What Should I Look For in Personal Financial Management Software?

We often underestimate the importance of proper financial management and simply rely on the fact that our bank balance is still in the black; however, we are at a loss to explain where all of the money went. It's not unusual that many individuals are aghast when they look at their monthly bank statement and see that their paycheck deposit is gone through a series of many cleared checks. This situation can be unnerving to anyone, but if you are using personal financial management software, you can see at a glance what was spent, and what it did for you. It's not just about saving money and paying off your credit card bills, but the software should present strategies to maximize saving, eliminate debt, and give a true picture of your current net worth. In short, a financial management program is a highly detailed and complex system that is vital to keep track of spending as well as net worth.
The first thing that comes to mind when considering personal financial management software is the process of budgeting. The heart of proper financial management lies in budgeting, as it helps to keep track of spending and earnings, while at the same time, gives a view of your overall financial condition. These software programs are usually incorporated with one of these two types of budgeting methods: Retroactive or Proactive budgeting. The former one allows you to create your own budget, and it keeps track, after the fact, whether you followed your set budget or not. On the other hand, Proactive actually assists you to make a budget, and guides you through so that you can achieve these budgeted goals. In most cases, under this method, you are asked to keep aside some additional money for emergencies. This money that is set aside, allows the software to make financial recommendation with much more confidence and accuracy.

Budgeting is most certainly a very important aspect of good financial management, but it isn't the only one. Keeping track of your true net worth is also equally important. The budgeting process helps to keep track of our short and long term goals, and whether we achieved them. In order to properly track our net worth, we need to bring in the value of our bank accounts, stocks, bonds, real estate, etc., and update them regularly. The more complex personal financial management software systems have this process as well, and will give you an accurate picture of your financial position. This type of financial information can be key when it comes to making crucial financial decisions, or applying to your bank for financing. Also, in this fast paced and globalized world, many individuals tend to have more than one bank account, and often times, various financial interests, making the situation even more complex. Good personal financial management software will be able to track this and present an accurate picture.
In summary, budgeting and keeping an accurate track of your net worth are crucial when it comes to good financial management. When you are exploring options for effective personal financial management software, make sure the program is able to handle your current and future needs. In addition, a program that is relatively easy to use and presents the type of reports that you require, is a must.

Is a Lack of Financial Education the Reason for Poor Financial Management Decisions in America?

Americans study all of the essential things in school, algebra, science, history, languages and the arts. However, many people wonder why there may be a lack of financial management classes to learn basic financial planning strategies. Many students don't know the first thing about retirement, savings, credit cards, debt or even basic budgeting strategies. Although some might say this is something that should be taught by parents, today's parents are the byproduct of the credit card generation; therefore many parents only learned the cause and effect of their financial matters by trial and error.
It is not only the parents that are financially challenged. Even teachers lack the training because of an education system that lacks the teaching of fundamental skills needed to achieve fiscal responsibility. Some of those more savvy in the diligence of their finances may seek the services of a financial management advisor, however given today's economic turbulence, the very root of the problem has become apparent in our society's apparent financial illiteracy.
According to a recent survey, over 60% of all high school students failed certain questions about basic household financial management and were not given the proper role models for financial independence. Across the gamut, the media has highlighted examples of adults who have mismanaged their money, losing homes or severely damaging their credit by defaulting on their loan and credit card payments, as well as college students who default on student loans and many other examples. Even big businesses on Wall Street have gone bankrupt and the entire financial system of banking seems to be crumbling right before our very eyes. We expect our youth to learn about proper financial planning and financial management amid a society that has accepted financial failure as the norm?
Today's Financial Buzz attributes many of these economic problems not entirely to the fault of any one entity, enterprise, or government but instead to the theory that the need for financial management practices should be taught early on to our youth. By teaching everyone how to become financially literate, we could create a society of fiscal responsibility. Instead, it is becoming rare to see a young person who doesn't abuse credit by either racking up high debt, paying late or even bouncing their checking accounts time and time again by relying on unsafe measures, such as online banking. Some do learn these best practices in college through economics or financial courses, but those students are becoming far and few between.

Some critics say that in order to add any more mandatory courses to the education system would require dropping some other important classes. Other say that the public school system is not supposed to be a lesson in life training manual and that those types of learning exercises should be enforced by parents. However, there are two sides to every coin and with many parents now in deep financial troubles themselves, they may not be the best role models for kids to follow. Foreclosures have reached an all-time high while stocks and securities have reached an all-time low, indicating a big problem with the entire system of financial management and not just a few sprinkled examples here and there.