Budgeting Apps Put You in Control of Your Money

 In Financial Planning

Do you sometimes feel like you’re living paycheck to paycheck? Are you concerned about taking a possible financial hit related to the COVID-19 crisis? 

One of the best ways to put your mind at ease and take control of your money is to set a personal budget. Reviewing your income and expenses on a regular basis keeps you on top of your financial goals. 

To help you track your personal finances, you can find a variety of user-friendly budgeting apps that you can set up in mere minutes. Many are free, while some charge a subscription fee. For example, EveryDollar from Dave Ramsey comes in both free and paid versions and works with iOS and Android devices.1  

Let’s take a look at how budgeting apps can help you manage your spending, savings and even investments.2 

Separate Financial Needs from Wants

Let’s say your AC goes out in the dog days of summer. Or your car breaks down on the way to work. 

Unplanned expenses like these can blow your budget if you’re not prepared. That’s why you need an emergency fund for urgent necessities, and a separate savings fund for non-necessities you’d like to have. 

Goodbudget is an app that lets you split your money into designated categories, similar to Dave Ramsey’s envelope system. It’s a good way to make sure you have enough in your emergency fund while saving up for planned purchases you want to make.2  

Think of your emergency fund as your insurance policy against the unexpected. It’s there in case of unemployment, medical emergencies, car accidents and the like. It gives you the ability to pay for these unanticipated expenses while also meeting other priorities. 

Your savings fund is for planned expenses, so you can pay for big purchases without losing sleep or incurring excess debt. This is the place to budget for Christmas, back-to-school shopping, home remodeling, vacations and other “nice-to-haves.” 

Manage Expenses

Mint is a free money management app that works with Quickbooks and tracks your spending in real time. It lets you create your own customized budget categories and receive alerts when you exceed your personal spending limits. You can also monitor your credit score for free.2  

If your spending starts creeping up higher than you’d like, there are several ways to cut back. Look for discounts and use coupons at the grocery store. Take your lunch to work more often instead of going to restaurants every day. Plan a stay-at-home date night with Redbox and pizza instead of a trip to the theater. 

Boost Your Income

Apps like YNAB and Every Dollar use a zero-based budgeting approach so that income equals expenses.2 If you’re falling a little short on the income side, look for simple ways to bring in extra cash. 

Look for belongings around your house that you no longer need and consider selling them. Furniture, art, servingware or collectibles are good examples of popular items you could sell online or at a garage sale. If you have more vehicles than you need, consider selling one of them. 

Avoid Unnecessary Debt and Excess Spending

Many people are tempted to rack up credit card debt when spending for “big” occasions like holidays, birthdays and the like. But remember, you don’t have to spend a fortune to find gifts your loved ones will appreciate or to create a memorable event. And if you think you’ll want to “splurge” on a big expense in the near future, remember your savings fund. Set aside a little at a time each month until you have enough to cover the expense. 

You can use money-tracking apps like PocketGuard to let you know how much you have left over after covering routine expenses each month.2 That way you’ll know how much you can afford to spend on non-necessities at any one time without incurring unnecessary debt. It’s also useful for planning charitable contributions that fit into your budget.

Manage Your Retirement Fund

Budgeting for short-term income and expenses is separate from retirement planning, which is a longer-term activity. 

It’s important to contribute whatever you can afford to your retirement plan at work or to a traditional or Roth IRA. Even if you aren’t ready to make a full contribution, start with an amount you’re comfortable with, and increase contributions as you are able. 

Personal Capital is an app that lets you track investments as well as your day-to-day budget. That way, you can keep up with your 401(k) or IRA as well as your monthly spending and saving.2 

 

Technology is your friend when it comes to managing your money, making sure you have enough for immediate needs and meeting long-term financial goals. 

If you’d like to learn more about setting up a personalized financial plan, our local professionals are here to answer your questions. Contact The Resource Center to schedule an appointment.

 

Sources: 

1: https://www.daveramsey.com/everydollar

2: https://www.nerdwallet.com/blog/finance/budgeting-saving-tools/

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