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Experian’s recent study on American consumer debt reflects this sad reality.
According to the latest data this credit bureau gathered, about 80% of Americans are in debt, with an average personal debt of $90,000. Regarding debt growth, millennials lead with a 58% increase in average debt from $49,722 in 2015 to $78,396 in 2019.
Considering that this age group comprises professionals who have just started their careers, it is quite alarming to see how much work it takes to ensure young adults keep their finances under control.
If you think budgeting is something to be taken for granted, then you are very wrong.
Mismanaging your finances can lead to piled-up debt in the later stages of your life. It may hinder you from finally going for that one investment that could allow you to retire early.
Budgeting is an important life skill that could determine your finances and future.
To start, let me introduce you to your modern life-savers budget apps! Thanks to technology, tons of downloadable applications will now help monitor your spending and, hopefully, save.
What Are Budgeting Apps?
Budgeting apps come in different interfaces and sizes developed to function basically as expense trackers.
New apps are available with cool, unique features such as bill tracking, budget appropriation, spending goal setting, budget adjustment, and others looking at the available downloadable applications.
The bottom line is, budgeting apps help you organize your money and allow you to spend and save effectively.
Some even allow you to make investments besides the savings funds they help you create and maintain.
What makes budgeting apps even handier is that they can be easily downloaded and accessed through various devices.
This type of convenience beats traditional spreadsheets and allows one to stay away from complicated paper files and tedious envelope budgeting methods.
With these apps, you can check financial reports, and record cash-ins and out.
What to Expect From Budgeting Apps?
True, budgeting is as simple as tracking expenses.
However, suppose you ruminate about it.
In that case, it is also a complex process that involves determining payables, setting priorities, allotting portions, and devising a personal financial plan that will allow you to live within your means and still have enough money left for savings and investments.
Budgeting apps will help you achieve this. However, like any other digital tool, budgeting apps require human intervention.
You will need to spend time and effort to configure settings to put your budgeting app to optimum use.
Considering making budgeting apps part of your journey to financial freedom, take time to learn more and know what to expect.
Familiarize yourself with it, get to know the app’s features, and learn how to best use it with the lifestyle you have. Everything takes a little, or a lot of, effort to be used effectively.
Are Budgeting Apps Safe?
Budgeting apps do not differ from other mobile applications.
If you trust games and social media apps enough to download them, then know that budget apps are safe for your devices, too.
Just make sure you download from reputable brands or developers. Do some research if you need to. Read reviews to find out more about the app and the brand it carries.
You will also need to update the app regularly, or every time a new upgrade prompts. Keeping apps up-to-date will allow you to use the functions smoothly or without issues.
Some developers also incorporate safety features into their products, of which you would want to take advantage.
If you’re dealing with personal accounts and finances, handle security with utmost priority.
You’re downloading a budgeting app to manage your money, not lose it.
Most, if not all, apps are equipped with data and password encryption to secure users’ accounts and information.
It is something you, as a user, would want in an app.
It is best to use strong passwords to keep your app or budgeting account secure. Check if face identification features are available before downloading.
These account protection methods are in place to make sure your assets are safe.
What Are The Best Free Budgeting Apps?
Selection processes are very time-consuming, especially when what you’re looking for is the best budgeting app. Remember, money matters matter a lot.
So, you always want to make sure you find the best application to manage your finances.
I very well know that you’ve already got your hands full, so I want to take some load off your back by narrowing your options to five than three.
I’ll share insights on some best budgeting apps in terms of performance, cost, and features.
Here are the five best budgeting apps out in the market today.
- You Need a Budget (YNAB)
- Personal Capital
1. You Need A Budget (YNAB)
You Need a Budget (YNAB) is not just an application but a whole budgeting system that claims to teach money management that yields results you will enjoy for a lifetime.
The YNAB concept leans on financial education and practical application. It is not just an app but a partner in financial management.
YNAB’s support team is on a different level as well.
Online support and workshops on using the app will help you quickly incorporate the app’s method into your lifestyle. It is what makes YNAB’s budgeting system more effective.
Four fundamental rules anchor the YNAB system:
Rule 1: Give Every Dollar a Job
This rule works around the concept that what you earn should work for you.
It merely means you decide how to spend your income as soon as you receive it.
This system of budget allotment must be based on priority and significance, helping you avoid impulsive spending.
The only challenge to this rule is how you train yourself to follow it strictly.
Rule 2: Embrace Your True Expenses
For me, it is like allowing yourself to undergo a process of acceptance – accepting and embracing your monthly bills.
Once you fully come to accept that you have to let go of a certain amount of money for this expense, you will set wholeheartedly aside a portion of your income for that expense.
This way, you won’t have to experience anxiety or panic attacks until coming due date.
