How to Choose And Use Financial Software

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How to Choose And Use Financial Software

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There is seemingly an endless choice of financial software that an individual can use to track finances in the areas of investing, money management, and tax preparation. With more money to be made online than ever before, new products and software are released almost daily to help people manage this.  As such, an investor should take the time to ensure they choose the best financial software for their needs.

While a program may be great for one user it may be a nightmare for another. When deciding which financial software to use, it is important not only to take into consideration your goals but also the ease of use and complexity of the software.

Many versions will allow you to take a free trial to test the program before you purchase it and doing so is strongly recommended.

Money Management and Investment Software

Many of these programs can be downloaded from the internet and are free of cost while others can be purchased online or in stores. Users often report that the free programs are just as effective as paid programs so it may be beneficial to start with a free version to see if the software is compatible with your needs. Money management and investment software include functions that allow a user to more efficiently manage banking and investing needs like paying bills online, setting spending budgets planning for retirement, researching stocks, and tracking investment performance. Some of the most popular programs for this include:

  • Quicken- Budgeting and banking software that allows you to pay bills and automatically categorize spending and access all of your accounts in one place.
  • ICash- Personal finance software intended to keep track of incomes, expenses, credits, debts, and help stay in control of your bank transaction.

Tax Preparation Software

Tax prep software can often be utilized directly on a website and is designed to walk you through tax return preparation step by step. These programs have become increasingly popular and for many users can be the deciding factor in not needing costly help from a CPA. The biggest benefit from these programs is that they can take you from start to finish at a fraction of the cost a user would spend with an accountant.

These programs offer the most benefit to users with a simple return and offer the ability to import your tax information from W2’s, provide tax advice, review any errors and file your return with the IRS on your behalf. Some tax prep programs to consider are:

  • TurboTax- Online tax preparation software coaching the user step by step and filing tax returns with the IRS and state.
  • ESmartTax- Online tax preparation software for individuals and small businesses alike to prepare and file their federal and state income tax returns.

Users are cautioned, however, that these programs are for individuals with relatively simple tax filing needs.  High net worth individuals with numerous tax issues and exposure to addresses will likely need to consult a professional to ensure they get the best outcome possible.

At the end of the day choosing the right financial software will come down to cost and user compatibility. After all, if an individual can track their finances just as efficiently with a pen and paper then there is no point in buying financial software. For investment tracking, banking, and tax prep purposes, many financial professionals recommend that an individual interested in taking control of their personal finance use one or more of these programs.