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Personal Financial Management – PFM

While personal financial management is often applied to manage your finances, it is also a term frequently known as PFM, which relates to the software related to individual finance apps. PFM first showed up in 1983, when Scott Cook, co-founder of Intuit, got tired of seeing his wife struggling to manage all the paperwork for paying bills by her hands.

He started to search for how to make the process of paying the bills more manageable. At Stanford University, he was about to advertise that he was searching for a programmer when he came across Tom Proulx. At that time, he had programming experience and agreed to work with Cook. 

He started working on the personal finance software program of a simple check-balancing program called Quicken. That was the beginning of Intuit. The company began to work on Quicken, but it turned out to be a crowded area. They were not the only ones attempting to find a solution to the difficulty of managing all the paperwork. When Cook and Proulx launched  Cook and Proulx Quicken, around 50 other personal finance products were already available, but many of them were not easy to use. Quicken had the most significant advantage at that time: its easy usage. The software became broadly available to anyone paying a check because it copied an actual paper check. Its direct marketing approach –Apple version, and sophisticated customer service reviews finally pushed Quicken to succeed.


  • PFM, also known as Personal financial management, describes the software that powers mobile banking and personal finance tools.
  • The software appeared in 1983. It has evolved and grown beyond its original mission to simplify paying bills.
  • As customer needs evolve with their behavior and PFM software started to grow as well.

Understanding PFM

Building software allowed Quicken to satisfy customers by making the paying process straightforward and reliable. This article discusses the idea of being financially responsible. The simplest way to describe this term is to say that you need to start spending only on necessities and spend less than you make if you want to be financially responsible.


Credit and Debit Cards 

If you can not pay your balance at once, it means that you spend more than you can afford. Responsible use of your credit card involves filling the balance each month.

Also, you should use credit cards for convenience instead of emptying the balance. People should use Credit cards only during an emergency.

It would help if you thought that when you are paying interest means that you spend more than you earn. Does that sound reasonable to you? Therefore, you should avoid paying interest.

Exceptions are the cost of personal transportation and housing. In that case, it is difficult to avoid interest, so you should try to reduce your spending each month in such situations.

Many people need to realize the difference between luxuries and necessities and never mix those two concepts. For example, you need to buy a car, but you should think that you need a regular vehicle to meet your needs, not the fanciest one, unless you can pay for it in cash. This logic applies to a place to live. Therefore, you should try to find a place that will be comfortable and reasonably cheap. Using financial terms to explain this idea, we can say that you should spend no more than three times higher than your yearly income.

First Saving

Spending all your earnings is irresponsible. Ideally, people should start thinking about their retirement plan earlier with other necessary savings. Once you get your salary, before paying bills, you should put aside some amount of money – ten percent of your salary.

Investing in stocks

We all know that investing in something, especially in the stock market, involves risk, but sometimes it is necessary to take calculated risks: the best and the most responsible way to do that is to create a plan and follow it. Start by exploring strategies to discover how to make the right decisions.

Investing in stocks
Investing in stocks can be risky, so one should understand risks and possible benefits.


After you start investing, observe your progress toward your goals and try to rebalance your portfolio.

Emergency Fund

Financial responsibility covers the idea of being ready for unexpected events in your life. Financial experts admit that you have to maintain for at least six months without salary.

Budgeting is one of the main principles of financial responsibility. You should have track of your spending. Business people know the value of understanding their balance sheets and cash flows.


Being financially responsible indicates the idea of being able to spend reasonably. You should always keep an eye on your balance sheet and decide what to buy and how much to spend. It would help if you did not allow yourself to spend more than your salary can let you do so.

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