Rule 3: Roll With The Punches
It is with some circumstances in life that this rule teaches you to just “live with it and shrug it off.”
If things don’t go your way, i.e., you went over your budget for one category, all you need to do is make adjustments, let the budget from another type make up for it, and then move on.
Don’t let guilt sit in your head, or you’ll be spending the rest of the month thinking about it. It could eventually make you lose control of your budget plan.
Rule 4: Age Your Money
The fundamental idea of this rule is learning to use money that you could save from previous underspending.
It means you will have to learn to live below your means to have extra funds for future expenses.
How do you like the idea of paying for this month’s bills with your savings from the previous month? Liberating, isn’t it?
With YNAB, you spend every single earned dollar wisely.
Tested and Proven Method
The four rules mentioned above have helped establish a name for YNAB. The app is trusted because it has already been tested and proven to be effective in wealth management.
Credibility, reliability, and reputation matter in budgeting, too.
One reason some people cannot follow a budget plan is that they lose track of their objectives.
Whether it’s a specific savings amount or spending limit, having a clear sight of your goal makes it easier to achieve it.
As YNAB puts it, budgeting is not always about restrictions. So, whatever purpose you set, this budgeting app will remind you of it and help you achieve it.
Financial reports contain figures. If numerical values aren’t complicated enough, wait until you see them illustrated in graphs and charts.
If you’re not used to reading graphs, then you might think of these as eyesores.
YNAB makes it easier to interpret data with excellent and uncomplicated visual graphics, making it friendly for many users, not just budget experts.
- Teaches sustainable budgeting
- Allows joint budgeting
- Equipped with spending tracking
- Can be synced with personal financial accounts
- Has strong support options
- Does not allow bill tracking
- Can be slow to load sometimes
- Has a slightly expensive subscription fee
- Not as automated as other apps
- Its interface looks like a spreadsheet
Cost: $11.99/month or $84.00/year
Best for: Giving Every Dollar a Job
Mint is a free budgeting app by the software company Intuit. It’s in the same family as TurboTax and Quickbooks.
Mint started in 2007 and has quickly garnered millions of users within two years. Its consumer count currently stands at 15 million.
This app is compatible with both iOS and Android devices and is best at collating financial information or accounts. You can sync it with your bank and credit card accounts.
With this functionality, you can monitor payments and transactions made across different accounts, real time.
Although it does not have bill payment options, it sends notifications on payment dues and payments.
As a budgeting app, Mint doesn’t limit setting budgets only; It also allows goal setting, spending tracking, investment tracking, and credit score monitoring.
I’d say these features give you an excellent overview of your financial standing.
For visual budget analytics, reports generated by this app are eye candy.
Understanding and analysis of data should be a piece of cake. I know, as young professionals, your spending categories aren’t modest.
So, having an app that can flash spending patterns, cash flows, account standing, and red flags is like being on cloud nine.
Quickly identifying patterns in your spending and seeing where you might overspend will help you change your spending habit or your budget–or let’s stick with adjusting spending habits.
Budget Goal Setting
Mint lets users control their budgets by setting goals and creating budget plans with their budget categories.
Goals and categories are customizable, making the app flexible for different users.
If you are clear about what you want to achieve financially, you will become more mindful of your spending and more focused on achieving the goals that you have set.
Not all budgeting apps have this feature.
But Intuit was intuitive enough to know that millennials are financially more innovative now and are exploring investment products.
So, Mint sync with investment accounts, making it hassle-free to check how you perform in the market and inspect your portfolio.
Credit Score Reporting
Credit scores are potent elements. They can either build you an empire or destroy your chances.
So, make your credit score your best friend. I’m not even exaggerating. If you’re serious about being financially well off, make sure you strive for a good credit rating.
Monitor your credit score. Mint currently only works with TransUnion. To access information on other credit bureaus, Mint’s Credit Monitoring Service can do the job for you.
It is a welcome feature for a budgeting app to keep your credit score in check.
- Has an easy-to-use spending tracker
- Uses bank-level security
- Regularly updated
- No bills payment feature
- Does not support money transfers
- Customer service is not 24/7
- Some accounts need to be re-added manually
Best for: Visual Budget Analytics
Trim, or AskTrim, was introduced in 2015. It works best at doing the most basic function of budgeting apps: tracking expenses.
The technology behind the app’s spending tracker and expense reduction are both impressive and reliable.
Trim is unique from other budgeting apps because it helps reduce your spending and increase your savings.
It uses two main approaches to do this: 1) bill negotiation and subscription cancellation. Both Trim do with some level of automation. Talk about AI in budgeting apps.
Bill negotiation is one of Trim’s flagship features users are probably most thankful for; what better feature is there than having an AI program that helps you save on your monthly bills by doing the bill negotiation for you?
