These days most of us are more aware of the need to track our income and expenditure. Bookkeeping is something that most of us will associate with businesses, but it is also something that can benefit personal money management. A good way to do this is to have a cashbook. There is something that anyone can learn to use and it can be very beneficial when it comes to managing personal finance.
So What is a Cashbook?
In its simplest form a cashbook is a hard cover notebook that contains a number of blank columns. You will find this type of note book on sale in any stationary shop and they are quite cheap to buy. It is up to the individual how much information they wish to have in this book, but the different columns allow for the recording of different information. The most usual way of doing things is to have a date, an amount of money which is either expenditure or income, a description of where they money is coming from or going to, and a running balance of cash. It is possible to use the columns for much more information and a lot will depend on how closely you wish to monitor your money.
As well as the traditional paper cashbook it is also possible to find computer software that can do the exact same function. Some people will use a program like Excel to record this type of information, but there are also specially created cashbook programs. Some of this software allows for advanced functions which really gives you a clear picture of your income and expenditure. If you like graphs and diagrams then these computer programs can be the ideal way to keep an eye on your personal finances. Some people also find it easier to record this type of information on the computer; although there are others who still prefer the paper method. These software programs are not only good for personal finance but will work well for the individual who is trying to manage the finances of their small business.
The Benefits of a Cashbook
A cashbook can be a great asset for the individual or small business owner. The reason why a lot of people fall into trouble with their personal finances is that they haven’t been keeping a close eye on things. The mere fact of recording income and expenditure ensures that we always know what is going on with our money. We can also get to see patterns and find it easier to plan for future outgoings. People tend to be a lot more careful with their money when they are keeping records. It is harder to justify unnecessary expenses when it is there in black and white or on the computer screen.
A cashbook is a simple way for people to keep an eye on their finances. This type of accounting is simple to learn and easy to maintain. Once people get into the habit they will just do it automatically and reap the rewards.