Step 1: What type of software do you need

First, decide what you want to get from the program you choose. There are fairly simplistic programs that simply assist in balancing the check book, provide online banking, and organize your information for tax season. More advanced (and more expensive) programs will calculate further into your financial recesses integrating your small business, estate planning, double-entry bookkeeping, playing out probability scenarios and developing strategies.

Step 2: Where to find your programs

Next, start looking for programs. You can shop around manually by walking into every Best Buy, CompUSA or other computer store you see, or you can do it the normal way and surf the web for finance software. To get a general idea of what the various different programs have to offer you can look into magazines that will give reviews of and rate the software. They will also cover how complicated the programs are, how expensive they are, and what exactly your computer will need to run the program. Also, ask around. Friends and business associates that might have some experience with a program you are considering or even have a suggestion for a program you have not located. This will allow you to compile a list of workable options.

Step 3: Test drives

After getting an idea of some of the financial planning software programs you might be interested in, start test driving the programs. The advantage to shopping for the programs online is that they often will offer a demo version to allow you to try it before you buy it. Compare the programs how easy the programs are to use for you. Keep in mind if you are looking for a more comprehensive program the learning curve will be a little steeper than a program with less extensive capabilities.

Step 4: Narrow the list

If you have not already narrowed down your list to one or two programs, you can either flip a coin or (since this is your money at stake) get a little more picky. Dig a little deeper into what the programs have to offer. Integration is an important feature. For instance, Quicken is a popular program that integrates with Intuit’s TurboTax; another popular program that is dedicated specifically to the handling of taxes. Quicken also works with QuickBooks which is an accounting program small businesses frequently use. You can also check to see what program might be recommended by your bank for the most effective interface.

 Step 5: Use the program

Once you have your program chosen, it is time to start putting it to use. If you chose to go with a program you had to pay for, hopefully it will be worth the investment and pay for itself. The more expensive programs can offer strategies and suggestions for ways to save money. However even the simpler programs can be a very effective way to help save money if it shows you exactly how much money you are spending in every area in a clear and understandable manner. Sometimes just seeing how much money you have blown on arbitrary things will give you pause and bring it to the forefront of your financial consciousness thereby reducing the likelihood of continued spending. This is one of the basic purposes of the programs. But be sure to use it. If you purchase the program and do not adhere to any sort of savings plan or even update it with spending habits (if it does not do it automatically) there is no point in having purchased a financial planning program in the first place.

The very first step in managing your finances effectively is to choose the right program to take care of your investments. By taking the time to make the right choice in financial management software you are ensuring a good base from which to handle your financial affairs. Remember that you are going to have to learn this software and you are going to become familiar with it. Once you have that sort of momentum built and a rhythm it is going to be more difficult to break away and into another program. This is why it is worth it to take a little extra time and choose a program that fits you most suitably.

The financial management is a very important process and therefore deciding on the suitable program to help you get your finances in order is just as important if you want to get things right.

Since the advent of the World Wide Web and the consistent improvements of computers more and more people have been taking advantage of the technologically advanced environment choosing to electronically access many accounts and as well pay for many accounts using the same interface. This is a natural symptom of providing an alternative that is cheaper and more convenient than using traditional systems of mailing out envelopes with checks or even driving to an actual location to pay for or deposit into an account.

Identity theft

The down side of all the technologically provided convenience and expedience is that for those equipped with the knowledge and possessing the capabilities to do so can also access your information.However, identity theft has been going on since long before the internet and computers have existed. But with financial planning software, now all of your accounts can be accessed from a single point; one program, one password. Does the ultra convenience and accessibility of these programs put you at greater risk for identity fraud?

On one hand the argument is made that identity theft has been going on since identities have existed. Thus technology and further accessibility to information that in aggregate comprises your identity will do no more harm than for instance a postal service. In other words the detrimental effects of technological innovation do not outweigh the benefits that it has provided.

On the other hand, though, the argument can also be made that by focusing all of your information into one access point, this will increase dramatically the temptation and likelihood of identity theft; a classic case of ‘putting all the eggs in one basket’. That while identity theft may have preceded computers, interconnectivity, and programs such as financial planning software in particular, you will be dramatically more at risk not only for the probability of becoming a victim of identity fraud, but additionally to more thoroughly suffer as a thief will have access to virtually every piece of your financial world. The answer to this depends on how you approach the fight against identity theft.

