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When it comes to saving money, the best way to do so is to create a budget and stick to it, but tracking what you spend can be time-consuming. While a lot of personal finance experts suggest you carry a notebook around and write down everything you spend money on, who has the time?
Rather then painstakingly logging everything you buy, use an expense tracker app. These expense tracker apps connect with your credit cards and bank accounts and download your transactions. Most automatically categorize your transactions according to the budget that you have set up within the app. You can then quickly and easily log in to the app and see how much you’ve spent in each budget category for the month so far.
Some expense tracking apps also allow you to set personal goals like saving $250 in a month, while other apps make suggestions about the optimal balance of your budget – like how much you should be spending on housing costs or food. Tracking your budget in this way allows you to see where you might unconsciously be overspending and motivates you to rein in your spending. These apps will help you to keep yourself accountable to your personal finance goals.
There are a number of different types of expense tracking apps and it’s important to find the one that works best for you. Here is a rundown of the pros and cons of the top four expense tracking apps.
Connects to Bank
$50 per year
Perhaps the most well-known budgeting app is Mint, which is owned by Intuit, the company which makes TurboTax and Quicken. One of the benefits of the Mint app is that it’s free and it’s available on iPhone and iPad iOS, Android, Windows Phone, and Amazon. It’s also incredibly easy to use either via mobile or on the web, which makes it perfect for those who are just starting to track their budget.
Users link their accounts to Mint and can easily track a wide variety of information such as their spending, their account balances, the performance of their investment portfolio, their credit score, and even their home value – which is provided through a partnership with Zillow.
When you first sign up for the Mint app, it automatically creates a budget for you based on how much you spent in the past and creates budget categories like coffee shops, rent, or groceries. You can edit this budget in order to customize how much you want to spend in those categories in the future or to change the categories.
Mint can also send you weekly notification emails telling you things like how much you’ve spent so far and it has a number of tools that allow you to track your spending trends or investment performance in easy and accessible ways. It also sends you alerts if you exceed your budget, spend too much on ATM fees, or if a bill is coming due soon.
One of the things that people don’t like about the Mint app is that the automation is frustrating at times. The app often automatically categorizes transactions in the wrong categories making it time-consuming to fix later on. The good news is that if you do change the category, the app remembers the right category the next time.
Another downside is that it tends to only show you top level information and makes it difficult for you to drill down into the numbers in order to get a better idea of your spending. For those who are more experienced at budgeting, or who want to have a clear idea of where their money is going, this might be frustrating and you might prefer a different type of app.
You Need a Budget (YNAB)
Similar to Mint, YNAB links easily with your online accounts and has a great online and mobile interface. Unlike Mint, YNAB cost $5 a month, but they have a free trial for those who want to see what the program offers. YNAB has mobile apps for Android and iPhone and iPad iOS devices.
YNAB requires you to actively create budget categories when you first sign up rather than automatically slotting your spending into budget categories. This can be good because it gives you time to think about what you want to be spending your money on, rather than just what you have spent your money on in the past. YNAB also encourages you to budget for savings and allows you to track detailed transaction histories.
One unique benefit of YNAB is that it provides educational material to help you when you are experiencing financial problems or issues like if you overspend your budget. These materials provide tips to avoid such situations in the future.
While YNAB is a good platform, many personal finance apps don’t charge anything and so the fact that YNAB charges $5 a month might make some people less likely to choose this option. YNAB also tends to be more hands-on than other apps and while that’s something that could help users become better at budgeting, it does take more time and might make people less likely to stick to it.
Level Money is an app that tries to be good at just one thing. It wants to help you track the money that you’re able to spend after you paid for all your fixed expenses and set aside money for savings. The app is free on both iPhone and iPad iOS and Android devices and targeted towards millennials.
To get set up, you tell the app how much you make each month, how much you spend on your essential bills, and how much you want to put aside for savings. The app then shows you how much you can spend on a daily, weekly, and monthly basis. It also lets you know how many days are left in the month so that you can see how long your available money needs to last.
One thing that people like about the app is that it is built in order to accommodate those who are self-employed or who freelance. It’s able to categorize irregular income to help users manage their cash flow.
You can set it up to send you notifications like how much you have to spend on a weekend or whether you’re overspending or underspending during the week. You can also set up a notification that gives you a summary of what you spent the previous day, when your bank charges you a fee, or when you have just 25% of your budget for the month left.
Level Money easily allows you to deal with joint accounts if you share an account with a spouse. You can ignore certain transactions so that you get a picture of only your spending.
One of the downside of the app is that some users find that they have to manually tag and input transactions because the app doesn’t detect all income or bills. Also, because it doesn’t deal with investment accounts, it’s not a complete picture of your finances.
Goodbudget is an app with a different philosophy towards budgeting than most other expense tracking apps. It uses what’s known as the envelope system. In the past, people who had trouble sticking to their budgets were told by some personal finance experts to take cash out and put it into specific envelopes and then spend that money until the envelope was empty. Each month they could fill that envelope again with cash.
This method helped a number of people since it allowed them to see how much they had in any particular category encourage and not to overspend. But the challenge of the envelope method is that many people dislike having to use cash. Goodbudget allows you to create digital envelopes and spend down the money in them using your credit cards and bank account rather than cash.
One of the benefits of Goodbudget is that it allows you to use either android or iPhone and iPad iOS devices or the web and you can share your budget information with people who your budgeting with like your spouse. This is a big benefit since many other expense tracking apps make it difficult to share information for those who budget together.
There are two versions of the app: a paid version and a free version. The free version gives you just 10 envelopes and allows you to use the app on only two devices. The paid version allows you to create unlimited envelopes and access it using five devices. The paid version costs just $5 per month or $45 per year which is similar in price to YNAB.
One of the downsides of Goodbudget is that it is more hands-on. It is not as automated as Mint and encourages you to actively choose how much to put in your envelopes every month. For those who like the envelope system, this can make sticking to a budget easier since you’re more conscious of how much money you have to spend at any time. But for those who don’t want to be spending a lot of time thinking about their finances, Goodbudget might not be the ideal app for them. Also, the fact that it charges a monthly fee is a big downside.
Author: Jeff Gitlen