Update: Be sure to check out our new Budget Apps section below.
Managing your money is a complex skill, especially now that you no longer have to leave the house or even pull out your wallet in order to spend money.
That’s why it is more important than ever for you to track spending and stick to a budget. But the old school methods of budgeting can be far too onerous for the new Millennium. No one wants to be carrying an old-fashioned ledger book around with them to record financial transactions, and creating your own Excel spreadsheets sounds like the world’s worst homework assignment.
That’s where personal finance software comes in. There are many different budgeting and tracking programs available to help both beginning and veteran budgeters get a solid handle on their finances. Read on to learn which program will work best for your financial situation:
One way to describe Personal Capital’s budgeting software is an “account aggregator.” This program allows you to track and understand every single penny in all of your financial accounts. Once you link up all of your various accounts, including your bank accounts, investments, mortgage, credit cards, and any other accounts, Personal Capital summarizes your finances and offers you basic investment guidance.
Considering the fact that Personal Capital also tracks investments, it offers a more comprehensive (and free!) service than similar competitor Mint. The program generates graphs and charts to help you better understand your financial picture, including the following:
- Net Worth
- Account Balances
- Income Reports
- Spending Reports
- Asset Allocation
- Investment Returns
- Projected Investment Fees
Basic budgeting is also a snap with this program, as the interface gives you an understanding of all of your spending and account balances, and allows you to categorize your spending by date, merchant, and type of expense. The associated mobile app for iPhone and Android allows you to keep track of your budget even when you’re not at your computer.
Personal Capital also recently released a Retirement Planner tool that can help you build, manage, and forecast your retirement savings in the same place you handle your regular budgeting. You can use the Investment Checkup feature that asks you to create a basic risk profile, pick a target retirement date, and your projected income sources, and the program will recommend a portfolio for you. Finally, there is a fee analyzer that can help you to understand the fees you are paying on you current investments.
As with all other web-based personal finance programs, Personal Capital uses the same security and encryption you can expect from online banking.
Pros: The most comprehensive aggregate of financial information, making this ideal for those with complex finances. Basic investment guidance is a major plus.
Cons: The program is not as customizable as some others—neither asset allocations nor spending categories are customizable.
Now in its tenth year, Mint is the original free web-based personal finance tracker. When you sign up with Mint, you provide the program with all of your financial accounts, including bank accounts, investments, retirement funds, credit cards, 529 accounts, and the like. Mint allows you to see all of your financial information in a single dashboard, which also calculates your net worth.
To get into the nitty-gritty details of your finances, Mint tracks your transactions and automatically assigns an income or expense category for each one. It also assigns a default budget to each category of expenses, although you can create your own monthly budget, as well. The default mode is a nice way to start budgeting if you’ve never done so. You can see your financial progress using the trends function, which creates graphs and charts of your finances to help you understand where you money goes.
Mint also helps you create goals—both savings and debt reduction—and tracks your progress.
It’s important to note that Mint does gain access to your login credentials. So there is the potential for exposure of this information. However, Mint offers the same kind of security you see from an online bank, making them just as safe as Capital One or Bank of America.
Pros: Mint is completely free, very user friendly, and offers balance and spending alerts to keep your money on your mind.
Cons: You have to manually track cash spending, some automatic expense categories are not useful/incorrect and need to be changed by the user.
You Need a Budget (YNAB for short) is an online budgeting program based on the envelope method, wherein budgeters set money aside for specific categories of spending. The program guides you through the process of budgeting, setting goals and sticking to them, and reconciling accounts.
The philosophy behind YNAB is built on four basic rules that will help users live within their means:
- Give Every Dollar a Job—All money you receive is assigned to a specific budget category
- Embrace Your True Expenses—Understand your irregular expenses.
- Roll With the Punches—You can strategically rearrange budget categories if your spending doesn’t exactly align with your plans.
- Age Your Money—You can end the paycheck-paycheck cycle by building a buffer of one month’s cash in hand.
YNAB believes that in order to successfully budget, you need to be hands-on with your money. Until the most recent version was released in December 2015, users had to manually enter all transactions—although the program and its companion apps for iPhone, iPad, and Android devices made this very easy. This also means that YNAB is one of the few programs that easily allows users to track cash spending.
With the most recent update, the program does now automatically import transactions, but it is up to the user to assign each transaction to its appropriate budget category. You may still use manual entry if you prefer, or a combination of automatic and manual.
In addition to the program, signing up for YNAB gets you access to financial literacy classes, tutorials, a community of YNAB users, blog posts, and budgeting tools and tricks.
