No matter what end of the range you fall into, it’s never to late to sort out your finances and try to find out why you keep falling short (or nearly so) every single month. It really doesn’t always come down to how much you make, sometimes a healthy financial life boils down to understanding where all the money is going.
Most people just don’t want to take the time to sit down and go over every excruciating detail of a “budget”. And doesn’t the word “budget” sound boring and drab? Seriously – who wants to spend a Saturday afternoon budgeting when you could be spending it at the mall and going out for some Chinese food?
Well – maybe that’s half the problem. Lucky for you, I’m going to share a free, open-source money manager software that Damien previously mentioned very briefly, called Money Manager Ex that’s going to make it very easy to organize your finances, create a budget and monitor where all your money is flying off to.
Quickly Create Your Financial Database
This app is a little bit like ClearCheckBook, which Daniel covered in 2008. However, I do think this one offers much more functionality. In Money Manager Ex, each “account” is called a Database. When you first launch the software, you can get started by clicking on “Create a New Database.”
The next step is to pick your currency. From the list, you’ll see that this software isn’t just your run-of-the-mill U.S. currency only application. The developers have really taken the global community into account.
The first thing you’re going to want to do is create your bank accounts. Later, this will be automated, but to get started you should create each account and fill in all the details. Create a new account by clicking the “New Account” button in the icon bar.
It doesn’t really matter what you put for the balance, because later you’ll be importing the actual details and transactions from your real bank account.
To get an accurate picture of your overall financial standing, you’ll want to go through each category in Money Manager Ex and add any accounts, investments, funds, and assets that you may own. Assets include things like property, cars, jewelry or artwork.
When you have all of your assets and accounts set up, it’s time to create your budget. Create a new budget for the year, and you’ll see the center pane populated with a template budget. If you already have a list of your bills and your income, just go through this and add all of those items in.
If you don’t have a list yet, well then now is the time to take stock of all of the bills you owe. The template makes this process a lot less painful, and it will remind you of things you pay that you probably normally forget about. Don’t forget to also add your income items into the budget as well!
Now, unless you have the time to start manually typing in all of your bank transactions in order to keep the software synced to your bank account, you’re going to want to export/import your bank data for each account. Money Manager Ex can import QIF and CSV files, so check with your bank website to see what format you can export to.
This will bring in all of the transactions. The one somewhat time-consuming job you’ll be left with is to categorize each transaction. This is worthwhile though, because it will make the reporting features of the software much more helpful – and could very well reveal to you where the money-drain is in your checkbook.
The final task you’ll need to do is to click on “Repeating Transactions” in the left nav and add all of your current bills. These are expected, predictable bills that you receive and pay every month, with a known due date. This helps the software automate some of the updates, and also provides from better future predictions in the reporting section.
Speaking of which, the bulk of the left navigation is taken up by all of the reports that you can use to examine your financial standing in a very graphical way. You can see where most of your income comes from, where most of your outgoing money goes, a full transaction report for a certain time frame, and much more. This is the area that makes this money manager software so valuable.
Budgeting and managing finances is never fun. If you’re anything like me, you’re too busy trying to earn a living, to sit down and nit-pick where every penny goes. But I can tell you that this is one money management app that won’t take away too much of your precious time.
Just take the time to add your budget and assets once, and all you have to do is export transactions from your bank account to get regular updates on your financial health and well-being.
Give Money Manager Ex a try and see if it helps you uncover any low-hanging fruit in your spending habits. Did it help you get your budget in place? Share your experiences with the software in the comments section below.