Can you imagine how much savings you could end up with if you’re able to negotiate all bills and have a few hundred dollars extra every month?
Not all people know they can arrange their bills. And not all people know an app can negotiate their bills for them!
Trim developers have probably seen how many people are spending on unwanted or inactive subscriptions. It’s easy to overlook miscellaneous or recurring charges on your bills.
More often than not, you pay for services you don’t use anymore and spend money for charges you don’t even know existed. These expenses, when accumulated, could total a significant amount of savings.
Hence, it may sound irrelevant to budgeting, but having this feature will indeed have a substantial long-term impact.
Everybody dreads the word debt. Despite all efforts to remain debt-free, some people still sometimes find themselves deep in the pit of debt.
Some can pay off, while others, unfortunately, just sink deeper and deeper. If you want to avoid this unfortunate circumstance, you would like to take advantage of Trim’s debt calculation feature.
What do you say if an app can create a budget plan that could help you pay your debt off?
- Free and premium versions
- Bill negotiation features
- User-friendly interface
- Helps establish an effective savings plan
- Lacks goal-setting features
- Has no investment tracking
- Has no mobile app
Basic Features: free
Bill Negotiation: 33% of savings on bills
Best for: tracking expenses
4. Personal Capital
From the keywords “personal” and “capital,” personal capital is more than just a budgeting app that provides an electronic platform for wealth management.
It is an easy-to-access all-in-one app that creates budget plans tailored to your personal needs, helping you grow your capital.
If you’re looking to monitor and improve your net worth closely, Personal Capital might just be the best app in the market for you.
Launched in 2009, Personal Capital shines over other budgeting apps because it focuses more on investments.
With its untainted reputation as a digital financial management app, Personal Capital currently manages over $12 billion in assets.
The secret to this app’s success is that its developers could merge the power of digital wealth management with human financial expertise.
It means that, by downloading this app, you avail of online financial education and help from actual human financial advisors.
And because you can link it to your bank accounts, it becomes a one-stop shop to access and manage finances.
With these features, you know that Personal Capital will do more than let you track expenses. It’s a versatile personal finance software that you can comfortably use to explore and manage financial options.
It’s not just a budgeting app; Personal Capital is a leader in the business of wealth building.
Net Worth Calculator
Personal Capital lets you have a bird’s-eye view of your net worth with its asset and liability tracker.
Patterns are easier to read and analyze. Knowing your net worth will let you know whether your budget plan needs tweaking or whether you’re on the right path to financial freedom.
Seeing your net worth increase is a good morale booster, isn’t it? So, here’s an app you can run if you’re aiming to improve your net worth.
Cash Flow Manager
This feature is most useful when you have debts to pay off or simply want to see how much you’re spending on various categories.
Income and expense trackers generate reports that show where most of your money goes and whether you can adjust to make your budget fit. It is best for budget management.
As mentioned, Personal Capital is an app that treats investments seriously as if it were a personal investor.
Most people do not just want savings when they retire; some want to grow old with peace of mind, knowing they have investments to back up their retirement. Investments differ from savings in more ways than one.
So, if you can have both, and if you’re able to find an app that will manage both, you’re off to a good start. The more diverse your portfolio is, the better.
- Has investment management features
- Can be synced with personal bank accounts
- Has digital and human wealth managers
- Expensive wealth management fee
- $100,000 minimum required for wealth management
Wealth management Feature: percentage of total assets (e.g.,.89% per year for the first $1 million of assets)
Best for: viewing or tracking net worth
Every budgeting app has a feature that makes it stand out despite the stiff competition in the market.
It is an app that’s almost synonymous with saving. Its algorithm works as an automatic money-saver, doing the savings allocation for you, even without your knowledge.
Digit can automatically withdraw money from your checking account into your savings account based in the US.
Because it partners with around 7,000 financial institutions in the US, you can sync it with personal savings accounts.
However, you can only pair with one checking account per user.
Digit analyzes your spending habits and decides how much you can set aside or afford to save.
This way, whether you like it, you will SAVE a certain amount every month, depending on how much your budget can afford.
Digit factors in your spending patterns, account balances, cash inflow, and expenses. With these variables considered, Digit calculates the amount that goes into your savings account.
It is best for people who have trouble setting aside a portion of their income for savings.
We all just want to manage our finances and retire debt-free and with savings and investments.
If you’re in the market for an app that can help you build a sustainable savings plan, Digit is the best for the job.
It just might be every budget geek’s dream feature–to have the app automatically do the saving.
If you can’t get yourself to allot income for savings, then Digit will get it done for you.
It will analyze your finances, determine the amount you can save, and automatically transfer it to your savings account.
Since Digit has access to your accounts and starts transactions automatically, it might trigger an overdraft fee.
There is no need to worry as Digit reimburses any overdraft amount that your bank may charge. It’s pretty considerate for an app because it does that.
