Worried about your finances? Struggling to work out where your money goes each month? In these austere times, one of the most effective ways in which you can save money and give yourself a little more peace at night is to track your spending. Noting every incoming and outgoing allows you to know exactly where you stand at any given moment, and you’d be surprised at how quickly the money you save starts to pile up.

Doing this by hand can be a chore, but thankfully there are tools out there that can automate and simplify the process. And if finances are tight, the first smart decision is to choose a program that’s completely free. Enter, stage left, HomeBank 4.5.

HomeBank is a great tool for those just starting out in personal finance management because it’s not overly complicated – it has all the key features you need to record, track and budget, but it doesn’t overwhelm you in the process. It’s a cross-platform tool, but designed primarily for Windows, so will run best on that platform.

HomeBank 4.5 introduces a new summary graph on the program's main screen.

Once installed, launch HomeBank and select Manage > Accounts to get started. Enter details of each of your accounts – HomeBank can track current and savings accounts, credit cards, assets and liabilities such as loans. That includes entering an opening balance – choose a suitable starting date, which can be in the past.

Once set up, select Manage > Scheduled/Template… to enter details of all recurring transactions, whether it’s salary being paid into your account or regular outgoings such as your rent or mortgage, insurance premiums or utility bills.

Once these are set up, open the Transactions menu to choose how they’re recorded in HomeBank. You can have them paid “automatically” on a particular day by selecting Set Scheduler…, but we’d suggest choosing Process Scheduled… The latter option will automatically process all scheduled transactions for the rest of the month, letting you see how much money is left over.

From here, you then record individual transactions, such as cash withdrawals or one-off transfers between savings and other accounts via the Transactions menu. Alternatively, double-click an account to view its transactions and enter new ones – doing so from here reveals two new options: Inherit, and Create Template. Inherit is a good choice for repeating a previous transaction (select it and click Inherit), while Create Template lets you set up recurring transactions that aren’t regular, such as cash withdrawals.

It’s all very straightforward – the program has a full online help file should you need clarification – and as your finances start to take shape you can view how your spending’s progressing using a variety of reports and graphs. From here you can also set up budgets to rein in your spending and ensure you end each month in the black.

HomeBank 4.5 is a free, open-source download for Windows, with Mac and Linux builds also available. Version 4.5, which was released last month, introduced a portable edition option in the main installer, support for split categories in transactions, a new “Where your money goes” main window report, and new filters for the account window.