Saturday, 20 February 2021

Best Budgeting App For 2021

I love budgeting apps. A study was done recently found that the average person that downloads and begins using a budgeting app maybe 2 to 3 times per week reduces his or her discretionary spending by around 12 on average. I downloaded a total of 18 budgeting apps and I spent anywhere from 30 minutes to an hour over the course of a few days, trying out each one of these apps. 

Don't worry, I'm not going to talk about all 18. I'm going to talk about some of my favorites. I don't think that there's one best app for every single person. I think it really depends on how you're going to be using the app. So keep in mind that these aren't in a specific order, these are just based on the types of person that I think might benefit from these apps.

1. Personal Capital

Personal capital is the app that I've been using personally for like 7 years now and I love personal capital. Automatically brings in my transactions, has my checking account, my credit cards, my investment accounts, all of it linked in together and I can get a comprehensive picture of my financial situation. 

If you're going to be budgeting like me, so the way I budget, I don't really have specific buckets that I keep track of, I generally know that my mortgage is x amount, I know that I spend say $700 a month on groceries, I know $700 is too much, but that's what I spend. I know my electric bill is going to be between $80 and $200 a month, and I just like to look throughout the month and just make sure that I'm on track with these spending levels. If I spend $800 in one month on groceries then I just try to pull back a little bit the next month. Also, I like to look at everything together, and so I'm looking at my investments, plus my checking accounts, and my credit cards, and looking at transactions, making sure everything looks good. Personal capital does a great job of pulling everything in together. 

do links break to my account sometimes? yes, but all these apps are going to be using either Yodlee or plaid, and so all of them are going to have issues from time to time. One of the best things about personal capital is it is free. They will try to push their advisory services on you so that they can manage your account. You don't have to sign up for that but you do have to deal with the ads a little bit and the request. Other than that, personal capital is a great app 

2. Truebill

The next app that we'll talk about is what I call a new wave of apps that are more than just budgeting apps. They're like full-service apps

They may be negotiating your bills for you, maybe offering credit monitoring, maybe even have financial people that you can text chat with. And my favorite one of these that I found is going to be truebill. Truebill I think is really interesting. 

They have a free version it's probably not going to be sufficient for anybody that's really using the app. You're probably going to have to upgrade to the premium version. You actually get to pay what you want but it has to be at least $3 a month. Truebill is going to be doing things like canceling a subscription for you, tracking your credit, they'll even negotiate your bills. Now, it's important to know if you do the bill negotiation process, so let's say that you're going to negotiate your cell phone bill, if you let them do it then you're going to pay them 40% of whatever they save you

So let's say that they save you $100 in a year. You got to pay them $40. And that $40 is paid upfront so you're gonna pay them $40 today and then have to keep that subscription for the next year to realize that $400 savings. 

Personally, if I was using it I would use the app to find these types of things that I could reduce or negotiate, and I'll go make that phone call myself. But they have the option and they're available if you want to use them. Now the biggest restriction on the free version, versus, the paid version is if you're using it for budgeting, this actually has buckets. If you're using it for that and you're using the free version they're going to limit you to two buckets which makes the app worthless at that point so you're gonna have to upgrade to the premium version

But especially if you're new to the whole process and you're wanting to get a handle on your personal finances but don't really know where to turn and need some guidance, and I think truebill is gonna be a really good option for a lot of people 

3. Mint

Mint is still one of the best apps out there. I think about it as a personal capital app.

Personal capital has better reports and screens in terms of your investments than mint does. But personal capital doesn't allow you to do future month budgeting which mint does. Mint also allows you to manually enter in transactions that personal capital won't let you do. So if you're wanting to enter in manual transactions or you want to do specific future month budgeting, then mint may be a better option. It is free but they support it with ads that really aren't that intrusive.

4. YNAB (You Need A Budget)

People that use YNAB freaking love it. It's $12 a month or likes $84 a year and you can download the app for free, but you have to have a subscription to actually use it. So it is required. 

I think about ynab as the old envelope method

So you put all of your money in envelopes at the beginning of the month, and you use those envelopes to cover your spending. And if you go over your spending allotment in a single month, then you have to pull money from another envelope. And that's exactly what ynab does.

I don't personally use it. I think there's a little bit more work involved in the way that I currently budget, and also, the $12 a month or the $84 a year is a little steep, especially when I'm coming from a personal capital which is free, of course, nothing's really free, but you know what I mean.

But another really interesting thing with ynab is they have this concept of aging your money. So think about it like you're pouring water into a bucket, and that bucket has a hole in the bottom of it. How long does it take for the water droplet to get out of the bucket?

Think about your finances like that. How long does it take for a dollar that gets deposited into your account, to be spent? If you're spending last week's paycheck, so maybe you're living paycheck to paycheck, maybe the age of your money is just a few days. You contrast that with somebody that's spending a lot less than they're bringing in, maybe it takes 3 to 4 months to spend that dollar. I think it's an interesting way to look at your personal finances and it's something that's unique to ynab. Again, you do have to have a subscription to use the service, but the people that use it absolutely love it.

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