Managing money can be pretty challenging, especially for those who take a carefree approach to personal finance. Whether you are saving for a specific goal or just trying to gain more clarity about your finances, using a money management app can simplify your life.
One of the biggest benefits of money management apps is their accessibility—after all, most people have their phone within reach at all times. On the surface, it may seem as if all money management apps are created equal, but they are some very distinct differences. Let’s take a look at the top money management apps and how they function.
Quite possibly the most popular money management app, Mint is a powerful budgeting tool. Mint works by automatically importing transactions from checking accounts, savings accounts, and credit cards, and then categorizing each. This aggregation of data results in a detailed view of your finances.
Users are able to see where the bulk of their money is spent and make adjustments based on the data. Mint also offers free credit score monitoring, the ability to create budgeting categories, and money-saving suggestions based on your transaction history. Mint is a free app available for both iOS and Android phones.
A spin on the popular old school envelope method of saving, Mvelopes presents this concept in a digital version. Mvelopes works by taking your mobile banking and credit card transactions and dividing them as if they were cash.
The goal of Mvelopes is to simplify your budget—you simply set an amount for each category and the app does the rest. Available for both iOS and Android, Mvelopes starts at $4 per month and offers higher-tiered plans that include financial coaching.
Artificial intelligence is combined with human interaction to create Albert, an intuitive financial management app. Connect your bank accounts and Albert will automatically create a personalized budget. Using your income, recurring bills, and general spending habit data, Albert will identify problem areas and show you how to save more. Albert is a free app available on iOS and Android platforms, but the paid version gives users access to real-time chats with financial experts who help with everything from investing to debt reduction.
An acronym for You Need a Budget, YNAB is a powerful budgeting app with the slogan “Give every dollar a job.” The concept behind YNAB is zero-based budgeting, in which you are always planning for expenses that are likely to happen in the future. Rather than being surprised by unexpected car repairs or semi-annual insurance payments, YNAB allows you to set aside money for those expenses well in advance.
This plan-ahead philosophy will save you the stress of an unanticipated expense, as you will likely have enough money to cover it. Unlike previously mentioned apps, YNAB is not free. The app costs $6.99 per month (billed annually at $83.99), though a 30-day free trial is available. YNAB developers indicate that new users will save an average of $200 during their first month, so the app pays for itself.
Is a Budgeting App Right for You?
In a world so driven by technology, it can be tempting to use a budgeting app to put your finances on autopilot. Undoubtedly, money management apps can provide clarity, but they are not a replacement for a hands-on approach to budgeting. These apps deliver an organized picture of where your money is going, but you will still need to put in the effort to make your budget work. With that in mind, it’s a good idea to be aware of the drawbacks of the most popular budgeting apps.
Some cons of popular money management apps include the following:
- Device loss or damage can derail a budget fast. Always be sure to back up your budgeting data in case you need to access it remotely.
- Some features work best when you are engaged. Manual input takes away from the autopilot functionality.
- Data security is a real concern. With so many recent major data breaches, it’s important to choose a budgeting app with high-level encryption to thwart hackers.
- True automation keeps you in the dark. Letting an app do everything can lead to a head-in-the-sand approach that inevitably leads to overspending and/or failure to meet financial goals.
- Cost. Some budgeting apps require monthly or annual fees that can further strain tight budgets.
Is a Budgeting App Right for You?
Choosing a money management app may require some trial and error. Start by downloading one or two free budgeting apps and familiarize yourself with each. Note the app’s features, the accuracy of its syncing, and its ease of use. If the app offers a free trial, try taking advantage of it to gauge the app’s effectiveness. Sticking to your budgeting goals is the first step in getting a handle on your finances, so no matter which app you choose, be proud of yourself for taking a proactive approach.