If you’re like me, you’ve probably opened a blank Excel spreadsheet dozens of times to try — and fail — to make your own personal budget. Some are quite successful using Excel for their budgeting uses, but others are not (i.e., me).
Enter technology and a slew of budgeting apps all marketed to people like you and me, who may or may not have a clue what we’re doing when we try to make our own budgets. Unfortunately, navigating the world of financial apps can be extremely confusing — that’s why I’ve done the work for you.
The first thing you need to know is that there are two types of budgeting apps: apps that show you where your money is going, such as Mint, Pocketguard, and Wally, and apps that force you to account for every dollar you earn and spend, like You Need A Budget, Every Dollar, GoodBudget, and Mvelopes. Which app you choose depends largely on your goals: if you just want to know how much you’re spending on entertainment or transportation per month, then using an app like Mint might be a good idea. But if you want to create a budget and decide where your money goes every month, then you need an app like Every Dollar, You Need A Budget, or GoodBudget.
Mint gives you a diagram of where you’re spending all of your dollars. It syncs to your bank account and credit cards so that when you spend $20 on groceries, that $20 shows up in the Groceries Category in the Mint app. When you open Mint every day, it shows you where you’re spending your money and how much of it is going into categories like Entertainment, Dining Out, Student Loan Payments, etc.
While this tool is free and may be useful, Mint doesn’t actually force you to make a budget. It just provides a snapshot of your spending. Some people are naturally more fiscally responsible than others, so maybe glancing at the big picture of their purchases is all they need to stay on track with their financial goals.
But for the vast majority of us, assuming complete control of our money is the only way for us to learn to be responsible with it.
When I was deciding which budgeting app to use, I ended up choosing You Need a Budget, and here’s why: YNAB syncs to my multiple checking accounts and then forces me to, in the app creator’s own words, “give every dollar a job.” The app itself can be used on your laptop or on your phone and syncs to your checking and savings accounts and credit cards. It’s your job then to assign each dollar you own to a category. Unlike Mint, YNAB doesn’t log your transactions for you, so when you spend $20 on groceries, you have to manually enter that data and YNAB automatically subtracts it from your Groceries category. Then the app shows you how many dollars in the Groceries category are left to spend for the month. That way you can keep track of all spending and saving, and plan for big purchases or loan payments.
Even though YNAB costs $50/year for me to use, the app has enabled me to save money for trips to Nashville and New York, to plan for rent payments and my phone bill, and also pay off my credit card debt at the end of every month.
If you don’t like the sound of using Mint or YNAB, do not fear: personal finance has exploded in the app world, so there are literally dozens of other apps to match your financial needs and preferences. Some are free, and some are available for a subscription fee or one-time payment. Just remember: using an app is incredibly useful tool to help you take control of your money, but apps like Mint and Wally aren’t going to budget for you, they’re only going to show you where your money is going. If you’re serious about setting up a personal budget and sticking to it, then you’re better off investing in an app like YNAB or Every Dollar.
Ms. Patrick is a senior studying history and journalism.