Defense

One approach is an absolute defense. This will mean going in the direction of protecting all your information as much as possible. Followed to the extreme this logic would result in having none of your information online, doing no online payments, banking, or even email and social networking; going off the grid entirely. Unfortunately as was stated previously, identity theft can still occur. Your mail can always be intercepted or your garbage might yield plenty of documents that can be used in order to gain important personal information. A credit card or cell phone company might get hacked with your information in the database. So the only absolute defense is to have no accounts with your information stored in them anywhere. Imagine how hard life would be with no cell phone, no credit cards, no car payment or house payment; everything you ever use must be paid for in cash. Though this might offer a nearly full proof defense for identity theft it is fairly unrealistic in practice. For those that are extremely dedicated to protection against identity theft, it will ultimately come down to a question of just how much you are willing to sacrifice for protection.

The best defense is a good offense

A more effective defense is to go on the offense. By embracing the technology available today and using that to your advantage in the fight against identity theft, you can assure your safety and also live realistically within the demands of modern reality. By not only not shying away from the connectivity of the internet and the focused accessibility of financial management software programs but by utilizing these services completely you will yourself be absolutely appraised of everything that is happening at all times with every dollar of your financial world. While this is less of a defensive approach, as shown, defense is never absolute. By focusing more on early detection of identity theft rather than on prevention altogether identity theft is weakened extensively. This can be evidenced by identity theft trends which have consistently decreased over the course of the last five years.

Financial planning software is an excellent deterrent against identity theft due to the very same reason some opponents accuse it of being vulnerable. It is an integrated program that allows for keeping track of all aspects of a financial environment from one central location or program. Relying on a defensive strategy for prevention of identity fraud is ineffective in moderation and unrealistic in the extreme thus making it an alternative not as choiceas the offensive technique of early detection. Early detection is a much more effective, not to mention realistic, approach to ensuring you are not a victim of identity theft.

In the modern world of computing and doing business online the most important thing is security. With good financial planning software you will have no worries.

By determining how much of a comprehensive program you need it is possible to begin paring down the amount of programs that will be appropriate for your situation. There are programs that are fairly simplistic and have a price tag of $0. On the other end of the spectrum there are programs as high as $2000 for a yearly license. If you have an extremely diverse and complicated portfolio of assets, it might benefit you to attain a program that can effectively organize and assess your entire financial environment giving you a strategy for savings. If, however you are simply trying to pay down your credit card debt and free up some cash to spend on the weekends, you do not necessarily need a Monte Carlo simulator or stock program to handle it. If you are not sure what some of that means, you probably need to go with a simpler program.

Here are just a few of the many available financial planning programs with a relatively brief overview of each:

Advice America

AdvisorVision Comprehensive Planning Edition (CPE) $1500 annually or $150 monthly

Mint (part of Quicken now) free

MoneyGuidePro $1295 (annual license)

MoneyTree offers two different programsSilver Financial Planner $495

TOTAL Planning Suite $850

Separated into three phases:

‘Easy Money’ which is goal based:

• For use with middle-income clients, it determines retirement needs with solutions to potential shortfalls.
• Analyze long term care, life insurance and disability
• Assets and net worth

‘Golden Years’ which is based on the cash flow:

• For the client that seeks fine-tuned detail and extremely accurate tax analysis on the yearly basis
• Focuses on asset growth, expenses, taxes, and income
• Monte Carlo simulations
• Capital accumulation and draw down

‘Strategic Solutions’ which has specialized reports

• A specific module for quick analysis and reports of specific scenarios
• Early IRA withdrawals
• Taxable account and deductible retirement plan
• Single-life or joint pension distribution
• Monte Carlo Simulations
• Retirement taxes and cost of delayed start to savings

As you can see the options available in each program can become quickly overwhelming if you are window shopping. Determine your specific needs for financial planning and your price range. Keep in mind that if your financial situation is complicated enough, the more expensive software could more than pay for itself via the savings and strategies that can be organized. If you are not sure where to start, begin with a simpler program that costs less. Or even consider a trial or demo version which many companies will offer.

Before purchasing a financial planning program make sure to compare all the best programs offered and try a demo version where available so you could get the best possible deal.

Some work based on commission while others work with a set annual percentage of your assets. Some that work within firms will even utilize the advice of other agents with specific expertise in certain areas. Which is the better option; the automated computing power of financial planning software or the experienced judgment of a credentialed financial planner?

There are quite a few variables to consider when determining whether having a personal financial planner or using financial planning software is the most suitable approach to handling your finances. By going through these variables you can determine what your financial needs are and be better informed for making the decision between either adviser or software.

