Being aware of your expenses can help you plan your budget accordingly and identify areas in your finances that can be improved. However, although monitoring your expenses is necessary to keep your finances on track, it is time-consuming. To make this process easier, a budget tracker app can help you.
Why You Need to Track Your Expenses
The main reason why you should track your expenses is to see where your money goes. It also helps in making sure that you are using your money wisely.
Furthermore, tracking expenditures allows you to understand your spending habits and issues. When you know why you’re short on cash and how you got there, you can make a strategy of how to get out of debt. You can also get an insight into how you should manage your money better.
What Does a Budgeting Tracker App Do?
Budgeting is tedious, but a budgeting tracker can make it hassle-free and more efficient.
A budget tracker can help you stick to your budget. Once you have set the budget for the week or month, you will see if you go beyond it and then limit your spending if it happens.
A budget app is also an easy way to review your financial record. It helps you achieve your financial goals. Whether you are building your retirement fund or planning for a vacation, a budget tracker can help you by monitoring your expenses.
Here are some other ways on how an app can help you track your finances effectively.
- Real-Time Update
It can be overwhelming to manage everything from your credit cards to your receipts. This is where a budget tracker makes a difference. With a budget tracker, you get to access your financial information in real-time. You see the information you need from various accounts on a dashboard, and you get an idea of the overall flow of your money.
- Monitors Progress
Many trackers can keep records for a long period of time. That’s why they can help you monitor progress with regard to your financial goals. Some trackers also allow you to set a financial goal for a specific project, such as a vacation, or home deposit and an amount to deposit monthly. They will then give you an update every time money is deposited.
- Prevents Mistakes
Financial mistakes can be costly, but a budget tracker can help reduce this risk. You can set alarms on your due dates to avoid penalties and increased interest rates. Any error can be traced easily with a budget tracker.
Tips When Using Budgeting Apps
- Think long-term.
The result of using a budgeting app may take some time before you can see it. But budgeting is always about the future. So when you think nothing is happening with your budgeting, imagine the long-term result. As you follow through with a tracker, you’ll cut down on overspending. Eventually, you’ll develop good money habits, and good habits lead to better finances.
- Compare pros and cons.
When looking for the best app that fits your lifestyle, make sure to do your research and compare the pros and cons of each tool. A mismatch can cause more harm than good.
- Know your needs.
Each budgeting app has its pros and cons. One way to find the best tool for you is to know what you want. This will filter out apps that do not meet your expectations or needs. Also, choosing what is the best for you will depend on your lifestyle and needs.
In general, budgeting apps are effective when you have the right motivation and approach to them. Nevertheless, they could fail to work in the following situations:
- There’s no accountability or poor commitment.
Although the app helps you monitor expenses and plan your budget, there is no real penalty when you fail to follow or comply with the plan. A budgeting app is only a guide. The success of using it will still depend on your commitment to be accountable for your finances.
- There’s a budget mismatch.
When you are using an app that doesn’t fit your style, your effort in keeping everything in order can be difficult and eventually fail. The mismatch can even create more frustrations.
The Best Budgeting Tracker Apps in 2021
Best overall free app: Mint
One of the best budget apps available in the market, Mint allows you to monitor not only your expenses and budget but also your investment accounts. Intuit developed Mint. This means that the app can be integrated with another app under the same company, such as Turbotax and other finance applications. As a result, you can also use Mint to check your account for taxes, saving you the time to input the details manually. Also, Mint is a free app; it requires no monthly payment.
Best app for serious budgeters: You Need a Budget (YNAB)
This popular app uses four basic principles in helping you manage your money: do not live paycheck to paycheck, prepare for an emergency fund, assign every dollar a job and roll with punches.
You can track your finances with YNAB by linking it to your accounts. It then gives you a report of your spending and budget plan. This budget tracker provides graphs and charts that can help you understand better, but it is not free. You’ll need to purchase it through a monthly or yearly plan.
Best app for over-spenders: PocketGuard
To help you manage your finances, PocketGuard syncs with your credit and bank accounts. You can then view all of your accounts in one place, and your actual income and latest transactions are automatically updated.
Additionally, this budget tracker can help you avoid overspending. It tracks your expenses, financial goals and income to tell you how much you can spend daily. It also has a safety feature and can send a reminder about your daily spending.
Best app for investors: Personal Capital
A tracker designed for investors, Personal Capital is a good option to keep up with your investments. If you are looking at portfolio and asset management, Personal Capital is one of the best Robo-advisors for investments. You can also do financial planning for free. However, to use the app, you need to have at least $100,000 as a starting investment.
Personal Capital can be used in two ways. Firstly, you can avail of the free financial planning at which it will gather data from your accounts. The app gives you suggestions as to how to increase growth based on the data. Secondly, you can use Personal Capital for asset management, but it requires a considerable amount of money to start.
Best app for savings: Money Manager
The Money Manager app combines money and psychology to help you stick to the budget you set. This app will ask you to tighten your money belt on a smaller weekly allowance to cover regular spending, with a monthly fun allowance to relieve the pressure and enjoy yourself more. It also recommends having a separate transaction account for bills, and separate savings for future, for your holidays and more. What’s unique about this app is that it can give you a tailored solution to stick to your budget, based on your spending habits and current financial situation.
How Much Do Budgeting Apps Cost?
The cost of a budget tracker differs from one app to another. But free apps like Mint are also available online. If you opt for the paid ones, you can choose between monthly or yearly payments.
YNAB app costs $84 per year, but it offers a free trial for 34 days. It also has a 100% risk-free, money-back guarantee policy. For Pocket Guard, you can either get it for free or avail of its paid version, which costs $34.99 for a year. The investment app Personal Capital is an excellent wealth-building app that is free, but certain services charge fees. The Money Manager app has limited functionality for free, or costs $25/month for the full version.
Should You Get a Budgeting App?
If you are serious about managing your finances, getting a budget tracker is a sound decision. It’s a good option that can help you develop healthy spending habits. Although getting used to the right app may take some time, it can help you meet your financial objectives easier.