As with Mint, YNAB’s security is bank-grade, and the program relies on third-party audits to maintain data privacy.
At $50 for a 12-month subscription, YNAB is not the cheapest personal finance program around, but you get a generous 34-day free trial before you commit.
Pros: YNAB is geared toward teaching users how to budget and make managing their finances a habit. The large online community can be very helpful.
Cons: The hands-on nature of the program might not appeal to all users. The cost is higher than most other personal software.
Cost: $50 per year
Like YNAB, Mvelopes is personal finance software that offers a 21st century method for following the envelope budgeting method. This online tool has both Android and iPhone apps that allow you to keep track of your spending on the go.
When you sign up with Mvelopes, you link up to four bank accounts (including checking accounts, credit card accounts, and PayPal accounts, among others) and create up to 25 spending “envelopes” to manage your spending. The program automatically tracks your transactions, which you then assign to the correct spending envelope, where the amount of your transaction is subtracted from the money in that envelope. You may also manually track cash transactions.
One of the unique features of Mvelopes is how it handles credit card purchases. When a user makes a purchase using a credit card, the program removes the transaction amount from the spending envelope, and places it in a special envelope to pay off the credit card. When your credit card bill arrives, the amount due is already set aside in the envelope, so you will be able to pay off your bill in full.
The basic Mvelopes program is free, but the Premier version costs $95 per year and offers unlimited banks accounts and spending envelopes, as well as integrated premium video content and live chat support.
As with other online personal finance programs, your information is kept secure with the same top-level SSL encryption technology used by all major banks.
Pros: Mvelopes is set up to be interactive in order to teach users how to budget. The credit card spending envelope feature is a very helpful aspect of the program.
Cons: Multiple reviewers have stated that the program is not necessarily intuitive.
Cost: Free for the basic program, $95 per year for Mvelopes Premier
Quicken is the great-granddaddy of personal finance software, having been first introduced back in 1983. The current version, Quicken 2016, was released in late 2015, and will be the final update by Intuit, since the company sold Quicken to a private equity firm.
For many people, Quicken’s biggest selling point is the fact that it is a software program you install on your hard drive, meaning all of your sensitive financial information is also stored there—making it secure from any potential hackers gunning for online personal finance programs. (Of course, this also means you cannot access Quicken on the go).
In addition, because Quicken offers a great deal of customization and control, you can make the program work for your specific circumstances. In particular, investors can easily use Quicken to track their portfolios and quickly find any data they need in order to make investment decisions. The newest version of this software now allows users to automatically track and pay bills.
Of course, Quicken is also well-known for its sunset provision that stops online features and formatted files from working after a certain time period, which means users have to buy a new license to continue using the software. Often, these updates also include a new interface, meaning users have to relearn the program after each update.
Pros: Quicken is the most comprehensive personal finance software available. Security-conscious users can rest assured that their information is completely safe.
Cons: The sunset provision can be extremely frustrating. The lack of an associated app can make it difficult for some users to stay on top of their budgeting with Quicken.
Cost: Between $30 and $95, depending upon which specific software package you purchase.
Dave Ramsey, the get-out-of-debt and budgeting guru, released his free online budgeting software back in March of 2015. In keeping with his teachings, EveryDollar is focused on tracking every dollar so that all of your money is accounted for and you know exactly where it is all going. According to the EveryDollar website (and borne out by multiple testers), you can create a budget on their intuitive and user-friendly online program in 10 minutes.
The program offers eight main spending/saving categories to help you get started with creating your budget. These include:
- Insurance & Tax
If you decide to create additional categories in your budget, the program makes that category a savings goal, and you will input how much you plan to spend for each category per month.
Creating the budget is the easiest part. From there, it is up to you to input all of your transactions manually. (EveryDollar Plus, which costs $99 per year, will automatically import transactions for you.) There is an iPhone app available to make inputting transactions simple while you are out and about. Unfortunately, there is no Android app at this time. One common complaint about EveryDollar is that it does not allow users to create recurring transactions, which can cause you more work as you try to reconcile your transactions with your budget.
One added benefit to using budget software from Dave Ramsey is the fact that EveryDollar helps you walk through his 7 baby steps to get out of debt and build wealth. The program offers you the option of using excess funds for the baby steps, which can help you reach your financial independence.
Pros: The program is very easy to set up, with an intuitive user-interface and well-thought-out defaults. If you are a follower of Dave Ramsey’s teachings, EveryDollar will help you meet the goals he suggests.
