Managing household finances is seldom fun. Does anyone actually enjoy monitoring every dollar spent? Fortunately, there’s now a slew of budgeting apps that reduce this drudgery. Bottom Line Personal reached out to Karen Bennett, Bankrate’s senior consumer banking reporter, to explain what today’s budgeting apps can do so you can determine which one might be the best personal budget app for you.
Why budget apps are useful
A good budget contains not just constraints on spending but also goals, such as vacations and/or college savings. In the past, budgeting meant serious work. Example: If you were determined to limit dining out to $200 per month, you would have had to keep track of every dollar spent in restaurants…and if you were trying to track savings goals, you would have partitioned off your savings account or opened separate accounts for each goal.
Today’s budgeting apps do all of that for you. You establish spending categories and goals…link the app to your credit and debit cards…and every time money is spent, the app automatically puts that expense in the right category, keeping track of expenditures and progress toward goals.
Some budget apps alert you when your spending in a certain category approaches a pre-set limit. Some provide helpful charts, graphs and visual indicators to show progress and spending. Others offer extra tools such as credit monitoring and subscription tracking. And some give tips for moving money between categories and increasing savings.
Are budget apps expensive?
There are a few models for pricing budgeting apps. The most basic versions are free but come with ads or require in-app purchases and offer less automation. Next are basic versions lacking some bells and whistles. The most expensive are the premium versions, which typically cost between $6 and $15 monthly. Best: Some budget apps offer annual billing, but it’s smart to start out paying monthly to make sure you like the app before committing to the yearly plan. Most offer free trials.
Best budget apps to consider now
YNAB (You Need a Budget)
This enormously popular budget app features a clean, simple interface. It uses the “zero-based” budgeting method, in which every dollar of income is assigned to a category such as transportation, groceries, utilities or fun. Color-coded lines and bars diminish as you spend. YNAB is flexible enough to let you move money between categories as you see fit. It offers a 34-day free trial…$14.99 per month on the monthly plan…$109 per year for the annual plan. YNAB.com
Goodbudget
Some people prefer the “envelope” method of budgeting (also called “cash stuffing”). On payday, you put physical money into envelopes with labels such as “Rent” or “Piano Lessons.” Goodbudget leverages this budgeting style. Its free version gives you 20 virtual envelopes and tracks your budgeting history for a year. Paying $10 per month or $80 annually gets you unlimited envelopes and tracks your history for seven years. Goodbudget.com
Honeydue
For couples, having just one partner managing the budget can be a source of conflict. Honeydue is designed specifically for couples to share the duty. Both partners can log into the app, which is linked to both partners’ bank and credit card accounts (Those who don’t want their accounts visible to their partners can choose to keep them hidden). As with other budgeting apps, spending is categorized and tracked. Honeydue even features an in-app chat so that you can communicate with your partner (“Looks like we’re about to hit our spending limit, so let’s stay in this weekend.”). The app is free but asks for optional monthly tips to help support its development. Honeydue.com
Rocket Money
This budgeting app stands out for its extra features. With subscription tracking, you can monitor all your monthly subscriptions in one place. Premium members can cancel subscriptions with just one tap in the app. Depending on the version you select, Rocket Money also can track your net worth, monitor your credit score and even negotiate your bills for you. Its price ranges from free for a stripped-down version to about $12 a month for the premium version, which comes with a free seven-day trial. RocketMoney.com
Your own bank’s app
Before you spend money on a special budgeting app, look around on your own bank’s app. Today, many automatically categorize expenditures for you. If that’s all that’s important to you, you may already have what you need.
Also look for the app’s data practices. If an app doesn’t prominently share its data practices—what the company does with its users’ data—don’t use it. This information should appear in the app’s privacy policy. The privacy policy should provide a list of user information that the app collects (name, address, etc.) and how/with whom the information is shared (such as with third parties, affiliates, etc.). Once you’ve chosen an app, use good personal-security hygiene such as two-factor authentication and strong, unique passwords…and only use the app in secure environments.
