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What Is a Budget App?

DEFINITION 

A budget app is a software tool that lets you construct a budget and, in many situations, manage your income and expenditures. Some even include additional capabilities to assist you pay off debt, manage your net worth, monitor your credit score, and automate your savings objectives.

Key Takeaways

A budget app is a software tool that helps you monitor your income and expenditures.

Most budget applications function by connecting to all your bank accounts, then automatically importing and sorting purchases for you.

A decent budgeting tool should be straightforward to use and offer you an accurate picture of how much money you have available for spending each month.

There are many of budget applications out there, so test a couple of them out until you discover the best one for you.

Definition and Examples of a Budget App

A budget app is a software program that syncs to your financial accounts and collects all your data in one location at one time, so you always know how much money you’re making and spending. Most budget applications may be readily utilized on your phone, tablet, or computer.

  • Alternate name: Budgeting app

A prominent free budget program is Mint by Intuit. It features built-in tools to help you meet your objectives, manage your spending, and monitor subscriptions.

You Need a Budget (YNAB) is a popular paid budget app. It’s based on the zero-based budgeting system, which mandates that your spending and what you make balances out to $0; every dollar is accounted for.

How Does a Budget App Work?

Most budgeting programs enable you to link all your bank accounts, credit cards, investment accounts, and loans so you can view your whole financial picture in one location. This is a major benefit over monitoring your expenditure manually, which may be time-consuming and incorrect.

Budget applications are proactive instead than reactive, too. You don’t merely predict how much money you believe you’ll spend this month, then analyze your progress on the 31st and complain about how you spent considerably more than you should’ve. Instead, a budget software lets you remain on top of your expenditures on a daily basis. As a consequence, you may make constant modifications as the days and weeks go by.

For example, Mint refreshes your associated accounts and transactions everytime you log in, and it organizes your transactions into categories. Through the app, you can see how much you’ve spent in each area compared to your budget for that category.

Note
Most budgeting applications also provide features like as bill reminders, goal setting, and net worth monitoring so you can see how you’re performing over time. If you find yourself in a bad financial position, a budget software may help you figure out how to cut down on spending and improve your income.

How To Find the Best Budget App

There’s an infinite sea of inexpensive applications out there. Here’s how to choose the best budget app for you.

Identify Your Must-Have Features

Almost all budget applications integrate with your bank accounts to import and categorize transactions. But what additional things are you searching for? List which ones matter most to you, so you can choose a budget app that meets your requirements.

If you’re seeking to pay off credit card debt, you may want an app with a built-in debt tracker. If you’re hoping to retire early, you may want an app that records your assets and net worth. If you’re saving for a down payment on a home, you may want a program that checks your credit score and helps you create savings goals.

Compare Prices

Budget applications might cost anything from $0 a month to $14.99 a month or more.1 Mint. "What Is Mint, and How Does It Work?" Accessed Jan. 20, 2022.

Some also offer “freemium” versions where the core program is free, but you pay a price for premium functionality

It may be tempting to merely seek for a free budget software, but don’t underestimate the potential of a premium version. The features and tools you may obtain access to might be the trigger for the organization and efficiency you desire to accomplish with your budget.

For example, as of January 2022, YNAB costs $14.99 a month or $98.99 a year. This pricing may sound costly, but the software boasts saving new users $600 on average within two months of usage and $6,000 in the first year.

Pocketguard, another prominent software, includes a debt payment planning function that’s exclusively accessible to premium subscribers.

Double-Check Security

The finest budget apps employ bank-grade encryption and technology to keep your data secure. They may also utilize two-factor authentication to access your account. These are all important security measures to look for, since they assist guarantee your account information doesn’t fall in the wrong hands.

Check Customer Support Options

It takes time to learn a new app. As you go through this learning phase, excellent customer service and active user groups are vital for having your questions addressed fast.

Give a Few Budget Apps a Try

At the end of the day, you’re never going to completely know whether a budget app is perfect for you until you give it a try. After conducting your study, download a couple that pique your curiosity and discover which one best fits you and your objectives.

Pros and Cons of a Budget App

Pros
  • Comes ready to use
  • Automates the budgeting process
  • Analyzes your expenditure habits
  • Comes with several tools and analytics

Cons

  • Can cost money
  • Some inexpensive applications have high learning curves
  • May have limited customizing options

Pros Explained

Comes ready to use: In most situations, all you have to do is establish an account, enter in your information, and get started. There are no formulae or reports to set up like there are with standard budget spreadsheets. Everything’s done for you.

Automates the budgeting process: Most budget applications link to your bank accounts, so you don’t have to manually input purchases yourself. The program brings them into your budget as they clear your account, so you get a real-time picture of where your money is going.

Analyzes your spending patterns: Budget applications provide you information about your spending habits by categorizing them into categories and trends. Armed with this knowledge, you may more quickly determine where you’re overpaying, and how you can bring your spending back into sync with your values and objectives.

Comes with several tools and analytics: Budget apps are jam-packed with capabilities to help you automate your savings goals, budget with a spouse, pay off debt, manage your net worth, and more. This data may be a great tool in helping you safeguard your money.

Cons Explained

Can cost money: Typically, the more features a budget software offers, the more you’ll pay for it. Some budget applications are fully free, some include free and paid versions, while others demand monthly or yearly subscriptions.

Some inexpensive applications have steep learning curves: One significant advantage of budgeting apps is that they’re ready-to-use platforms. However, this convenience might backfire if it takes you a long to find out how the software works.

May have limited customizing options: Some budget applications are more customisable than others. You may discover that some applications don’t enable the amount of personalization you need to feel in control of your money.

Budget App vs. Budget Spreadsheet

Budget App Budget Spreadsheet
Can cost money Free to use
Connects to all your financial accounts, then automatically imports and categorizes purchases for you Must manually enter and categorize purchases
Takes very little time to get started because budget formulas and reports are built into the app Must be made from scratch. You have to set up the formulas and create the spreadsheet categories yourself—unless you download a template.
Can have a steep learning curve if you’re unfamiliar with the software Almost no learning curve; just open up a spreadsheet app and get started.

There's a decent amount of disagreement regarding which choice is better: budget applications or budget spreadsheets. The reality is, both are fantastic possibilities, but only you can determine which is best for you.

A budget app links to your bank and financial accounts. There may be a learning curve at initially. The biggest advantage is that it records and monitors your spending for you, so you don’t have to manually keep up with purchases yourself.

A budget spreadsheet is something you build yourself in Excel or Google Sheets. You may be able to locate some templates online to assist you establish the structure for your budget, but you’ll personally handle all the inputting and monitoring.
Note
Tiller Money is a mix of a budget software and spreadsheet budget. It works in Google Sheets or Excel, but it has the extra bonus of synchronizing to all your bank accounts.

Do I Really Need a Budget App?

Not necessarily. Some folks get by just fine monitoring their expenditures in a classic spreadsheet or even using pen and paper. The idea is to discover a technique that works for you.

Don’t be startled if it takes some trial and error to discover the proper budgeting strategy. You may start with a spreadsheet, then decide it’s too much manual effort. You may test out a budgeting software or two before you discover one that matches your lifestyle—and that’s good. The idea is to select a budgeting program you’ll really use, then stay with it.

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