Cons: The free version of the software does not automatically add transactions, nor does it allow you to set up recurring transactions, which can cause some reconciliation headaches. There is currently no Android version of the mobile app.
Cost: EveryDollar basic is completely free. EveryDollar Plus costs $99 per year.
Best Budgeting Apps
Sometimes you need to handle your budget on the go. The following budgeting apps can be accessed on your smart phone anytime, anywhere.
The cash envelope method of budgeting is the age-old technique for preventing overspending. The problem is that we live in an increasingly cash-less society, and it can be tough to apply envelope budgeting strategies to modern methods of spending. ProActive takes a new and fresh approach to online cash envelope budgeting. Proactive is a forward – thinking solution that helps you make proactive decisions before purchases verses tracking your money afterwards.
It’s a budgeting app based upon the cash envelope system. With this program, you will receive a Visa branded ProActive debit card that you will transfer money to and then categorize into virtual envelopes. When it comes time to make a purchase, you will open up the app on your phone and tap which envelope the funds are coming from before swiping your card. If you forget to choose a spending category, you card will be declined.
You are able to also link a credit card to the account. When you use your credit card, ProActive puts the amount of the transaction into a separate category that you can use to pay off your card at the end of the month. If you are unable to use your phone at the time of a purchase, you will not be able to use your ProActive debit card, which seems like it could be problematic if you have any issues with data on your smart phone.
Pros: Like traditional envelope budgeting, you cannot make a purchase with ProActive Budget unless you know which envelope the money is coming from. That’s the brilliance with this innovation. The credit card linkup allows you to enjoy the benefits of credit while making sure you set aside the money to pay off your bill each month.
Cons: The fact that you are unable to use your ProActive debit card if you do not have your phone available could be problematic if you lose a data connection. ProActive recommends taking a separate pay card to alleviate this concern.
Cost: The program costs $60 per year.
Large corporations use generally accepted accounting principles (GAAP) in their bookkeeping—so why shouldn’t individuals do the same? GAAP allows for efficient, comprehensive, and consistent accounting, which would be a boon to the average budgeter. AccountMe offers users a customizable GAAP accounting framework that allows you to view, edit, and budget your finances using the same double-entry bookkeeping as multi-national corporations. This means users will have an incredibly accurate view of their finances.
AccountMe describes itself as just like corporate accounting, with a few twists. Specifically, tracking your expenses in a personal budget needs a little more nuance than traditional GAAP accounting allows, so AccountMe divides your expenses into three categories: Necessary Fixed Expenses, Necessary Variable Expenses, and Discretionary Expenses.
For users who are familiar with GAAP accounting, AccountMe offers an easy-to-use budgeting app that will dovetail with their accounting knowledge and provide a comprehensive view of their money. According to their website, AccountMe will soon be offering features to link to bank accounts and credit/debit cards to allow automatic population of your expenses.
Pros: Having a customizable GAAP accounting platform as an app on your smart phone is a major boon for anyone already familiar with GAAP.
Cons: If you do not already know GAAP, it is not necessarily easy to learn from a smart phone app.
Cost: There are three levels, starting at $9.99 per month for the basic platform, $24.99 for the mid-level, and $49.99 for the highest level (nicknamed the Gordon Gekko level, which indicates the creators of AccountMe have a sense of humor).
Imagine you had a financially savvy best friend who you could fold up and put in your pocket. He’d do all the calculations you’d need to figure out how to reach your goals (with his tiny pocket calculator), suggest an amount of money you could set aside every day to reach those goals, and give you itty bitty high-fives when you saved money.
The forthcoming app Hip Money is that financial best friend. When you sign up with Hip Money, you securely link it to your checking, savings, banking, and/or loan accounts so the program can understand your spending habits. From there, you will create goals for savings or for paying off debt. Once a day, the app will ping you with a personalized daily savings recommendation. This is an amount of money that the program has determined you can safely set aside based upon the money you have coming in and going out.
The really exciting feature of Hip Money is that it will show you how much that daily savings recommendation will be worth depending on where you send it. For instance, if you are saving up for a trip to Cabo in a savings account, the $5.55 the app recommends that you put aside will be worth $5.89 with the small amount of interest you earn. If you send the $5.55 to your student loan, it could save you $29.78 over the life of the loan. And if you put that $5.55 in your retirement account, it will grow to be worth $67.91 by the time you retire.
Once you have decided where to send your savings, a simple swipe will send the money to your selected account, and the app then applauds you for making progress on your goals.