How prepared are you to manage your own finances?

It is important to answer this question honestly and accurately. Some people can be intimidated or overwhelmed with the idea of managing their own finances. Do not sell yourself short, it may not be as complicated as you think. On the other hand, it is also important to recognize your limits. While you might be able to get by handling your own finances, there also is the possibility that you are coming up short in areas where having a more thorough grasp of things could benefit you substantially.

Are you disciplined enough to stick to your plan without having a coach?

You know yourself better than anyone else and, again, you would do yourself no courtesy by lying to yourself in answering this question. If you know you will not follow through with plans set by the most efficient financial planning software, having someone in the decision making process that will ensure you stick to your goals might be necessary for your financial plans to be successful.

How complex is your financial situation and what level of help can you afford?

This is a more quantifiable question. Financial planning software can cost anywhere between $0 and $1300. Financial advisers working on either commissions or a set fee will generally charge between .5% – 2% of your assets. Often the larger financial adviser firms will require a minimum of $500,000 in assets to take on a client. If you fall below that line chances are greater that you do not yet require a financial adviser. However, it might behoove you to employ an adviser even on a temporary basis if you find the complications of your financial life are considerable, for instance if you are dealing with a death or a divorce, a looming retirement, own a business or real estate, have a special needs dependent, and/or some other complication.

If you decide to go the route of a financial adviser it would probably be a good idea to have it set up as a strict nondiscretionary account, meaning that the adviser will require your input for any alterations of your portfolio, your debt management, or any other aspect of your financial world. The alternative is a set allocation program that allows your adviser to manipulate certain aspects without your consent. This can be good for minor changes but any major changes, if not all changes, should involve you as it is ultimately your money that is at risk.

Other than that the general rule for financial advisers should be similar to that of a software program. Determine the current state of your assets and where you want to go with them. Determine what your risk tolerance is so you know exactly what your limitations are for achieving your financial targets. Finally, devise and execute an effective strategy for getting there and make sure to stick to that strategy.

The answer to the question of whether a financial adviser or financial planning software is the best option depends on from what position the question is asked. If money were not a consideration the answer would always be to attain the services of a financial adviser. Oftentimes financial advisers will use financial planning software in assisting their clients. However the costs involved are necessarily a concern considering the very nature of the subject. The whole point of financial management is to free up additional finances, whether for retirement or some other financial goal. The first step in managing your finances is to determine how great a financial investment to commit to protecting and growing your existing financial investments.

In the complex financial world today organizing your finances is essential. Certified financial planner or financial planning software can both help you greatly in managing your finances, but there are some differences you should know before deciding on which to take.

To understand fully why it might benefit you to buy a more expensive program or why it might benefit you to buy a less expensive program and what factors will determine each scenario, you need to have a basic understanding of how these programs work and what their intended goals are.

Financial planning programs are designed to simplify what can often times be a very complex financial situation. When faced with multiple different assets and debts, a financial climate with frequent and hard to anticipate variances, and a need to save money, these programs can be a life-saver. By organizing and simplifying the many complexities, it can be much easier to determine a path towards financial goals.

However some of the higher end financial planning software programs will not only clear up the confusion, but will also assist in mapping out a strategy for achieving your goal. Most programs will offer bar graphs and pie graphs as well as other charts reflecting the values of the status of your various different accounts. Additionally, the information from these accounts can all be accessed from one central location. So your stock portfolio, your retirement savings, your mortgage and credit card debt can all be cross referenced and analyzed in an integrated fashion to determine how best to achieve your target. Only some programs though will offer up suggestions as to which credit cards might provide cheaper rates and which banks might provide higher interest on your accounts.

Now that you have an idea of some of the capabilities of financial planning software, you can begin to address the issue of what price range would most appropriately suit your particular financial needs. Keep in mind that not all programs are better in proportion to their price. In fact, better is not an accurate term at all. The more expensive a program is will generally indicate how thorough or comprehensive the program’s functions are. Furthermore, some programs that might be a little more expensive might not have more bells and whistles than a program slightly less expensive. The price is just a general guideline.

On the lower priced end of the spectrum there is Quicken Premier for around $90 and the Deluxe version for around $60. The Quicken programs are for those that simply need help establishing and sticking to a budget. Programs in this range are most appropriate if there are a few credit cards, a 401(k) perhaps and the children’s college tuition to consider. There is not such a steep learning curve as the options are not overly detailed. This is precisely the type of program that would be suitable for someone with few financial complexities that is yet still interested in organization and some form of structure with perhaps a goal in mind.

