It helps to know some arithmetic when doing your accounts.

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To plan for your future, you have to know where you stand today. Assuming you know the basics of money, this establishes your footing. But you still need to control your finances.

When evolving a plan for your finances, you might choose either to adjust your income to the life style of your dreams, or adjust your life style to your expected financial status. Either way, it makes sense to balance income and expenditures.

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A budget is an itemized summary of estimated expenditures for a given period along with proposals for financing them. You try to match expenses with income. Spend more than your share, you exceed your budget. Spend less, you have savings. That's all there is to it. The time scale could be any period, but it's commonly measured in months.

The project could be long-term, like the rest of your life. In that case it's safe to say the task is difficult, because many factors have to be considered. You might have to deal with:

• Expenses for education.
• Cost of setting up a small business.
• Employee salaries.
• Medical payments.
• Payments for health insurance.
• Regular household expenses.
• The cost of parties and holidays.
• Income taxes.
• Mortgage payments or rent.
• Car payments.
• Payments for "that cottage by the lake."
• Investments in stocks and bonds, or the like.
• Payments into an IRA or 401k retirement plan.

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There's a lot of software out there for personal and business applications.

This software handles financial chores like balancing your checking, savings, and credit card accounts. Examples are:

• Quicken, from Intuit, Inc.
• Microsoft Money, from Microsoft Corp. 

Microsoft Money also lets you create reports, and Quicken includes the facility for online banking.

If you have a very small business with simple or nonexistent inventory management needs, One-Write Plus is a possible option for you.

For startup and small businesses with modest accounting needs, you might consider Peachtree First Accounting. Also, Best!Wares offers MYOB Accounting.

Budgeting and spreadsheet software for the small-shop operator includes, among others, Microsoft's Excel spreadsheet program or its more inclusive Office, which also provides the word processor, Word, and the presentation software, Powerpoint.

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Besides planning skills and knowledge of self, you have to know some arithmetic. Even if you apply software that does most of the calculating, you still must know your numbers and be able to understand what operations the software is performing: computing percentages, simple interest, and compound interest. And you must know how to add and subtract, multiply and divide.

Simple interest, for instance, is the percentage return on money loaned out by a lender. And compound interest is the same interest except it also applies to interest gains (that haven't been spent).

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