Pros: The app is designed to help you reach your goals without asking you to sacrifice your priorities or make drastic changes to your spending habits. It’s all about making saving money easy.
Cons: The app has not yet launched. It’s not entirely clear how the program determines a safe amount for you to save each day, nor what safeguards are in place to protect you from a potential overdraft.
Cost: Once Hip Money launches, the app will cost $18 per year.
For the budget-averse, it can seem like handling money is about constantly juggling and never getting ahead. That’s where the free app Cashpath can help. Once you securely link the app to your bank and credit card accounts, the app uses your past transactions to predict and adjust your cash flow every day, showing your discretionary money as “Free Cash.” The program will then help you split your Free Cash between Save and Spend. Since the app is designed to show you your money in real time, it is able to automatically adjust your Spend amount each day in response to unexpected bills or overspending.
Since Cashpath offers you a single dashboard to see all of your transactions, it’s a great tool for anyone who struggles to keep track of their cash flow. The attractive and easy-to-use interface will make budgeting something you look forward to doing. Thought it is not yet available, the creators of Cashpath intend to have the app eventually offer options for doing the savings for you. It is not clear if that will be set up to be completely automatic, or if it will require input from you.
Pros: This is a gorgeous and well-laid out user interface. The program offers a simple method for on-the-go budgeting for individuals who break out in hives at the idea of a spreadsheet.
Cons: The program is still new, and not all of the potential options are available yet.
Envudu offers another option for envelope budgeters in the cash-free world. When you sign up, the program asks you to categorize the money in your checking account into separate spending “envelopes.” The program offers an Envelope Wizard that asks you a number of questions and automatically creates envelopes that will fit your budget needs based on your answers.
When you make a purchase, you will open the Envudu app on your phone, select which envelope you are spending from, and swipe your debit card to complete the purchase. If you don’t have your phone available, the app will mark the purchase as uncategorized, and you will be prompted to categorize it the next time you use the app.
Envudu is currently in beta testing and only works with Wells Fargo bank accounts. When it becomes fully available, the program will cost $10 per month. Envudu is only set up to handle debit card purchases.
Pros: For beginning budgeters, the Envelope Wizard can help you effortlessly create a workable budget. The fact that you can make “uncategorized” purchases without your phone available could be handy for the phone challenged.
Cons: The availability of “uncategorized” purchases without a phone could get some users in trouble. The lack of a credit card option might turn some users off.
Cost: $10 per month, once the program becomes fully available.
What if you had a money-savvy friend who could look over your finances, put the information into an easy-to-read graph, and even give you financial advice? That’s the idea behind Penny, the personal finance app that feels as easy as texting with a really helpful friend.
After you sync the app with your bank, each time you open it Penny will greet you and allow you to respond with a choice of several pre-written questions. Penny’s answers will help you better understand your current financial picture.
The app also offers a more traditional breakdown of your finances if you would like more information. Penny does not specifically help you to save money, but it can be very useful for anyone new to tracking their spending.
Pros: This easy to use app takes a great deal of the intimidation out of finance. In addition, Penny’s pre-written questions allow new budgeters to know what to ask even if they would otherwise be confused.
Cons: The pre-written questions might be annoying to a more advanced budgeter.
Best for: Beginning budgeters.
Would-be savers who would like some community encouragement will love Unsplurge. This iPhone app asks you to choose a goal and upload a picture of your goal. Once you have set your goal, it can then be shared with “Town,” which is the community platform for Unsplurge, where users can see others’ savings goals and cheer each other on. You (and Town, if you choose) will get to see your progress as you put money aside for your goal.
Unsplurge is not synced with your bank, so it is up to you to actually save the money. However, the app is designed to help you create and maintain a habit, using both community and personal motivation to keep you on track. In addition, the app offers savings tips, such as a 52-week money challenge, to help you get into the savings frame of mind.
Pros: Both the progress bar and the community aspect of Unsplurge can be very motivating and help you to establish a habit of saving money.
Cons: Unsplurge does not help you budget or identify money that it is safe to put aside in savings. Also, the app is only available on the iPhone.
Best for: Those who are comfortable with budgeting but need additional motivation to save money.
Pennies (not to be confused with Penny, above)
This very intuitive iPhone app helps even the most absent-minded of spenders to stay on budget. Pennies allows you to set a number of budgets (such as monthly fun money, weekly food spending, and the like), with a start date, length of budget term, and the amount available to spend. Each time you make a purchase, you enter the amount into Pennies, which will show you the number of dollars and days remaining in that particular budget.
