Our reliance on mobile phones has opened the door to a whole new way of tracking our money. Budgeting your spending is easier than ever before with a range of useful free and paid tools now on the market.
A budgeting app is a digital tool that is designed to help users track their incomes & expenses, meet their monetary obligations and create a corpus for themselves through focused savings.
Types of budgeting apps
When it comes to budgeting apps, it’s important to know that there is no one-size-fits-all solution. There are different types of budgeting apps available for different requirements, such as:
- Overspending: They help you actively track your expenses against your monthly income and alert you when you’re going over your monetary limit.
- Intermittent budgeting: These apps are for the user who wants to just keep an eye on his finances, but there’s no express purpose for the app.
- Savings generation: These are budgeting apps that are geared towards people who are exclusively focused on building a nest egg for themselves through conscious and focused savings.
- Expense categorization & budget allocation: Here, the focus is on splitting your finances into different categories and ensuring that your incomes are proportionately divided and allocated in the most efficient way.
- Investing: Finally, there are apps which deal exclusively with stocks and shares. They actively track the performance of your investments and provide forecasts about expected performance. These apps are simplified versions of Robo-advisors.
Banking with your budgeting app – should you or shouldn’t you?
Apart from the above-mentioned features, some budgeting apps allow you to link your app to your bank account. Once you deposit or withdraw cash from your checking account or your investment dividends are paid-out, your budgeting app is updated about your financial standing. So, when you want to make a purchase, you can easily check your app to know the status of your bank account, evaluate the various expenses you are yet to pay-up and then make a decision. In this way, budgeting apps act like real-time bank statements.
Sure, this seems like a great thing at first sight. But does that mean you should link a third party budgeting app to your bank account? No.
&Solved warns that if you dig a little deeper and you’ll find that budgeting apps pose certain risks when clubbed/synced with bank accounts. These risks include:
- Apps which may be fake and give phishers access to your bank account details.
- Untrustworthy third-party app vendors who may share your account details with someone else.
- Lower security protocols compared to banking apps, which can put your finances at risk.
The list of risks goes on.
As best practice, it’s recommended that you use your budgeting app only as an income-expense tracking device and not a substitute for a banking app.
With a fast application process, personalised interest rates and borrowing limits, &Solved provides highly flexible, affordable and sustainable financing solutions that will help you save money in the long run.
Choosing between free & paid apps
Okay now comes the next question – should your budgeting app be a paid app or a free one?
Free budgeting apps allow users to input their financial data, track their incomes and expenses and get a surface-level view about their spending habits. But paid budgeting apps give users a host of additional features.
For example, paid apps give detailed reports about the spending habits of the user. You’ll know exactly what you did, when, why and how it has affected your future financial prospects. Paid apps also give you a forecast about the expected expenses, incomes and your ability to pay-back your expenses over the next few months; if you continue with your current financial behaviors.
These reports & forecasts are supremely helpful in giving you an in-depth view about what’s going wrong (or right, as the case may be) with your budgeting & savings plan. You can use this information to become much better at managing your money.
So, if you can afford it, choose a paid app.
Top features to look for when selecting a budgeting app
So now you’ve come to the stage of selecting a budgeting app. But what are the key features you need to look for in a budgeting app, before you buy it?
Your financial information is extremely sensitive and phishers can wreak havoc if they get access to your information. This is why high-security is a must. Select an app that offers two-factor authentication or additional password protection options.
- Simplistic interface
It doesn’t matter how useful your budgeting app is if it’s too difficult to use. Look for an app that is compatible with all types of devices, has easy-to-access tabs and links and is generally easy-to-use.
- Robust customer support
You never know when you may need help when using the app. Choose a budgeting app that is supported by a team of trained and professional customer support team. Some apps have a 24/7 global customer service feature, which makes it super-convenient to use the app wherever you go.
- The right income & expense categories
Some budgeting apps have very limited categories for incomes and expenses. Many don’t even consider irregular expenses like home refurbishment or car purchase or hospital bills. This is counterproductive to your goal of managing your finances. So, look for an app that has multiple categories of expenses and incomes. This will give you a better picture of your finances.
It’s important to remember that your financial goals will evolve with time, as your priorities change. So choose budgeting apps that have the option to review goals at regular intervals. Use this feature to tweak your goals and get the most out of your app.