different purpose.

One major obstacle many people have with organizing finances is tracking the amount of money they spend. Automatic cell phone or email notifications can be of major assistance in this regard. This method is only effective, however, if a person abandons the use of cash and relies mostly on electronic payments. Each time she swipes her debit or credit card, a record of the transaction will be sent to her.

There are several cell phone applications that can also be used in conjunction with automatic notifications to develop a financial management system. A person may find that finance trackers help to keep them organized. These often operate similar to computer programs though the capabilities are likely to be a bit more limited.

Technology may not be the best option for everyone. When this is the case, a ledger or an agenda can also be used for organizing finances. Although this method offers the least features, it may be the simplest method for some people. Manually recording items such as bill due dates and balances may even increase an individual's ability to remember these things.