Money management can feel overwhelming to most people. Although the mere thought of it may seem tedious, there are ways to make it much more manageable.
With the help of many apps available these days, you can manage your finances, regardless of your financial status. Not only are they easy to use, but you can also easily install them on your smartphone and use it anywhere you go. Every mobile application has unique features and strategies that can help its users to manage and save money.
Using a personal expense tracker app can help make financial management a lot easier over time. To help you understand better, here are a few of its benefits.
How a savings app can help you with your finances
In-sync information access
Opening a bank account can be quickly done these days, but keeping a track of it isn’t that convenient. There are even times when you’d need to track each of them using different apps so you can get an idea of your financial health.
Without a personal expense tracker app, checking your balances will require you to check various websites to view your accounts. Doing some transactions may also ask you to open multiple apps. Having one installed on your smart device can help you pull the information you need from different accounts using a single platform. You can even get real-time balance information on all your investment and bank accounts with a single click of a button.
Thanks to modern technology, budgeting apps have become so user-friendly that they’ve become a go-to for almost every financial wealth enthusiast. Aside from their design, these apps also give you instant access to your financial information that you can use for both your personal and business transactions.
These financial apps also provide their users with many features that can support financial transparency. In addition to the asset management option, some even have an option for filing for a value-added tax return. These activities are essential when it comes to organising both your business and personal finances.
Better financial decisions
It’s normal for a person to worry about managing finances. Some may hesitate to make any financial decisions too. But with a budgeting app, you’ll be more confident when it comes to making any choices that concern your money. Furthermore, you’ll feel that you’re always making the right decisions about your personal and business growth. You are also freeing yourself from the stress that comes with monitoring your finances.
Achieves more financial goals
Each person has unique financial goals that they want to accomplish, and a personal expense tracker app is a great way to achieve them. If you want to monitor your progress easily, choosing the best budgeting app can help you with it. When using such an app, you’ll have a better idea of how the entire financial management works and how you can achieve your goals.
One feature that most apps these days have is a monthly email reminder that helps you focus on your daily personal finance decisions that’ll undoubtedly affect your finances.
Better financial decisions
Everyone learns from mistakes. However, it’s pretty different when it comes to one’s finances. One wrong financial decision can be costly. That’s why it’s best to learn how to avoid it.
When using a personal expense tracker app, you’ll know how to manage your money in the best way possible. It helps you avoid paying more later, which could put you in a more severe financial problem. Also, using an app allows you to check for any errors with your banking transactions, saving you some money in the long run.
Best practices to track your expenses
Review your bank statements
When working on your finances, the first thing you need to do is determine your spending habits. You can do it by checking your bank account statements, including your credit cards and your transaction account. You can look at the charges that you have for the account, especially your monthly subscription services and the items you commonly purchase.
From there, you can start identifying the items or services that you mostly spend your money on each month. Getting an idea about your monthly cash flow is an effective way to get a sense of all the money coming in and out of your bank statement.
Start grouping your monthly fees
Another way to help you manage your expenses is by putting them in different categories. There are a few credit cards that automatically tag your purchases in categories like health or automotive. With this, you can quickly know which ones cost you the most. It can also help you realise the recurring subscription services that you don’t need.
Remember that your monthly spending consists of monthly fees and variable expenses. These monthly fees rarely change each month, which often includes rent, insurance and debt fees. Meanwhile, variable costs consist of food, trip expenses and clothing.
Create a separate spending account
Creating a separate spending account is another efficient way to manage your expenses. You can have dedicated transaction accounts where you pay all your bills, including life insurance and utilities. You can also contribute a specific amount each month that you use for fun spending. Doing so will help you manage all your essentials without overspending. You can also consider making a separate account for holidays
Form a spreadsheet
A spreadsheet instead of a personal expense tracker app can help you with managing your spending too. You can keep a spreadsheet that contains all your bills. Then plot out your expenses in advance to help you keep your finances in check. Afterwards, you can run a tally of your credit balance so that you’ll know if there are any overcharges.
Having this kind of spreadsheet is an effective way to ensure that all your bills get paid on time. However they can be time consuming to maintain and keep importing transactions. Formulas get accidentally overwritten and the calculations stop working.