MoneyTree Silver Financial Planner is closer to a mid-range program at about $495. This is just one example but programs around this range can generally handle additional tasks of a more complex nature. Most will offer the popular Monte Carlo simulation which can generate an estimated future path of your saving strategy with potentially negative randoms added in. This is also where the programs can start to become slightly more nuanced and complex requiring more detailed directions as well.

Software programs such as Naviplan and MoneyGuidePro represent the more comprehensive and higher priced end of the scale. MoneyGuidePro costs about $1295 so these programs are certainly only for individuals with quite extensive and complicated financial concerns. Every account is linked, all assets are integrated and a very detailed cash flow analysis is the result. Medicare premiums are considered against long term disability possibilities. Your portfolio’s quarterly changes will automatically adjust your path to attain your financial goals. Inflation will be automatically adjusted. But due to the considerably comprehensive nature of these types of programs by necessity the learning curve will be considerably steep. This however will most likely be worth the organization made from a considerably complex situation. Additionally a program such as this when used effectively can take the place of a costly financial planner in the form of a person.

Depending on the specific needs of the individual and what they feel they require for their finances will ultimately determine what program and what price range would be most suitable. Some with an extremely complicated financial affair might still be inclined to go with a pared down financial program and those with a more simplistic financial environment might still demand the over the top attention to detail abilities of a comprehensive high end program. However this article can provide a general guideline to be used as a starting point in the search.

Purchasing financial planning software depends solely on your needs and therefore some more expensive programs may or may not be the right choice.

Financial planning software is best put to use in a complicated financial environment of pensions, life insurance, social security, annuities, credit card debt, college expenses and so on and so forth. By making sense of a complex interaction of many different financial elements, these programs can be a saving grace.

Organization is only the beginning though. The general strategy for most software programs that deal with financial planning is as follows:

• Setting goals and objectives
• Assessing assets, resources and debts (this is where the organization of finances usually occurs)
• Anticipating future needs and variances in your financial environment
• Determine your risk tolerance
• Organize a strategy based on all the previous input to achieve a specific financial target (whether that target is retirement, college funds, a new car, or just saving money in general)

The first step of setting goals and objectives sets the path for how to achieve them. Once you have that point established then it is possible to begin determining how much you need to save on a daily, weekly, monthly, and yearly basis and how to best utilize your assets and manipulate your debts to achieve that goal. If you simply want to save money and do not have a specific amount in mind that is ok. But remember you have the computing power of a software program designed specifically for this job at your fingertips; set a goal of a million dollars for retirement and see what it tells you. If the path to get there seems impossible, lower the goal until it seems achievable.

Assessing your financial situation is where any financial planning software really starts to shine. This is where the madness can be turned into method and made to work for you. For those that do not have an overly complicated financial environment, you will still be amazed at how convenient it is to see all your expenses and incomes laid out in one place, often in bar graph or pie graph form. For those that have IRAs, CDs, Medicare, social security, etc the benefits of having an organizational utility is obvious.

Part of the organization of almost every financial planning program on the market is to give you a central location from which to view all aspects of your finances. This means integrating your bank account(s), credit card accounts, portfolio, and all others so you can see them all from the financial planning program you are using. This gives you real time values of the current state of all your accounts and will compare them in a way of your choosing. Perhaps you want to see the numbers side by side, or maybe you prefer charts or graphs. Whatever the case you now have control over all that information and can situate it in a way that is most convenient and easily understandable for you.

There is the obvious contention that it might be dangerous to link all the various accounts with regards to identity theft. However, there is no absolute way to prevent identity theft from happening. The emphasis would be better put on discovering and correcting it as soon after it happens as possible. By having all of your accounts linked and accessing that information on a frequent basis, you will be very well appraised on every dollar you interact with and therefore in a much better place to handle any potential identity theft.

One really nice aspect of financial planning software is that, as the name suggests, it plans. Once all of your financial information is contained within the program, you now can manipulate the data in ways not possible without a software program (or at least not nearly as immediate and convenient). Based on your portfolio performance you can adjust your expenditures to stay aligned with your financial goals. So if your portfolio experiences a bad quarter you can see precisely what you need to do to stay on track for your target and in that way never lose sight of your end goal. There are also programs designed to play out scenarios allowing for economic downturns, stock slumps, or other unforeseen circumstances (such as disability). This will help to develop insulation for your plan against future losses.

