Introducing a new guest poster Amos Faulkner who writes about basic financial planning.
by Amos Faulkner
With so many options on the market, choosing the right personal finance app to work with your lifestyle and circumstances can seem like a daunting task. So start by evaluating what your needs are when it comes to keeping track of your finances. Are you trying to buy a home, planning for taxes, or wanting to save time? Knowing what your goals are will help you decide on the best personal financial app for your situation:
Saving Up for a Large Purchase
If you’re planning on buying a home in the near future, use an online affordability calculator to determine how much house you can afford based on your budget, and use your personal finance app to help you reach your goal of homeownership. Once you figure out how much of a down payment you’ll need to purchase the property and what your monthly mortgage will be, the app will track your progress toward that particular financial goal. You’ll also be able to monitor your spending habits and see if you could cut down some of your expenses to reach your financial goals faster. Categorizing your spending will help you get a clearer picture of where your money is going. And if you opt for a financial app that provides real-time analysis of your transactions, you’ll be able to detect anomalies in your spending that could possibly lead to overdraft fees.
Keeping Your Business and Personal Accounts Separate
If you own a business and you’ve formed an LLC or a corporation, one of the benefits of these structures is pass-through taxation: the tax is skipped over the company and passed onto the owner, meaning your business only gets taxed once. But avoid the pitfalls of commingling funds and mixing personal and business expenses. Make sure you have two separate bank accounts, and avoid moving money back and forth between the two, or you could become personally liable for the debts and lawsuits incurred by your business. A separate business account will also make it easier to see how your company is performing, and it will greatly simplify your accounting come tax time. So make sure you get a personal finance app that allows you to track business transactions as well as personal income and expenses in separate accounts.
However, there are times when you may need to transfer money between your personal and business accounts. For example, if your company is struggling, propping it up with your own money might be necessary. On flipside, however, you can draw on your business accounts when your LLC is making money. Hiring an accountant or financial advisor can help you keep your finances in balance.
Preventing Data Entry Mistakes and Duplicate Payments
A financial app automates the process of recording transactions, which leaves less room for human error. Some apps allow you to capture receipts from scans, photos, and emails, then sort and categorize the imported financial information, so you don’t have to spend time manually entering data and possibly generating an error in your accounting. Getting an app with a bill payment tracking function will let you set reminders so you won’t miss a payment, and you’ll avoid having to pay late fees and penalties. Conversely, if you’re using the app for your business, you can avoid paying the same invoice twice due to data entry errors or supplier duplicates. Some personal financial apps offer more comprehensive solutions for small business owners who want to have all their accounting in one location and at their fingertips: they can be used for payroll, invoicing, and generating financial reports and statements.
Today, more and more people are relying on personal finance apps to pay their bills and to keep track of their spending, and for good reason: those apps boast time-saving features that can end up saving you money and put you well on your path to financial freedom. So take time to compare what each app has to offer, and find the best one to help you reach your goals.
Amos Faulkner wants to help people “do money well.” Money is a constant in our lives. Yet, as a bank teller, Amos realized that many people don’t pay enough attention to how much they have or how much they need, now and in the future. Well, now, the buck stops with his site, domoneywell.com. From teaching your children how to manage their money to saving for your golden years, Amos will cover it all.