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Which budgeting app should you use? Here are the pros and cons of some of the best.
There are a lot of apps and tools ready to teach you how to manage money — but which are the best? Some credit card companies have started offering credit card management apps; should you use those, or stick to one of the well-known money apps like Mint or YNAB?
Ultimately, the best budget app is the one that meets your individual needs, whether you’re looking to pay down debt or save up for a down payment. However, it’s worth learning about these services’ pros and cons before you decide which money management app to install. We’ve put together a list of some of the top personal finance apps, how they work and whether you should consider them as potential tools to help you balance your budget.
Mint is often included in “best personal finance app” lists, and for good reason — its simple, easy-to-use interface helps people keep track of where their money is going and how much they have left to spend.
Mint, like many money management apps, connects directly to your bank accounts, as well as your credit card accounts, investment accounts and loan accounts. Once your accounts are connected, Mint automatically collects and categorizes new transactions in order to give you a clear picture of your spending. It also tracks your credit score, and you can even add upcoming bills and get reminders when they come due — that way, you won’t accidentally miss a credit card payment and see your credit score drop.
However, you can’t just set-it-and-forget-it with Mint; you’ll need to make a budget, in order to see whether you are over- or underspending in any given category, and you’ll also need to double-check Mint’s work. I’ve used Mint in the past, and its auto-categorization system isn’t 100% accurate; once it categorized a dental appointment as a daycare bill, possibly because the dental office was called “Smile Center.”
Mint is an excellent and easy way to track your expenses and compare your monthly budget to your actual spending. Mint is not as good at showing you what happens if you overspend; you can sign up to receive notifications when you spend more than you budgeted in a given category, but Mint doesn’t explain how that overspending might affect you in the long-term. If you set your budget with good intentions and then end up spending $5 extra on restaurants or $50 extra on clothing every single month, you might want an app that forces you to reconcile that spending against future purchases — otherwise, you could end the month without enough cash to pay the electric bill.
Simple is both a bank account and a budgeting app — and its goal is to make your finances as simple as possible.
Once you open your FDIC-insured bank account and receive your Simple Visa® debit card, Simple will begin subtracting your recurring and scheduled expenses (rent, car payment, Netflix subscription, etc.) from your current balance. The money left over is considered Safe-to-Spend®, and it represents the money you can spend while still having enough left over to pay your bills. As you buy lattes or movie tickets or cover those unexpected expenses that always come up, Simple will automatically update your Safe-to-Spend amount.
Simple also lets you set spending goals, such as “go on vacation” or “save up for a down payment.” Once a goal is set, Simple removes a daily savings target from your available Safe-to-Spend number. That way, you won’t have to postpone your vacation just because you saw a pair of shoes you really liked. You can also use Simple’s goal-tracking system as a way to save for common expenses that don’t always show up as recurring monthly bills, such as birthday gifts or charitable giving.
Although Simple is easy to use and its Safe-to-Spend feature is a useful budgeting tool, some people might not want to transfer all of their money into a Simple bank account. If you’re already happy with your bank, or if you and your spouse have multiple accounts with multiple banks, brokerages and other financial services, Simple might not be the best option for you. Simple is best for people whose finances are, well… simple. If your biggest financial goal is to know whether you can go out for dinner tonight and still have enough cash left over to cover your rent, Simple could be exactly what you need.
YNAB is what you might call an “advanced” money management app — but it delivers. According to YNAB, the average new user saves $600 in their first month of using the app and over $6,000 in the first year. To achieve those results, you need to follow the YNAB system, which involves giving every dollar a job, saving for both your immediate and your true expenses and balancing every penny you overspend.
When you set up your YNAB account, you create budget categories not only for your day-to-day bills and expenses, but also for any expenses you may likely have in the future. If you think you might need to replace your laptop in the next three years, for example, YNAB wants you to set aside $42 each month for “new laptop.” When the three years are up, you’ll have the $1,500 you need for that new MacBook. YNAB also wants you to set budgeting categories for clothing, gifts, car repairs, and other variable or occasional expenses — which YNAB calls your “true expenses” — and start saving for them right now.
Once you have your budget set up, you need to give every dollar a job. Yes, even the dollars in your savings accounts. Like Mint, YNAB lets you automatically connect your bank and brokerage accounts; unlike Mint, YNAB wants you to assign every dollar to a potential expense, either now or in the future.
Why? Because YNAB understands that we’re saving for something. If you already have $5,000 saved a for down payment, set up a “down payment” budget category and assign $5,000 to it — and then set aside a little more money for your down payment every month. If you have an emergency fund set up in case you lose your job, start assigning those dollars to future grocery bills and car payments and see how many months your emergency fund really covers.
