A budgeting app is an application that can sync your financial accounts and culminate all of your data into one place. This way, you can always know how much money you’re earning and spending at any one time. By using budgeting apps properly and carefully, you may be able to avoid needing to take out loans and, if you do need to borrow money in any form, you could find yourself having to borrow less as a result of better budgeting.
These apps can easily be used on your phone, tablet, or computer, and can allow you to connect your bank accounts, credit cards, investment accounts, as well as any loans, to give you a complete picture of your financial well-being. If you find retaining a good grip on all your finances difficult, or you simply find it confusing to gain an understanding of your financial state, a budgeting app may be a valuable addition to your life.
Why are Budgeting Apps Useful?
Besides being able to collate all of your financial data in one place, there are other benefits to budgeting apps. For example, some such apps have advanced features which can help you to pay off your debt, monitor your net worth, automate your savings goals and monitor your credit score, helping you avoid falling into bad credit.
Therefore, not only can budgeting apps allow you to view your finances and track your spending, but they can help you in monitoring and amending any harmful spending habits. Primarily, these apps also allow you to create a spending budget, something that could be very helpful if you are new to budgeting, trying to save up or looking for ways to automate your finances.
Budgeting apps are useful as they are proactive rather than reactive; this means that as opposed to simply reviewing your spending at the end of the month, these apps can actually help you to stay on top of your spending on a day-to-day basis to ensure that you can make any necessary adjustments daily.
Budgeting apps can, therefore, offer a huge advantage to their users by being able to track their finances electronically, as tracking such things manually can be confusing, hugely time-consuming, and may even cause damaging inaccuracies.
What Are The Disadvantages of Budgeting Apps?
There are also some disadvantages of budgeting apps that you ought to consider before setting yourself up with one. Whilst you can use these apps free of charge, it may be a diluted version of the application and it is likely you will not be able to use all the tools the app has to offer.
Therefore, whilst you sign up for a budgeting app to help you save money, you will need to pay a variable fee to use the app to its full effect. This may be especially difficult when you first sign up and are still battling with the learning curve of the app.
Depending on which app you choose (or can afford), there may also be limited customization options. Therefore, it is incredibly important that you choose an app that has the tools that suit your needs for the most suitable price for you.
How to Find the Best Budgeting App for You?
If you do decide to opt for a budgeting app, there are some important things to consider before making your decision on which to settle for. You should also remember, that if you have already borrowed money and find yourself in trouble, these apps may not necessarily help you as they are designed to help you get your finances on track before you get in trouble. For example, if you have a $500 loan outstanding, the benefits of utilizing budgeting apps will be limited as you are already in debt you may have otherwise been able to avoid.
Budgeting apps have become increasingly popular over the years, and as a result, there is a multitude to choose from. Therefore, it is important to compare prices before you decide. These apps can cost anywhere from $0 to $14.99 a month or more. Of course, there are some ‘freemium’ versions where the basic app is free, but you will still need to pay a fee for premium tools.
If you are serious about controlling your finances and sticking to a budget, do not underestimate the value of a paid version of the app. This may be the catalyst for the organization and efficiency you need to sort out your finances.
For example, as of January 2022, You Need a Budget (YNAB) charged users $14.99 a month, which amounted to $98.99 a year, but the app manages to save new customers an average of $600 within the first two months and $6,000 in the first year. This example demonstrates how the fee of the budgeting app may well be worth paying if your goal is save substantial amounts of cash.
It would be best to search for an app with the most reliable security features. The most secure apps will use bank-grade encryption and technology to keep your data safe. A two-factor authentication may also be used to safely access your account.
Your Must-Have Features
You should make sure to pick an app that suits your needs best. For example, if your priority is to pay off any credit card debt that you may have, you may wish to opt for an app with a built-in debt tracker. If you are planning to apply for a mortgage loan (which requires a good credit score) or even medical bill loans, you may want a tool that tracks your credit score to aid you in the process.
Check Customer Support
Starting to use a budgeting app may be a daunting new way of handling your finances, and it may a confusing view to see all of your money in the same place. Therefore, it would be best to check for good customer support when selecting your budgeting app.
What Budgeting App Options are Available to You?
Due to the range of budgeting apps available to you, here is an easy run-down of some of the most highly rated budgeting apps available in the US.
In 2013, YNAB was the most popular personal finance software among Lifehacker readers, and in 2021 it was also listed by Wirecutter as a “great pick for hard-core budgeters”. YNAB is also currently rated third by Forbes Advisor, ranking beneath Personal Capital in first and Mint in second.
Therefore, if you are unsure which budgeting app to choose, and are simply looking for one which is generally well-rated and all-around effective, you may consider one of these three. Whilst Personal Capital offers several tools designed to help build retirement savings and emergency funds, Mint’s standout features include customizable budgets and alerts for your spending.
As Mint immediately categorizes all of your purchases, the app also creates a personalized insight into your spending habits to help you spend smarter.
If you are looking for a budgeting app that can specifically help you to pay off debt, Pocketguard comes fourth on the Forbes list. It offers a debt payoff planning feature that’s available to paying customers, so if getting rid of any debt is your priority, this app may be for you. Another excellent feature of the Pocketguard is that, by linking your recurring bills, it can help you negotiate better rates on your bills such as your cable bill or cellphone.
Some other top-rated budgeting apps that you may wish to consider are:
- Goodbudget – great for managing a shared household budget as you can sync the budget with more than one person
- Honeydue – aims to help couples have better communication and transparency about their finances by allowing users to chat inside the app
- Fudget – contains an ultrasimple design if you would prefer a straightforward, calculator-esque interface over fancy features
- Digit – calculates an appropriate amount to deposit in either your savings account or a retirement account each day
- Stash – makes it possible for everyone (even with just a few dollars) to start through what is called fractional shares, or portions of a single share of stock