Organizing and tracking the family finances does not require advanced accounting knowledge or a large amount of extra time. Setting up a family bookkeeping routine is a simple process of recording the funds coming in and the funds getting spent on a regular basis. Once you have this system in place, it becomes much easier to identify extra spending on non-essential items and also to make reasonable debt repayment goals. The first logical steps include selecting a user-friendly bookkeeping software program, getting it installed, adding the information and setting up a regular schedule for making entries.
Selecting a Bookkeeping Program
Several choices are available for personal bookkeeping software, and the best one for you includes only those features you need for keeping track of your family's bills and paycheck amounts. Starting with a spreadsheet program is a good option if you are familiar with single- or double entry bookkeeping methods. If not, some other programs take care of this process for you. Some personal finance software performs automated tasks such as:
Linking to your bank account
Automatically detecting and importing direct deposits
Calculating repayment schedules for mortgages, credit cards and other debts
Some of us may find that updating the household books can be a challenge due to the many other obligations in our busy lives. A number of personal bookkeeping programs now come with text or email alerts to remind you when to record transactions on paydays and just after the due dates for the bills. Many also include mobile apps for adding these updates while away from the home computer.
Benefits of Tracking the Family Finances
Tough economic times have caused many of us to reevaluate our approaches to spending and saving. Even for those of us who have held on to our jobs or maintained our businesses, rising costs of living have made saving more difficult. Higher food and gas prices can also lead to increased credit card use for these everyday items. Investing the time in personal bookkeeping can help your family get a better handle on these expenses. Some benefits include:
Identifying areas to reduce spending on non-essentials
Freeing up more money to be put into a savings or retirement account
Figuring out your household's debt-to-income ratio
Personal bookkeeping gives you an accurate and complete picture of your family's financial health. It also serves as a diagnostic tool to identify problem areas. This information is essential for making needed changes in spending habits.