The last part of the process involves reconciling your actual spending with your budget. Unlike other money management apps, YNAB forces you to cover overspending in one category with available dollars in other category. In other words: if you spend $5 extra on dining out, you have to decide whether to take that $5 out of your clothing budget, your vacation budget or the budget for that laptop you think you’ll need in three years. This is one of the reasons why people who use YNAB reduce their spending by an average of $600 in the first month — the app doesn’t let you overspend.
Although YNAB describes itself as “simple,” many new users aren’t fully comfortable with the program until they’ve taken one of YNAB’s many free tutorials. YNAB is also fairly labor-intensive; every transaction needs to be confirmed, cleared and categorized, and I often check my YNAB app multiple times a day to keep the transactions up-to-date and balance any over- or underspending.
YNAB is also the only tool on this list that isn’t free. A subscription runs at $83.99 per year, so you’ll need to set aside $6.99 per month in your YNAB budget to cover the cost.
Finn by Chase
Like Simple, Finn is both a money management app and a bank account. Sign up for a Finn checking and savings account through Chase, get the accompanying Finn Visa® debit card, and start using the app to track your spending, save for the future and learn which purchases are most aligned with your core values.
The “core value” theory is extremely popular in personal finance right now, and here’s how it works: as you become more attuned to which purchases bring you happiness and fulfillment (and which purchases bring you discomfort or resentment) you’ll be more likely to cut back on certain areas of your spending so you can put more money towards your core values. Maybe you’ll spend less money grabbing mediocre sandwiches on your lunch breaks, for example, and put that income towards a once-in-a-lifetime meal or a donation to your favorite charity or a trip to visit your family.
Finn invites you to rate each purchase based on the emotions it makes you feel, and then analyzes which types of purchases bring you the most happiness. Finn also has an autosave program that helps you bring your spending even more in line with your core values; every time you pay for parking, for example, Finn might set aside $5 for a future vacation. That way, even the purchases that don’t make you happy can help fund the ones that do.
Like Simple, Finn is best for people who can manage their finances through a single checking account, savings account and debit card. Chase credit card users can also manage their credit card accounts within Finn. If your finances are more complex than that, Finn might not be the right app for you.
My Money Map
Wells Fargo’s My Money Map has fewer frills than the other apps on this list — in fact, it isn’t so much an app as a feature that you can access with your Wells Fargo online account. However, if you’re looking to track your spending, create a budget and set up savings goals, My Money Map has got you covered. Wells Fargo credit cardholders get free access to My Money Map.
My Money App includes three major components:
- My Spending Report, which tracks your spending and offers interactive charts to help you understand where your money is going
- Budget Watch, which helps you create an online budget and monitor monthly expenses
- My Savings Plan®, which helps you create a savings plan and set up automatic transfers into your savings account
Users also get access to a selection of resources and tools to help them plan their financial future.
Although My Money Map might be a good tool for some Wells Fargo account holders, other people might want a money management app that’s a little more robust. Mint, for example, offers most of the tools that My Money Map includes (except the ability to set up auto-transfers into savings) and comes with additional features such as a credit score tracker, the ability to add and monitor additional bank accounts and the ability to track progress on loan payments.
Bank of America Mobile Banking
Most banks and credit card companies offer some kind of mobile banking app to help you track your deposits, withdrawals, payments and charges — but Bank of America’s mobile banking app takes this to the next level, turning what could otherwise be a standard banking app into a fully-fledged personal finance tool.
When you sign up with Bank of America’s mobile banking app, you get access to Erica, a virtual finance assistant that can help you check your FICO score, deposit checks or send money to friends and family via Zelle®. You can also ask Erica to pull up your most recent transactions or tell you how much money is available in your checking account. Bank of America credit card users get free access as a perk of membership.
If you aren’t a fan of using virtual assistants, you can check all of that information and more through your account dashboard — it includes your FICO score, your account balance, any potential fraud alerts and the ability to send money through Zelle. Your dashboard also shows you any Bank of America rewards you may have earned and makes it easy to redeem them.
The one tool the Bank of America app doesn’t offer? A budget. If you’re hoping to set some limits on your spending or create some savings goals, you’ll have to download another one of the top money management apps instead.
These aren’t the only budgeting apps out there, of course — but this list is a good way to help you start thinking about what you want out of a money management app and whether any of these apps are right for you. You can even download a few different apps to your phone, test them out, and choose the one you like best. Once you find an app you love, remember to keep checking in with it and using what you learn to improve your finances, whether you want to save for a big trip, see if you can afford to go out to dinner or bring your spending more in line with your values.
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