Tuesday, September 15, 2009

Are you striking the right financial chord?

Choosing the best money management software among various available tools can be a mind boggling task. Many a times, we end up choosing the wrong money management tool and realize at the later stage that most of the features, if not all, are left unused. Most money management tools sport a host of features in an attempt to cater to the need of a diverse user base. In addition to this, money management tools can be distinctively different in certain aspects though they might look identical on the surface. Therefore, it is imperative that proper research is done before choosing a money management tool.

Selecting a money management application that is right for you is crucial but to be able to make the right selection you would have to be absolutely sure of what you want. This mini guide is an attempt to help users navigate the labyrinth of money management tools.

Bank account Aggregators: This section of money management tools primarily acts as a single interface to various bank accounts that your may have. People who want to avoid logging into different bank accounts to track their finances and/or get rid of manually adding their income & expense transactions could really benefit from ‘Bank Aggregators’. For people who just want all their bank accounts under a single hood, they should opt for money management tools that offer bank integration. Prominent money management software such as Mint, Wesabe, Yodlee etc. seems to be the right option for them.

All in all, money management tools that offer bank integration can be really effective in today’s fast & busy life. However, applications like these can be limited in scope and may not provide essential features for money management.

Day-to-day manual money management tools: This section of money management caters to the needs of the masses; people who want to manage their expenses incurred on daily basis. They can be students, homemakers or anyone who wants to keep a track of every single penny they spend. While cash expenses will have to be entered manually, such applications also allow users to import bank/credit card statements detailing their income and expenditure.

Money management tools that fall in this category also provide add on features like multi level reporting, budgeting, bill payment alerts, schedulers, recurring transactions, and more. Such applications are quite useful in expense tracking, budgeting and financial planning. A few money management applications that fall in this category are Omnispense, Pennyminder, manageME7 etc.

Comprehensive money management application: This set of money management tools are comprehensive in nature and present a hybrid variety of money management tools mentioned above. In short, they offer the ‘best of both worlds’.

They offer the ease of bank integration and the goodies of manual money management application. So you can not only sync up your bank and import bank statements, you can also run reports and perform advanced budgeting. A good example would be Buxfer.

So if looking for a money management tool or likely to make a switch from the existing one, be sure to know what to you want to get what you want.

Guest post by Saurabh Kanwar

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