When it comes to budgeting software, there are hundreds of different software programs, tons of online budget websites, and even more places that offer free budget spreadsheets. We’ve used quite a few of these programs, and for the one’s we haven’t, we’ve at least done some research to see how effective they may be.
Of course you can easily buy lots of different budget programs, but assuming you want something for free, there is something you should know before you start looking for free budget software – nothing is really free.
What we mean by that is, even though you may not actually pay for the budget software with cash, the maker of the budget software makes some type of money from you. Perhaps you have to sign up for a newsletter to download their software. Or maybe you can only use their budget program online, at which point your information will likely be served with embedded advertising. Even downloaded apps that you run on your computer often have advertising built in. Advertising like this is a way of life, and while it may get in the way sometimes, it really shouldn’t decrease your overall enjoyment of the product. After all, the people that build, create and develop these budget programs need to be rewarded for their work, or they wouldn’t be able to offer such products.
With that said, we’ve come up with three different ways to create a budget using free software or products. Here’s the first way.
Websites That Host Free Budget Software
There are lots of websites out there that you can sign up for free and use their online version of a budget program. Most of these websites allow you to enter in your bank, credit card, mortgage and auto information and then they download the transactions for you. They try to automatically categorize and match your expenses and then allow you to run budget reports, as well as manage your finances using slick graphs and charts.
The most popular site of this type is by far Mint.com. While there are other sites out there, Mint is by far the biggest and most supported product. In fact, I will not even talk about any other products under this category because no other free hosted solutions are nearly this complete.
Mint is free to join and it allows you to download all of your bank and other financial accounts directly into your online budget. However, there are pros and cons to using a service like this. For example, the pros of using an online service is that you can log in to your finances from anywhere, including mobile apps from your phone or tablet, as well as from any type of PC or Mac from any location. Also, the fact that the program downloads all of your information automatically is very nice. If you’ve ever used Quicken to manage your finances then you probably know what I mean. In fact, mint.com is owned by Intuit, the same company that creates Quicken and TurboTax, so the interfaces are somewhat aligned, and if you keep all of your financial transactions up to date in mint.com, you will be able to download and import them directly into TurboTax when tax time arrives. These are all big advantages to using an online budget software. Now to the cons.
There are a few downsides to using software like this. First of all, all of your information is stored by the owner of the website. While this isn’t necessarily a security risk, it makes it extremely difficult to switch programs. For example, if you have spent hours, day or even weeks inputting and classifying your financial transactions at a site like this, you can’t just download all of your information to a new program if you decide to change. Because you become so engrained in one site, you are also at risk of the site starting to charge, or starting to charge for extra services that were previously free.
A second negative of using a free online budget tool is that you don’t have control of how the data is presented. In other words, you can’t customize and organize the data in the exact format that you desire. This isn’t usually an issue with most people, but if you are very particular when it comes to your finances, then it could be a problem.
And the final problem with using these types of websites is that they are time consuming, and often filled with bugs. The time consuming part comes from having to download all of your transactions from multiple sources. Some banks do not offer well formatted downloads and it can cause problems when gathering your information. Also, it is very time consuming to have to classify each transaction that is downloaded into your account. It is also very time consuming to try to get all of the balances from your online budget account to match your real balances. In addition, I’ve read many first hand experiences, and seen it myself, that these online solutions are very buggy. There are just some things they can’t do, so if you have complicated accounts, they may not be for you. And, if for some reason you fall behind by a few months on updating your personal finances in these programs, it will become even more difficult to update the data, because many financial institutions only allow you to automatically update the last 30 days or so worth of data.
So, if the pros outweigh the cons for you, or if you have pretty straightforward finances, this type of site is probably your best bet. Now, let’s take a look at the next type of free budget software – downloaded software.
Free Budget Software Programs that You Download
There are a lot of good budget programs that you can pay for and download, but I haven’t found any great free downloads. That doesn’t mean they don’t exist, it’s just like finding any product online, you do searches and try out the product. Some work good and some are clearly poor products. Then, you go back and do another search and try another product. Then, you can go read reviews about the budget downloads, but most of the reviews are written by people associated with the software. So, like finding any other free product on the web these days, you may have to do a lot of work to locate a good one.
We’ve done some searching, and although we haven’t found any really great products, perhaps the one with the best software and support is Buddi.
Buddi is free software that you download and install to your desktop. It is based on open source software so it can potentially be modified and shared by others too. That means that you may see a few other very similar programs that look the same as this one. The software works on Windows, Mac and Linux because it runs on Java. If you don’t have Java installed, you can easily add it for free. It is already installed on most machines.
What makes Buddi a good program is that it is very simple and made for people that are not all that good at using complex programs. To use this software, or others like it if you find a good one, you simply have to download the software and install it on your computer. From there, you manually type in which accounts you want to track. That means that you can add your checking account and credit card accounts, but skip your stock accounts. In other words, you can track whatever accounts you want. There are no fancy downloads with this software. You manually enter in each expense after you make it. When you enter an expense, you choose the account, the budget category, the amount and date. It's that simple. When you're done entering information, you can go to the reports section and look at a summary of your budget by time period, as well as see pie charts of your expense breakdowns. Overall, it is pretty simple and easy to use, but it does have its pros and cons. The pros of software like this is is easy to use and the information you enter is stored on your PC. Because it's easier to use than the online software programs that download all of your transactions, you don't have to spend extra time recategorizing, breaking apart, and matching your downloaded transactions. The cons of using software like this is that it is not as easily downloaded into other programs, like TurboTax. But then again, you probably aren't looking for a full financial solution if you want a product like this. And while these programs are pretty customizable, they probably can't account for a complicated financial situation, like if you own investment property or manage a small business. So now that we've discussed free online budget software and the kind you download, let's look at the last type of free budget that you can use - budget templates.
Free Budget Templates
There are hundreds of free budget templates that can get you started. The best way to create a budget this way is to download a copy that is freely editable and then start modifying it to meet your needs. As the other software programs we talked about above have pros and cons, so does this type of budget.
First, the pros. Building or modifying a budget spreadsheet is completely customizeable. You can add or delete or modify any rows, budget items or transactions to exactly what you want. Also, all of the information in the spreadsheet is freely accessible by you. That means that if you wanted to copy the information that you’ve worked so hard to collect, it’s as simple as copy and pasting into another source. These are the main advantages of using a budget spreadsheet.
Now for the cons. The main con is that you need to be good with spreadsheet software to take full advantage of this type of budget. You also need to know how to setup a budget properly to make it work. Also, it will be more difficult to make bar charts, pie charts and graphs that depict your progress over time than it would be to make them using another program.
Now that we’ve looked at all three ways to make a free budget, you should closely review the pros and cons of each method and see which one works best for you. And don’t forget that in addition to free budgets, there are also other types of software that you can buy, and there are many other types of budgets that you can create. For example, you could choose to use a simple envelope budget if you really want to keep things simple.
Have any comments about your favorite budget product, let us know below.