Account Management via SMS
Not only does Digit communicate through SMS, but you also have the option to do specific actions by sending a text message or responding to message prompts.
You can get Digit to show you your balance in your savings account by simply sending the text “savings.” You will also receive updates on your accounts.
- Has an automated saving functionality
- Helps create a debt-pay strategy
- Compatible with iOS and Android
- Has a simplified goal-setting feature
- Gives a 10% savings bonus
- Poses risks of confidential information leakage
- Charges minor interest on savings
- Can only be linked to one checking account
Best for: automatically saving
Best Free Budgeting Apps
Now, it’s time to trim down our options to three. Considering the discussion, here are my top picks for the best free budgeting apps:
Mint is not only a popular pick because it’s free or because a company trusted in software development basks it.
This app has proven itself to be a reliable budgeting app that is why users continue to patronize it.
With Mint’s fantastic features, budgeting becomes a pleasant experience at no extra cost.
Mint’s expertise is in data reports. If you’re not too fond of financial charts, then Mint will be a good friend to you.
Although Trim is known for its unique negotiation and subscription cancellation features, it also has a free version that allows users to manage finances even with its essential functions.
Trim is a system that different budgeting styles can adopt.
It is a budget investors’ app. Personal Capital’s effective investment monitoring algorithm makes it the perfect app for those who want to “budget” and “invest.”
With this app, users will receive insights about savings plans and their overall net worth. The best thing about this app is it is free.
How To Choose The Best Budgeting App
Decide On Must-Have Features
Only you know what is best for you. Assess your financial situation, and budgeting needs, and list key features you need in a budgeting app.
Know your priorities and check if any of the apps’ functionalities gear towards addressing those priorities.
Are you a visual person and want an app that generates visually appealing and easy-to-understand financial reports?
Whether it’s merely to track expenses, keep your spending under control, or pay off a long-existing debt, understanding your lifestyle needs to find the most suitable budgeting app.
Remember, there are great options in the market, and they keep growing.
Check for updates on budgeting apps and see if any upgrade is worthwhile for managing your finances effectively.
If one app lacks one functionality, see if it somehow makes up for it with another cool feature.
You may not find the perfect budgeting app, but if you’re willing to compromise, and if you’re eager to do the tedious task of checking app reviews, then you will indeed find one with a system and algorithm that will help you achieve your financial goals.
Know Your Budgeting Style
Whether you are used to the traditional budgeting methods or have already been inducted into zero-based budgeting, be clear about what style you’re following because this will help you narrow down your criteria.
Determining whether you work better alone or with a partner will also help you in your selection.
Some apps have a joint budgeting option that allows partners to have access to their accounts.
For some people, having an accountability partner, or in this case, an accountability partner will make budgeting more fun and easy. If tandem budgeting is your thing, some apps allow you to keep this style.
Some people love setting goals. If goal-setting is your style, then you will surely love an app with budget goal-setting features.
It means that, as you use the app, it reminds you of your goals. It will make it harder for you to stay off-track.
Some people have no trouble saving but find it challenging to monitor their expenses. These people need a spending tracker.
Other people can diligently follow their spending habits but may still find it challenging to maintain a savings fund.
These people may need an app that automatically saves them. Whatever style you have, choose an app that is compatible with you.
What does this mean?
If you’re used to set a spending goal and checking, from time to time, whether you’re still within that goal, look for an app that has a budget monitor and notifies you if you’re about to go beyond your budget.
If you’re more into income – expenses = savings, then you will need an app that can help you manage your cash flow.
Once you know your style and determine whether you’re a “simple budgeter,” a “budget geek,” or an “investor,” you’ll check the market accordingly.
Don’t Overthink and Try One Budget App for 30 Days
If you think you already know everything there is to know about every budgeting app, check again.
You can set rigid criteria when checking an app, but if you strictly follow it, you might find yourself still in financial turmoil after a year simply because you haven’t found your perfect match.
Sometimes, “just do it” works in budgeting, too. If you’re having difficulty looking for the best app, just take the 30-day trial.
You might discover features you need but did not read about in the reviews, or find glitches that were missing in the app description.
Immersing in the product will help you discover more about it and yourself.
Nothing beats first-hand experience. So, if you’re not willing to take on a 365-day selection process, give an app, or each app, 30 days to convince you it is what you need or don’t need.
Now, allow yourself to reflect. I hope you now realize that you can gain control of your life by taking control of your finances. All you need is an effective budgeting app to change the game.
Of course, you’d have to pair this with the proper knowledge, the right aim, and the exemplary courage to take a step; finally, it will all lead you to the right tool.
Don’t be afraid to start small. After all, you can’t have a dollar without a penny.
No matter how big or small, any amount you save or invest will take you closer to financial freedom.