Use the envelope method
The envelope method almost works like a spending account. Nevertheless, instead of putting your money in your bank account, you use several envelopes to categorise your expenses.
For instance, if you feel that you’re spending too much on cabs, you can use the envelope method and get in cabs when moving around. Then, once your envelope is empty, you’d need to take the bus or the train to commute.
Identify areas for improvement
As you try to figure out your finances, you need to prepare to make further adjustments. It may be difficult at first, but you’ll eventually find it easier to tackle any challenges associated with your adjustments as soon as they arise.
Tracking your expenses is a crucial aspect that’ll help you determine what’s genuinely costing you. It’ll also help you prioritise the more essential things in life, like your mortgage, car loan and utilities.
You can install various apps on your smartphone to simplify expense tracking. Most of them allow you to track your spending in multiple bank accounts, credit cards and investment accounts. These apps also let you allocate a particular amount to spend each month. They make financial management easier.
Depending on the features you want to use, a personal expense tracker app may cost a lot more than the others. Fortunately, Golden Eggs do offer a free version. So, you’ll get to try them out before and upgrade to a more premium account with more features, or even upgrade to a personalised money coach, if you would like some more assistance with managing your personal expenses.
Best expense tracker app to use
Golden Eggs provide an excellent personal expense tracker app. The Golden Eggs Money Manager merges money and psychology to help you stay on your budget. This app asks you to write down your goals, then allocate a smaller weekly allowance to cover regular spending, with a monthly fun allowance to relieve the pressure and enjoy yourself more. The Golden Eggs Money Manager also recommends having a separate transaction account for your bills and different savings accounts for your future and holidays.
Creating a personal budget
A household budget summarises all your transactions, comparing and tracking your income and expenses for a particular period. Whilst most people often associate budgeting with restricted spending, an adequate budget doesn’t have to be restrictive for it to work.
A budget lets you see the amount of money you’d expect to have left after comparing it to your required expenses. However, instead of looking at it negatively, you can view it as a tool that can help you achieve your financial goals.
Making a budget in 6 easy steps
Gather all statements
Your financial statements should include your bank statements, latest utility bills and investment accounts. You should also collect your credit card bills and your mortgage statements. Gathering all these documents will help you gauge your income and expenses.
Calculate your income
Calculate how much income you’d expect to receive each month. If you’re receiving a regular paycheck where taxes automatically get deducted, then using the net income should be enough. Meanwhile, if you’re self-employed or have alternative sources of income, you may want to include the total income instead.
Create a list
List down all your expenses in a month, fortnight, or week. Include your car payments, insurance and travel. You can also add entertainment, personal care and eating out expenses. Your groceries, insurance, transportation costs and savings must also be on the list. To check your spending for the past three months, you can use your bank statements and credit card statements.
Determine your fixed and variable expenses
Fixed expenses refer to those mandatory fees that you pay for a particular time. They primarily include items such as car payments, internet service and mortgages or rent. Variable expenses refer to spending that varies each month – groceries, gifts and entertainment. If you’re using your credit card to pay for your bills and other expenses, you need to include the amount so that you can keep track of it each month. Doing so will help you monitor your transactions to make a rough estimate of your budget, but getting rid of the credit card will help you stick to it.
Get the sum of your expenses and income
Those with higher salaries compared to their expenses are off to an ideal start. That’s because they have extra money that they can use to fund their budget’s categories, such as debt repayment and savings. But if you notice that you’re spending more than what you earn, then it’s about time that you tweak your spending habits so that you won’t go over your limits.
Change your spending habits
If you’re overspending, it’s best to find areas in your expenses that you can either remove or adjust. For instance, you can withdraw some of your streaming services subscriptions or consider eating out less. This will create an equal balance between your expenses and your income.
The bottom line
The primary challenge with financial management is finding a way to measure expenses against the budget. Monitoring spending ensures that you’re on the right track to reaching your goal. Tracking your finances also gives you a clearer picture of your spending habits and how your money flows. It gives you an idea of your overall financial health.
Do you want a money management app that’s tailored to your current financial situation? We, at Golden Eggs, can help you create a setup that works for you. Contact us today.