Personal Finance Management is term which deals with the financial health of a person. Basically, it refers to how you manage your money?
It comprises of saving, budgeting, investing, mortgage, insurance, tax & estate planning, retirement planning and meeting your financial goals which can be short and long term such as a vacation or saving for child’s education.
Most of the people think that their finances are in their grip, and they manage them well. Most people use “Do It Yourself” (DIY) which is not an effective way and for that reason finance management sucks. As the technological advancement took place in financial sector now, we have number of software which help their users to take control of their finances and provide them an autonomous way to manage finances and prepares users to take sound financial decisions.
New age PFMs like Finovac, is an exciting money management app (To be launched soon!) based on open banking which is giving more power to users to handle money more efficiently.
There are number of reasons people should use PFM apps, some of their advantages are listed below-
- Better understanding of Money
Having all finances at one place gives a holistic view of your financial situation. It gives you a broad overview of what type of financial products you may need to buy to fulfil your future goals by analyzing your current financial status.
- Track your incomes & expense
Now days with increasing popularity of mobile payments people tend to spend more. With the ease of Unified Payment Interface (UPI) people are making transactions very seamlessly and because of that their expenses have gone up. Most of them confronting the problem of not able to track which leads to more expenses.
PFMs help in tracking every penny spent and analyze your spending habits & patterns and nudge you when you spend more than your set budget.
- Personalization
There is nothing like one size fits for all in finance space. Every user, his financial requirements & goals are different. Since general advice doesn’t work for everyone.
A good PFM provides custom advice and recommendations based on user’s financial situation which is key for people to take control of their finances.
- Financial content/news
A great way to make users financially literate by sharing relevant content and news with them.
Many apps provide news related to the market which may affects the user’s financial goals and makes them aware of how a particular news can alter their financial situation.
- Analysis of financial behavior
An analysis based on data can reveal much about user’s behavior towards money. Users can use this analysis for their benefit in achieving their goals or they can provide the analysis to a financial expert which can advise for better financial products and services that fits with user’s financial situation.
PFM apps are a great way to make journey seamless towards your financial goals. As the technology is improving, we are seeing better versions of apps. What UPI did to payments another India Stack initiative, Account Aggregator is going to do in money management space. Indian financial sector is poised for another revolution.
For some managing their money is easy as they may not be carrying lot many accounts but for some it can be a hectic job. A good PFM removes this burden and makes money management an easy task by sending low-balance notifications, providing personalized advice, making aware in case of any suspicious activity and helps people to take good data-based decisions and thus, it becomes easy for a person to live a financially healthy life.