In my books and posts, I stress the need for you to have reflective money practices as part of managing your financial affairs. This means you need to understand your cash inflow and outflow such that you know that you are living within your means and are saving and investing for your later years —The Fulfilling Stage of your financial life.
For many people, they make these practices part of their financial lives by using a budget app. Each year, there are over 15 published lists of the best budgeting apps that you can use. In this post, I will summarize the 2020 lists I have read and try to highlight the best apps you should consider using. Remember, in the FinancialVerse the key is to develop and practice good money habits. The consistent use of a budget application can be one of those habits. Here is what I have seen in my reading. Enjoy!
How the Applications are Rated?
Based on which organization is performing the review they may have over 20 attributes of an app that they consider. A sample of items rated include:
Simplicity of use
Cost
Online security
Visual presentation and aids to see your money trends
Integration with your money accounts (e.g., banks, investment, 401(k))
Ability to customize information and reports
I would be remiss if I did not mention that many of these applications are free, while others have an annual subscription cost or a charge for using an upgraded version of the free software. You will have to be the judge if the cost of the application is worth the benefits you receive.
One last comment for you. The FinancialVerse does not receive any compensation from the applications mentioned in this post.
The 7 Most Mentioned Apps
Here are the seven most mentioned applications that you should consider:
Mint has been one of the top-rated budgeting tools for some time. It automatically updates and categorizes transactions, creating a picture of spending in real-time. Users can add their own categories, track bills, split transactions and set budgets that alert them when they’re exceeding their maximum spending threshold. The service also provides free credit scores and credit score monitoring.
The application is from Intuit — the company behind QuickBooks and TurboTax — and is described as an effective all-in-one resource for creating a budget, tracking your spending, and getting smart about your money. You can connect all your bank and credit card accounts, as well as all your monthly bills so all your finances are in one convenient place.
You Need a Budget (YNAB) – Subscription Needed
You Need a Budget is a hands-on app that helps users learn to live on last month’s income. It costs $84 a year or $11.99 a month (after a 34-day free trial), that can be cancelled at any time. It’s based on the zero-based budgeting approach, which we have discussed in an earlier post. You can connect bank accounts, set goals, contribute to savings and customize spending categories. You can also access resources, like app user guides, budgeting advice and free workshops.
YNAB looks to help you stop living paycheck to paycheck, pay down debt and plan for the unexpected. It's built around a fairly simple principle: Every dollar has a job in your personal budget, be it for investing, for debt repayment or to cover living expenses. In its advertising it states that the average user saves $600 their first two months and $6,000 in the first year of fully using the app.
EveryDollar – Free and Subscription Available
EveryDollar is from the Dave Ramsey’s organization. The software is described as being simpler to use and a good option for those who are new to budgeting. It is free for the base version and costs $129.99 a year for the Plus version.
It’s also tailored for zero-based budgeting. It was designed to help users take back control of their monthly budget, EveryDollar makes it easy to track transactions, gain deeper insight into regular expenses and plan for big purchases.
PocketGuard - Free
PocketGuard boils budgeting down to the only thing many users want to know how much they have for spending. It crunches the numbers to show how much money is available after accounting for bills, spending and savings goal contributions. All users can view how much money is left “in my pocket” for the day, week or month. Those who want to dial down farther can track certain categories of spending — like groceries, clothing or eating out.
PocketGuard allows you to sync all your personal finance accounts in one place, from your bank accounts and credit cards to your loans, savings and investments. It will build your budget automatically based on your spending and earning patterns and it tracks your income, bills and recurring subscriptions.
The PocketGuard app will also create spending limits for you, give you insights into what you spend by offering transactions categorized into "pockets" and there is even a "Lower your Bills" feature that is designed to give you an overview of the bills you could be paying less for without you leaving the app.
Clarity Money - Free
Clarity Money is a comprehensive budgeting and saving app that is part of Marcus, the Goldman Sachs financial services brand. Users can link financial accounts from thousands of institutions, organize expenses, track spending and bucket their spending into different categories. There are other features, too, like subscription canceling, recurring expense analysis and credit score monitoring, which provide a more inclusive financial picture beyond just transactions.
Goodbudget – Free and Subscription
Goodbudget is based on the envelope system budgeting approach, in which you portion out your monthly income toward specific spending categories. It is a digital version of the system, helping users create envelopes for monthly and future spending categories like Christmas shopping or family vacations. The app allows multiple devices to access the same account, so partners and family members can share a budget.
Unlike the other apps I mention in this post, Goodbudget doesn’t have you sync bank accounts. You manually add account balances (that you can pull from your bank’s website), as well as cash amounts and debts. The free version allows one account, two devices and limited envelopes. The Plus version, which is $7 per month or $60 annually, offers unlimited envelopes and accounts, up to five devices and other perks.
Personal Capital - Free
Personal Capital is an investment management service that combines the algorithms used by robo-advisors with access to human financial advisors. While it is mainly an investment tool, its free app includes features helpful for tracking spending. You can connect and monitor checking, savings and credit card accounts, retirement accounts and loans. The app provides a spending snapshot by listing recent transactions by category. You can customize those categories and see the percentage of total monthly spending that category represents. Personal Capital also serves up a net worth tracker and portfolio breakdown.
This software is said to be especially effective because it provides your entire financial picture in one glance. Too many times we focus on just our income, our daily spending, or our debt. Personal Capital sews it all together, displaying budget strengths and weaknesses alongside each other while also providing snapshots of your net worth (and your projected net worth) through their investment trackers.
New Entrant – Money in Excel – Subscription
Money in Excel was launched by Microsoft in June. According to the product announcement — “Money in Excel is a dynamic, smart template and add-in for Excel that allows you to securely connect your bank, credit card, investment, and loan accounts to Excel and automatically import your transaction and account information into an Excel spreadsheet”. If you’re a current Microsoft 365 Personal or Family subscriber Money is available to you free of an additional charge. For non-subscribers there is the monthly cost for a Microsoft 365 Personal or Family subscription.
Summary
Remember, as I have written personal finance is just that – personal – so choosing a budget application is a personal choice. Look at what is available and pick one that best suits your needs and planned usage.
Budgeting apps can help you save money and get a better handle on your finances. These tools can help you keep track of where every dollar is going, they can also show where there’s room to save and cut back on expenses each month. These are good financial habits we should all develop.
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