Making and committing to a budget can provide some difficulties, especially when you want to stick to a spending plan. Likewise, having a financial goal without a proper budgeting plan might give you a hard time. But, some of these problems can be alleviated by using a budgeting application.
What are Budgeting Applications?
Budgeting apps are software programs that make your plans to stick to a budget easier. They can be accessed through phones, tablets, and computers. These apps include features that can help you create a budget; some can track your income and how much you spend. In addition, budgeting apps can sync with your bank and credit card accounts. A software like this is designed for users who like to keep track of their financial life anywhere.
Things you can do with a budgeting app:
Track your spending– These apps connected to your bank and credit card accounts can automatically show you how much you have spent on a purchase and check other debit transactions.
Payments- Budgeting apps contain a feature that can pay your bills automatically at a given time, and it is pretty similar to bill payment features on your checking or credit card accounts that are being offered.
Notify you with bill due dates- These may contain a feature which can help you track your upcoming or missed bill payments.
Record spending habits- Some include a feature wherein the app can categorize and organize users’ spending history to identify trends so they will be aware of their spending habits.
Meeting financial goals– Apps like these sometimes have saving features. For example, users can set up savings buckets, put the money they have no intention of spending into a savings account and even schedule automatic deposits.
Of course, many budgeting applications are available, making it hard to pick the best one for you. Here are some tips on choosing the most suitable app for you:
Know your must-haves- What specific features are you looking for? List them down to identify the best app that matches all your needs. Next, consider what you want to do with your money. For instance, you want to save up for a house. You may need an application with a tool to help you set saving goals. If you need to pay off your credit card debt, find one that has a debt tracker.
Compare app prices- Although some apps are free, they still have paid features, especially ones that are needed. Analyze and compare how much you would spend in a budgeting app in a month up to a year. No matter how tempting it is to use a free app, paid ones would still be more efficient. If followed religiously, the tools and features you pay for would help a budget plan’s success.
Find out how secure it is- Look for a budgeting app with bank-grade encryption and technology to ensure your financial information is safe and will not fall into the wrong hands. Some apps require a two-factor authentication process to access your account. The tighter the security, the better.
Try a few budgeting apps– Looking for the most suitable app for you can be a long process. Consider trying a few applications to fully know how they work so you can also do a bit of research on each app. Then, download apps until you find the one that best matches all the features you are searching for.
In using applications, they are always advantages and disadvantages. This does not exclude the use of budgeting applications. Before you start using this kind of app, study the benefits you will gain and the drawbacks you might stumble into. What are the pros and cons of using them?
Pros:
Makes the budgeting process easier- Since most budgeting apps sync to your financial accounts, it is not necessary anymore to manually enter your purchases. Instead, your budgeting process would be automated. Plus, you will have a real-time view of where your money is going.
It studies your spending habits- Your spending habits can be recorded and seen in these apps since they are tracked, organized, and put into categories and trends. With this feature, you can quickly know if you’re overspending. They can even help you align your spending with your values and goals.
Offers many tools and analytics– Budgeting apps contain a lot of tools to help you automate your savings goals. For instance, in some apps, you can budget with a partner. Tools also include paying off debt and tracking your net worth.
Cons:
The number of features might be overwhelming– Too many apps can be distracting, mainly when used to a simple budgeting system. It can make it difficult to focus on your primary financial goals. They are not just apps but also investing, bank, and credit card apps.
Additional security risk to worry about- To unlock the budgeting applications’ full potential, you must link your financial accounts to it. However, by doing so, you might risk your information getting hacked.
Is a Budgeting Application Still Necessary?
Many people can properly budget by manually tracking their expenses and savings. Others need the application to keep an eye on their financial life. However, these apps are just there to guide you on reaching your financial goals. Downloading them and purchasing the features would not automatically mean your money would get to where you want it to be.
The key here is to follow a reasonable budget plan that best suits you, with or without a budgeting application. Budgeting is a trial-and-error process and may take some time. If you find it hard to track your money on a spreadsheet manually, install an app or two to help you make your financial life healthy.
There is no guarantee that these apps are a hundred percent effective, you are still the one responsible for making sure that your money is spent and saved wisely. If you find that a budgeting app does not work for you, that’s fine. What’s important is you find a method that best suits your spending and saving lifestyle and stick with it.