How far ahead do you look?

[buildmybudget]

One of my biggest pet peeves with personal finance software is the inability to look very far into the future. At least, when I was using MSN Money it was mostly pointless to try and look beyond one or two months to see where I would be financially. A new product that banks are starting to offer, called Finance Works, is a phenomenal product but once again does not let users see past two months into the future. For me, this is a deal breaker because I'm adamant about seeing at least 6-12 months into the future, and the impact of my financial decisions.

Is two months enough for you? How far out do you want to be able to see?

[sammythesm]

Ever tried a crystal ball?

I've always found that cash flow projections (even in ms money) are never very accurate indicators of future growth.

[zetta]

Looks like the OP is just using the post to advertise the budgeting software he sells -- see the signature line.

[buildmybudget]

That is not the case zetta, although true that could be a potential motive. I am honestly curious how many individuals look at their personal finance software and say to themselves, "Where am I going to be in six months, this software won't tell me."

And Sammy, I believe you missed the point altogether. Being able to project your personal cash flow and determine how to use the gap between your income and expenses is key to building a solid financial future. Let me know how your crystal ball works out for you.

[am_vanquish]

That is not the case zetta, although true that could be a potential motive. I am honestly curious how many individuals look at their personal finance software and say to themselves, "Where am I going to be in six months, this software won't tell me."

And Sammy, I believe you missed the point altogether. Being able to project your personal cash flow and determine how to use the gap between your income and expenses is key to building a solid financial future. Let me know how your crystal ball works out for you.

Excel can do anything .... ANYTHING!

[disneysteve]

OP, I'm not understanding the issue here. What is it that you are trying to project in the future? There are tons of online calculators that can be used to calculate growth of savings over time, loan repayment over time, etc. What figures are you trying to calculate that MSN Money won't do beyond 2 months?

[buildmybudget]

Quite simply, it comes down to how we achieve financial goals.

For example, the tuition in my MBA program is $6200 a semester and I just lost my tuition reimbursement from my company(which was only $5k to begin with). This means that my wife and I have approximately 4 months to save $6.5k, which in turn means we must identify how much we need to save from each pay period. Without going too nuts with the whole thing, careful forecasting and cash management is the reason we are able to achieve this quarterly goal along with our other goals.

I would ask someone with the same kind of goal(ie: saving for a big vacation), if you have to save a minimum of $400 each month for the next 8 months in order to afford the dream vacation you have been planning and your car breaks down in the 2nd month costing you $900 dollars.... How are you going to achieve your goal if you can't easily see what you can change about your goal to make up for that $900 shortfall?

It comes down to flexibility, if I can't see how the decisions I make today affect me in long term, I might make the wrong decision. Projections are what empower an individual to make good decisions.

[kork13]

Excel can do anything .... ANYTHING!

Honestly, I have to agree... while in certain applications, excel can be unwieldy and complicated, you really can do alot with it.

I do all of my account planning/money projections (normally just 30 days out) in excel -- along with my budget, expense tracking, long-term planning, and many other functions. However, if/when I need to, it's very simple for me to extend my month-to-month projections to cover whatever time frame I need, whether 3 months or 3 years.

[Seeker]

It comes down to flexibility, if I can't see how the decisions I make today affect me in long term, I might make the wrong decision. Projections are what empower an individual to make good decisions.

Actually, you're asking for Artificial Intelligence in a program.

That's the difference between humans and programming; humans are flexible, programs are not.

You can do anything with flexibility, but it's a choice you make to be flexible to handle those "changes" that occur with life.

You cannot ask a logical 1+1 = 2 computer program to be "flexible" by itself. You however, have a choice to input and project with your own made up numbers, any way you like into the future.

[wavetide]

Excel can do anything .... ANYTHING!

Famous last words.

[LivingAlmostLarge]

Excel works for me, projecting how much I need to save and stuff.

[Seeker]

I think any program will "project" into the future with static numbers. But the OP is asking for something to make a change based on an "event" that changes projections.

No program can "automatically" do that... and if it were to do so, I'm pretty sure that I would not trust it's recommendations to apply for me. My priorities would probably differ from other people's priorities.

