If you want to be financially secure, you will need to find a method that allows you to accurately keep track of your budget, and hopefully not take too much time doing it. A pen and notebook will work fine for some, but for many, especially the tech savvy, there is an abundance of apps available for your smartphone that will keep track of your budgeting for you.
There are dozens of financial apps available that can help you budget, save money and invest. Before deciding on which app is right for you, think about what you want your budgeting or financial app to do. We tested many apps available to Canadians on both the iPhone and Android platforms and broke down exactly what you should look for in an app and the best reasons for downloading one.
When making a budget, think about what your goals are, both for the short and long term. For the short term, do you need or want to first build an emergency fund? That is important so one time unseen events cannot completely ruin your finances for an extended period of time. You may want to get out of credit card debt, and having a monthly budget will help you control your spending so you have extra cash to pay down debt quickly. It is hard to achieve financial security when you are held down by high credit card interest.
A budget can also help you cut down on expenses so you can save money. An expensive latte does not seem like a lot of money, however, when it gets purchased several times a week, all month long, it adds up to a fairly substantial amount, and a budget can help you identify that.
The goals may change when thinking in the longer term. After you have an emergency fund established, credit card debt paid off or at least under control, and are consistently saving something each month, you will likely want to focus on longer term goals.
Often people will want to start saving to purchase a house. That requires a large down payment and a clean credit history and achieving that without a written budget can be difficult. In addition to purchasing a house, you eventually will want to start saving for things like retirement or your child’s education. The sooner you start budgeting, the sooner you will be able to reach your goals.
Most people have several accounts spread out over multiple financial institutions. At a minimum, you will likely have a checking and savings account at a bank, at least one credit card that may be from a different bank, a retirement account through your employer, and perhaps an investment account outside of your employer as well. Keeping track of all of those accounts in addition to your daily spending can be a daunting and time consuming task.
Some apps can integrate with your accounts at multiple financial institutions and aggregate all of the data into one place. Many people find it convenient to at least be able to see everything on one screen. Some of the apps can send you real time alerts for things like unusual transactions or low balances, this can help prevent fraud, avoid overdraft fees and even help save for large purchases.
One of the best reasons to download one of these apps is to help you keep track of, or even create, your budget. Many of the apps can automatically download data from your credit or debit cards and analyze your spending to help you develop your own budget and cut costs where appropriate. Many times people do not realize how much they are spending on small, everyday items or purchases until they see the total amount at the end of the month, many apps will automatically do that for you.
If you are saving up for a large one time purchase, many apps will help you accomplish that by setting up goals and tracking your progress. Lastly, some apps can help you avoid simple budgeting mistakes by just checking your math, which can occasionally make the difference in avoiding a costly overdraft fee.
We tried many apps, but one that may work for you is also one of the easiest. For some, a simple spreadsheet may do the trick. We tried this method for a month and found it to be quite effective. Just keep track of your expenses and income on a spreadsheet, complete with the date of transaction, amount, and a description. At the end of the month, you can sort your entries by description and easily see how much you are spending on certain things. For some people, this may be all that is needed. For the more adventurous or tech savvy, we tried several others and reviewed what we found to be the best.
Mint has been one of the most popular budgeting apps for years. The app can seamlessly integrate with all major Canadian banks so users can see all of their accounts in one place. Each night, Mint updates and displays all of your transactions and will even help set a budget for you. The free app uses the same 128-bit SSL encryption that banks use so you know your data is safe.
We found Mint easy to use, it gives meaningful and actionable data and has a pleasant user interface. Our one qualm with Mint is that they have been promising a French language version for years now, but it has yet to be released.
KOHO is really a prepaid Visa card packaged up to look like a budgeting app. We did, however, find it quite valuable and it is a great solution for some people, as it can do almost anything a bank can do.
The app does a great job of monitoring spending and creating a budget. It also has a round-up feature that will automatically round up your purchases to the nearest dollar and automatically send the excess to savings.
