Wed Oct 21 2020
With 59 percent of American adults living paycheck to paycheck, it’s little wonder that budgeting apps have taken off.
The best budgeting tools help consumers plan and manage their money to pay down debt and contribute to savings and emergency funds. These apps help you identify where you may be overspending so you can reach your financial goals faster.
We reviewed the five best budgeting apps for homeowners. Our criteria was simple:
Each category is five points a piece, and the app that earned the highest score is You Need a Budget (YNAB). More on that in a moment. Let’s see how the best budgeting apps stack up.
|Features||YNAB||Mint||PocketGuard||Clarity Money||Personal Capital|
|Availability||5 – Online, IOS, Android, Alexa||5 – Online, IOS, Android||5 – Online, IOS, Android||3 – Online, IOS, Android (some features only available for Apple users)||5 – Online, IOS, Android|
|Ease of Use||5||5||5||5||4|
|Spending & Savings Insight||5||5||4||4||4|
|Price||4 – $11.99 / month or $84 / year||5 – Free||4.5 – $3.99 / month or $34.99 / year||5 – Free||5 – Free with paid options for investors|
Best Feature: Color-Coded Transactions
One of the easiest apps for beginners to use, YNAB is super intuitive. It allows you to monitor your income and expenses and offers support to adjust unwanted spending behaviors. YNAB follows the zero-sum budgeting method: it determines necessary expenses for each month and adjusts the budget accordingly.
The platform safely syncs with your accounts and imports financial information to track your transactions, balances, and spending. It uses a color-coded system so you can easily identify the consequences of spending habits (e.g., yellow means underfunded and red means overspending). The onboarding process does more than just bring in data – it teaches you about how a budget works by giving every dollar a “job.” In other words, every dollar in your budget must be allocated for a certain purpose. That’s why its users swear by this app if you want to pay down debt quickly. You can create custom categories, too.
YNAB is available on a variety of platforms, including online, iOS, Android, and Alexa. It has a 4.8 out of five stars on the App Store and 4.0 out of five stars on Android. The free trial is 34 days, giving you more than a month to see if the app works for you. After that, it’s $11.99 a month or an annual cost of $84. There is no bill paying function with this app.
Total Score: 34 / 35
Best Feature: Free Credit Score Monitoring
Mint provides a financial snapshot of everything: your bills, assets, debts, investments, retirement funds, and credit score. It can send you alerts for late fees, overspending, bill reminders, rate changes, big purchases, and more. Best of all, it’s absolutely free.
The app syncs with your financial accounts to download your data and analyze your spending habits. It also gives you spending suggestions based on your spending habits and lifestyle (that you can easily override). For example, the app might suggest spending $200 a month on entertainment.
There is no bill paying option for this app, and while you can’t adjust top-level categories, you can create your own subcategories.
Mint is available online, on iOS, and on Android. The app has a 4.5 star rating on Google Play and has received the Editor’s Choice award. It averages 4.7 stars on the App Store.
Total Score: 33 / 35
Best Feature: Premium Version Tracks Cash Transactions
If you’ve ever checked your bank account to figure out how much you have left to spend, you’ll appreciate PocketGuard. This app focuses on letting you know what’s safe to spend after your bills and other financial goals are accounted for.
There are two versions of PocketGuard: the standard plan and the PocketGuard Plus. The standard plan is free to use and the Plus plan is $3.99 a month or $34.99 a year. The Plus version lets you track cash transitions, an especially handy feature for those who prefer cash to cards.
Both platforms import recurring income, expenses, and general financial data. It allows you to set goals in certain budget categories. You can customize your categories and split a payment between two categories, which might be especially useful for homeowners.
Though the app is well liked, users do complain about advertisements even on the paid version. PocketGuard is available online, on iOS, and on Android. It has a 4.7 out of five-star rating in the App Store and a 4.1 out of five-star rating in Google Play.
Total Score: 30.5 / 35
Best Feature: Easy Subscription Cancellation
If you want to finally make some long-term money plans, Clarity Money may be the right app for you. The app’s goal is to help you understand how your current spending habits affect your long-term goals. It offers suggestions on how to improve money management based on your current money usage.
It takes a week-by-week approach with its spending plan. You can sync bank and financial data to seamlessly track spending and savings. The dashboard shows a summary of spending, credit card usage, product recommendations, and savings accomplishments.
Clarity Money doesn’t have a bill-paying feature, but it can help you cancel third-party subscriptions you’re no longer using (or forgot about).
Though a solid app, we took a couple points off because some features are only available for Apple users (like the ability to rename credit cards). Plus, not all financial institutions are supported (though 9,000 are). Clarity Money is free and available online, on iOS, and on Android. It has a 4.7 star rating on the App Store and 4 stars on Google Play.
Total Score: 30 / 35
Best Feature: Customizable Retirement Planning
Personal Capital is one part budgeting app, one part investment management service. You can connect and monitor your financial accounts – like checking, savings, and credit cards – and track your retirement funds, mortgages, and loans. Its categories are customizable and you can see what you’re spending versus what you’re saving and investing on its dashboard. You get an instant snapshot of your budget, assets, portfolio, upcoming bills, and more.
Its customizable retirement planning tool and investment management capabilities are the real selling points of this app, making it a good fit for homeowners who want to get serious about their future. That said, you probably need some investments to your name to get the most mileage out of this app. And while it can sync with many financial institutions, not all are supported just yet.
Personal Capital has a free Financial Dashboard, but if you want to take advantage of the Wealth Management service, be aware that you need at least $200,000 to invest and will pay a 0.89 percent fee. Plus, if you’re just after a budgeting app, this option may not have the depth you’re looking for.
The app is available in both the Apple Store and on Google Play. It gets a 4.7-star rating on the iOS platform while garnering only a 4.5 on Google Play.
Total Score: 29 / 35
Apps aren’t for everyone, so let’s look at some other ways to track and rein in your finances.
The 50/20/30 budget rule is one strategy for creating a household budget. It’s simple: 50 percent of your monthly budget should go toward your needs and 20 percent should go toward savings or paying down debt. The remaining 30 percent goes toward wants, like entertainment and impulse purchases.
Envelope budgeting is a system that puts a set amount of money into an “envelope” for monthly spending. Every envelope has its own limits, and you can spend up to that amount. This system is especially useful for fixed expenses, like your mortgage, home insurance, or car payment.
It can also help you plan and cap spending for things like:
In a true envelope budget, you withdraw the money from your account when you get paid and literally put it in an envelope and label it. For this method, keeping large bills in the envelope may reduce the chance of spending money on smaller items. Folks are less likely to break a $50 bill for a $2 transaction.
A zero-sum budget spends every dime in the budget every month. But “spending” is based on the job of the money and includes paying yourself in savings and retirement planning. In the zero-sum budget, your savings goals are treated like any other bill and you allocate what is necessary for the month in all your bills. There should be no excess in a zero-sum budget. This is the system YNAB uses.
For example, assume you bring home $3,000 per month. Your zero-sum budget might look something like this:
This budget allows for all the discretionary spending and whatever is leftover can be used for the next month’s budget or added to savings.
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