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What is a personal finance manager?
A personal finance manager is a computer program specially designed to help people manage their financial activities. These financial activities may include, but aren’t limited to, keeping track of investments and balancing checkbooks, which are possible offline as well as online.
Personal finance management software development started in 1983 with the founding of Intuit. Scott Cook and Tom Proulx, the company’s founders, saw the rise of the personal computer and decided to develop personal financial software. Their flagship product, Quicken, became a standard for many households and was eventually followed by QuickBooks, which was aimed at small businesses to help manage their finances.
Around the same time, a similar competing product introduced by MECA Software and designed by author Andrew Tobias called Managing-Your-Money (MYM) came out, first running on the Apple II, and later on the IBM PC.
Later, in 1990, Microsoft released its own personal finance manager platform called Microsoft Money.
Around 2006, a wave of online personal finance manager tools launched, with Wesabe and Mint at the forefront. Since 2008, personal finance management has expanded in scope, with tools on personal finance and lending sites.
A personal finance manager can make life easier for its users. Most applications can be customized to a person’s financial goals and needs.
To be sure, personal finance managers enable consumers to pay bills on time by allowing them to set alerts or reminders tied to specific times ahead of payment due dates.
Effective personal finance managers also allow people to customize spending categories. This saves consumers from a lot of confusion when using preset categories for spending.
In addition, the personal finance manager also will help in cutting expenses. It allows people to track spending in areas that might be unnecessary, enabling them to make adjustments to get back on track to financial stability.
In most applications, people are able to track how near or far they are from reaching their financial goals, based on predetermined milestones and goals set during account setup.
Personal finance manager example
Chuck uses a popular personal finance management software tool that runs on his PC to record banking transactions, to plan a monthly budget and measure progress against it, and to track his investments, as well as their prices and performance, on a daily basis. In effect, the software helps Chuck to keep his financial house in order.