It also offers cash back rewards on purchases, a modest interest rate on savings accounts, goal setting features, and will even make some of your paycheck available to you a day early if you have direct deposit set up. It also offers some personalized financial coaching which we found quite valuable.
Wally is just a spruced up version of the budgeting app you can make yourself in a spreadsheet, just with a much nicer interface. We did see how it could be quite valuable, but all it does is allow you to manually enter all of your transactions. It does have some nice features like the ability to scan your receipts, set budgets and goals, create shopping lists, and set due date reminders for credit cards and other bills.
Wally Budget is a great example of how a simple tool can be extremely useful and effective. If you diligently use Wally for a couple of months, you will have a nice visual representation of where your money is going. Seeing it laid out this way can help you decide if what you are spending your money on fits within your budget as well as your personal value system. Often we don’t realize the long term implications of small expenditures, and Wally can help easily identify that.
YNAB was one of the best apps we tested, although it does come with a monthly subscription, we thought it provided enough value to be well worth it for people who want a paid app.
The app revolves around several principles to help get the right mindset around money. First, at the beginning of the month, each dollar projected to come on is assigned a specific job, from known budget amounts to unknowns, such as an emergency fund. It also projects large, less frequent expenses and allows room for them in the budget as well.
YNAB is good if you are the type of person that likes to have your month planned out in advance and in an orderly fashion. It leaves just enough room for those occasional unexpected things that pop up, but overall if you use this app, it will help hold you accountable to your personal budget.
Good Budget is another very simple, minimalist budgeting app. It does not link to your bank or any other accounts in any way unlike Mint. It works on the “envelope method” where each month you put a set amount of money into virtual envelopes for each spending category. For example, you may designate a needed amount for bills such as rent and utilities, another for groceries, another for fun etc. It is very easy to use and has a simple, user-friendly interface. We found it to be quite effective for people who don’t need an app with lots of bells and whistles.
Our one qualm with it is that anything leftover at the end of the month gets designated for savings, as opposed to the “pay yourself first” philosophy of making savings a higher priority by setting that money aside as soon as it arrives.
PocketSmith was one of the most powerful apps we looked at. It connects to your bank and other investment accounts and keeps track of your spending and budget similar to Mint. We found it useful and easy to use.
What really sets it apart from the others is its powerful forecasting abilities. It can forecast what your financial picture will look like decades out into the future. You can make adjustments to your budget, even small things like minor cuts in monthly spending, and see the dramatic changes that will occur if you keep that habit up.
Cutting out a few expensive lunches in place of bringing food from home is a common way to cut back on spending, and it can save a few dollars a month, but to see how it can add many thousands of dollars to your net worth thirty years from now when you are getting ready to retire is quite powerful. If you are a long term planner or would like to see how small changes can have big effects over the years, then this is the app for you. It does come with a free version, but to have access to the most powerful tools, you will have to pay a monthly fee.
Spendee is a budgeting app available to Canadians that offers a few unique features that were not offered elsewhere. It will help with your budget and day to day spending, but what we liked best is that multiple people can use the app with separate bank accounts, so it is designed for families in addition to singles. If you and your spouse have a hard time agreeing on a budget, Spendee may be a useful tool. Also, Spendee can also integrate with certain cryptocurrency wallets, so if you were an early adopter of crypto, this may be the app for you.
Moka is less of a budgeting app and more of an investment tool. It operates by tracking your spending and expenses, and rounding up each expense to the nearest dollar, or even ten dollars. Then it automatically transfers the difference into an investment account which they manage. We found it easy to use and it would be effective if used consistently for a long time. It does come with a modest monthly fee of one dollar.
Now that you have a brief overview of the types of apps that are out there and their capabilities, think about what is best for you. You have several options such as does it connect with your bank account or do you have to add the data yourself. There are pros and cons to each, the important thing is that you choose what is right for you. Also, many banks have certain budgeting features built directly into their apps, that may also be a good place to start if you are unsure of what types of features you need. Test a few out and see if they help you move towards your goals.