Based on all the information you have given your software program and taking into account your risk tolerance (i.e. how aggressively or conservatively you intend to do things), you can now develop strategies that best suit your needs. Keep in mind that there is not going to be just one way to achieve your financial goals. Financial Planning programs can be constantly tweaked and updated; that is the whole point. If you have been cutting back extensively on recreational spending but would now like to focus more on tightening other areas of your budget so that you can have more fun, you have all your expenditures laid out for comparison so that you might see what areas can be cut. Some programs will even suggest credit cards with cheaper interest rates or banks with a higher interest rate on savings accounts.

In the financial environment of today where online banking is the norm and most people have a few credit cards and a few children, it only makes sense to have a program to organize all the other programs in a way that makes sense for you.

For those running a home business or a small business, having financial planning software is just as crucial to your success. You will need to have a software product able to help you see what your business is doing and how to obtain your long-term goals.

This type of software often includes features like the following:

• Manage accounts payable and receivable effectively
• Help track expenses and to put business expenses in order of importance, files those that may qualify as a tax write off correctly so that they can be gathered later
• Allows for small business owners to manage profit and loss statements and to know where their business is headed at any minute
• Allows businesses to know where their capital is and to manage their investments appropriately

Some types of business related financial planning software are specific to the industry.  For example, those who are property owners and rental owners are able to purchase rental property financial planning software. This includes lease information, tenant information, financial reports, expense reports per location, deductions monitored throughout the year and even security deposits managed.You will find other types of business planning software available too, geared to many businesses and industries. For those who use them, they are a vital tool to knowing where the business stands at any given time.  It also allows them to manage their investments for long term goals within the business.  For example, to buy an additional property, the software can help monitor savings and profits from the business to help make this possible to accomplish.

Health Care Planning

Financial planning software is also a key component in the health care industry. In fact, this is one of the largest growing types of financial planning software today especially as the baby boom generation gets older.  This type of health care planning allows for the individual to know where his health care expenses are, what they are likely to be and helps them to save enough money to provide them with long term health protection. Since the cost of health insurance and medical expenses continues to grow, it has become increasingly important for people to plan for these costs ahead of time.  This software can help. This type of software may include:

• Monitoring health expenses
• Manage Medicare and supplemental insurance plans easily, including insurance plans
• Manage any tax deduction opportunities
• Prescription management
• Health savings accounts management
• Help knowing who to pay, how much to pay and how much you have paid

Which Is Right For You?

When you consider the sheer number of different financial planning software available, you may become overwhelmed. With so many options available, you should take your time to find the one that provides you with the ultimate features to help you achieve your goal. Often times, you only need to invest in products that give you the features you need, not those you will not use.  This can help you to lower your investment in the software considerably.

Financial planning software is designed to provide you with the rewards you need and the answers you have to have.  From managing the current financial state of your life to managing your financial goals, this type of software is designed to give you answers, information and guidance. Often times, the best feature available is the one that allows for you to know where you stand in all of your financial goals at any given time.

Financial planning software allows you to see the future, if you take the time to use it. Those who invest in this type of software are able to plan out their financial goals. Do you want to save one million by the time you are 40?

Are you hoping to put a cushion on your retirement with a nice two million dollar retirement account? You can accomplish many of your goals when you can see the steps you need to take to reach them. This type of financial software helps you to plan for your future, no matter what goals you set.  It tells you what you need to do to accomplish the goals you have.

Planning Extensively

When it comes to using financial software for planning needs, you have to know what you are planning for and choose a type of software product able to meet those goals. Financially speaking, you do need to keep in mind that each type of software is unique; finding the most appropriate type for you is the best route to positioning yourself for financial success in the long term. There are three many types of financial planning software available to choose from. This includes personal financial planning software, home business planning software and health care planning software, all equally important.

Personal Finance Software

Most types of financial planning software are designed to provide personal finance planning help. This often includes planning software that helps you to meet retirement goals and to help you pay for your child’s college education, for example. No matter what goals you have, large or small, this type of software can help you to accomplish those goals. Personal financial planning software often includes features like:Helping you to manage your financial accounts in one location.

Helping you to manage your bank loans, bank accounts, credit cards, 401K accounts, and brokerage accounts in one location.Allows you to set goals for savings and spending for monthly goals.Helps you to manage every day spending as well as large investment spending like buying a home, investing in the stock market or handling college expenses.Mortgage managementShows you how much you need to invest in various types of investment accounts so you can obtain your financial goals.Personal finance planning software is a key product everyone can benefit from having on their home computer. It positions you to make the right financial decisions for yourself in the short and long term.