Create a realistic budget and don’t beat yourself up if you go over it. Like dieting, if you go from zero to 60, it might be hard to stick with budgeting. If you’re interested in how we did it, I’ve written about how we transitioned from separate accounts to joint accounts when we got married. My wife and I do this and it is invaluable. Not only do you have a teammate who can categorize transactions and fix errors, but you can also plot a path for better financial health together. If you’re in a long-term relationship and you manage finances with your partner, it can be useful to give them access to the app and work together to categorize transactions. It’s the same amount, every single month, at exactly the same time! This helps me budget month-to-month and gives me a sense of exactly how much money I have to play with that isn’t tied up in reoccurring transactions. I even include my mortgage as a subscription. That being said, it’s useful to regularly audit your transaction history for subscriptions, flag them as such, and then review your subscription list on a regular basis. Does a similar transaction occur on a periodic basis at exactly the same time? It’s probably a subscription. Luckily, many budgeting apps have subscription trackers to help you keep tabs on things.įinding subscriptions is relatively easy for these tools. Whether it’s companies trying to boost their reoccurring revenue for investors or hoping to convert more people to customers through the appeal of smaller monthly payments, everything seems to be turning into a subscription these days. If you start with a few categories, that’s great. Don’t be overwhelmed-I’ve been budgeting for years. Fewer, bigger budgets give you less accurate metrics, but they are easier to handle, especially if you are just starting out.Įxamples are always helpful when talking about budgeting, so here are my categories. It makes it easier in the long run to see where all your money is going. One question I’ve heard a lot is, Should I have a few broad categories or get more specific in breaking down my spending? Personally, I like a larger number of smaller budgets. So many random transactions just don’t fit in any other budgeting category! My favorite category of all is my miscellaneous budget. Don’t feel like you’re limited to just those categories! The more you are able to refine your budgets over time, the better. When you set up a budgeting app for the first time, you’ll usually define your budget items or categories based on some presets that you can customize. Upload a photo into your VSECU Mobile Banking app and watch your account grow. Manually correcting that inaccuracy will make sure that the insights you’re gathering from your budgeting app are correct. That probably shouldn’t go in your grocery budget, but your app will automatically put it in that category based on the store. One day, though, you get something else at the grocery store, like a beach towel for your upcoming vacation. Every time you go grocery shopping, your app adds that transaction to your grocery budget. Let’s say that your grocery budget has $500 in it. Checking the app at regular intervals will give you the opportunity to correct any errors in this automatic process. Most, if not all, budgeting apps use the merchant description to lump your transactions into the correct category. Checking your app frequently-say two to three times a week-can make sure that you are keeping tabs on your spending habits. The reality is that while they can provide insight, they won’t do the hard work for you. Many budgeting apps will advertise that they are the silver bullet to get your finances back on track. If you’re working hard to pay off debt or save, it can be extremely rewarding to see your net worth increase over time, even if the progress you are making seems slow.
Many apps can consolidate all of this information into a simple graph that shows your net worth over time. Syncing accounts is so important that I’ve switched banks/credit unions just because they had limited third-party sync options! This is especially useful if you have a few of the same type of account, such as multiple credit or debit cards. That can include debit accounts, credit accounts, savings accounts, car loans, investments, and even your mortgage! The more sources you can add, the more complete your financial picture will be. I’ve been using budgeting apps for many years, so here are some simple techniques you can use to get the most out of your favorite app.īudgeting apps work best when you connect to all of your accounts.
If you want to take full advantage of the powerful tools they offer, you’ll need to invest some time and effort.
We’ve written about budgeting apps before on this blog, including the best free and paid apps to help you save money.