Finance has always and will always be a personal conglomerate (for those of us married ) of decisions. There's always going to be ideas and recommendations based on personal events. How to handle these events is up to us as individuals.

How do we "evaluate" a stock? And project it's future? If anyone or any program could do so with a high degree of certainty, they could make a fortune.

We as humans must "plan" to the best of our ability.... there's "no progam" available that can project 1/2 year into the future with any kind of certainty.

The economy constantly changes, and industries within that economy also change. Projections must be constantly adjusted. Even businesses have a difficult time with "projections."

Excel, MS Money, and all the rest of them, can compute numbers based on static premises.

But, IF we put in the time and effort, to monitor and constantly adjust these numbers, we can accomplish more with our decision-making ability in the short-term, than any program or operation that is not constantly adjusted.

[Radiance]

I have actually learned to appreciate the value of plans while being flexible enough... life happens
I look at 3 months, 1 year and 5 years from now. Then I jump to my last couple of years on earth trying to imagine how would I like them to be and what do I need to get there
This way I ensure I am swimming in the right direction.

I use xpenser for the shorter term, I build the next 60 days budget.
For projections, I use gool old excel for now.

But my finances are simple, my salary, my expenses, I have no investments or a business to track.

I think a software that allows playing with what-if scenarios would be most beneficial.

[am_vanquish]

I think any program will "project" into the future with static numbers. But the OP is asking for something to make a change based on an "event" that changes projections.

No program can "automatically" do that... and if it were to do so, I'm pretty sure that I would not trust it's recommendations to apply for me. My priorities would probably differ from other people's priorities.

Finance has always and will always be a personal conglomerate (for those of us married ) of decisions. There's always going to be ideas and recommendations based on personal events. How to handle these events is up to us as individuals.

How do we "evaluate" a stock? And project it's future? If anyone or any program could do so with a high degree of certainty, they could make a fortune.

We as humans must "plan" to the best of our ability.... there's "no progam" available that can project 1/2 year into the future with any kind of certainty.

The economy constantly changes, and industries within that economy also change. Projections must be constantly adjusted. Even businesses have a difficult time with "projections."

Excel, MS Money, and all the rest of them, can compute numbers based on static premises.

But, IF we put in the time and effort, to monitor and constantly adjust these numbers, we can accomplish more with our decision-making ability in the short-term, than any program or operation that is not constantly adjusted.

Depending on how tech-savvy you are, you can add in as much "flexibility" as you want. Will it be perfect? No ... you're right that nothing will. However, it can provide helpful information in making large financial decisions.

The spreadsheet that I use to project our finances (which projects from our current age of 22 all the way until retirement) has several "flexibility functions" built into it. For instance, I have set up breakpoints, which can be changed from 3 months all the way up to 5 years. At each breakpoint I can change our salary estimates, contribution rates, and rate of return assumptions. I can also over-ride entire account balances & let formulas project them forward (representing the impact of depleting our emergency fund to put an extra 5-10% downpayment on a house).

I also have it set up to project 5 scenarios under different interest rate assumptions covering 3 account categories: retirement savings, taxable account/market savings, and EF savings. Will it perfectly project my retirement account for 40 years? No ... but it will give me a good idea of how my decisions now will affect my retirement under different scenarios.

Even more beauty of the flexibility of Excel? I can create new tabs for separate financial decisions and link them to other exhibits or my overall summary to get a "big-picture" view. Great example was a recent decision of how much we could contribute to the Employee Stock Program. I could change one contribution rate and instantly see the impact on (1) our monthly budget; (2) our xmas present savings account in 3 months; (3) our house downpayment fund in 3-5 years; (4) our retirement account in 20 years. That time I used 3 different rate of return scenarios to see how each would be impacted (lose 5% annually, break even, gain 5% annually). What more flexibility do you want????

[Caoineag]

Another Excel fan here. I tend to go out about a year at a time right now because things are changing too fast for any longer projecitons to be remotely accurate. Once things are more settled I will probably go out 5 years.