The app uses colors to help you gauge the health of your budget—a red background shows you that your money is quickly dwindling, while green and blue lets you know you are cleared for additional purchases. If you forget to log purchases, you’ll get an occasional reminder from the app to go back to tracking.
Pennies does not sync with your financial institutions and only tracks a single source of money at a time, which can make things a little difficult for anyone with multiple bank accounts or payment methods.
Pros: This app is easy to use and offers a convenient method for tracking spending.
Cons: Pennies only tracks one source of money, which means it might not work for individuals with more complicated finances. The app is only available for iPhone.
Fees: $2.99 one time purchase fee.
Best for: Beginning budgeters.
The Level Money app syncs with your bank account and determines how much will be left in that account after automatically deducting upcoming bills, recent purchases, and your savings goals. It then gives you an estimate of the amount of money that’s safe for you to spend over the next day, week, and month.
In addition, the app also offers an Insights section that allows you to track a certain category of spending. For instance, you might create a “coffee” category and have the app track all of your spending in your favorite café. The app will then show you how much you have spent on coffee over the past month, and will calculate your average monthly coffee expenses if you continue caffeinating at the same rate, as well as your projected annual amount spent on coffee.
Level will let you know if you are getting too close to overspending your account, but it is still entirely up to you to keep from blowing through all of your money.
Pros: The app makes spending decisions incredibly simple, and since it is synced with your accounts, you do not have to remember to enter in new purchases.
Cons: Setting up the app can take some work, particularly if you have irregular income. In addition, some recent purchases can take a little time to show up in the app.
Best for: Beginning savers and/or budgeters, or those who hate dealing with money.
Change (Not to be confused with Bank of America’s Keep the Change, above)
The founders of Change started with a simple idea: the best way to influence people to save is to spark behavioral change. After all, consumers have 100% control over what they spend and save, and yet they do not necessarily make the best decisions for themselves.
So the Change app, unlike others on this list, does not automatically change your saving or spending habits. What it does is alert you to those habits and give you choices for how to make changes.
Here’s how it works. When you sign up with Change—which the creators describe as an “invisible” app, since there is no app icon on your device—you link your bank and credit card accounts to the program, which anonymizes and encrypts your information for your security. Once your accounts are linked, Change analyzes your spending habits to find bad financial behavior. It then sends you text messages to alert you to behavior you may be unaware of and suggests simple ways to change the behavior.
For instance, you might receive a message alert pointing out that your $14.95 per month Audible subscription costs you $179.40 per year. Or Change may text you to let you know your top spending category for the previous month was $200 in coffee shops, where you never spent more than $15 at a time. Those little nudges can help you become more aware of your spending habits without asking you to drastically alter your lifestyle. Change offers suggestions for how to reduce such costs so that you can seamlessly reduce spending without feeling deprived.
As of this writing, Change is in beta testing and will be launching its public version in September 2016. Though there is currently no savings or other bank services, the Change website explains that those offerings will be coming soon, and that Change intends to make money by taking a small piece of the interest from those transactions. Change is now, and will continue to be, completely free for users.
Pros: Change is all about teaching users to be mindful spenders, which is the kind of long-term lesson that all consumers need to learn. There is no expectation that you will completely give up the spending habits that make you happy. These concepts are based upon solid research in behavioral economics.
Cons: There is not yet any automated savings associated with this app.
Best for: Change’s creators are specifically targeting 25-35 year old Millennials, although anyone who is looking for more insight into their spending habits would get a lot out of this app.
A brand new entry to the world of personal finance technology, Debitize was the 2016 FinTech Competition runner-up. It offers a solution for consumers who have trouble with credit card spending but do not want to give up the protections and rewards offered by credit cards.
When you sign up with Debitize (which is currently still in beta testing), the program monitors your credit card activity and automatically transfers the amount of your credit card transaction from your checking account into your Debitize account. Then, the program automatically pays your credit card bill each week with the money set aside in your Debitize account.
To make sure Debitize does not overdraw your checking account, you can set up a minimum balance amount. (The default minimum balance is $100, but you can set it to whatever amount will work for you.) The program will notify you when Debitize withdrawals take you down to your minimum balance, and it will continue to monitor your checking account for deposits so it can transfer the necessary funds. If you encounter an emergency and need to access the funds in your Debitize account, you may request a transfer back to your checking account—although the program discourages this unless necessary.
Debitize will not work for individuals with a serious spending or credit problem, since your credit card will not be declined at the register if you do not have sufficient funds in your checking account. But for the average consumer, Debitize can be a great program for getting a handle on credit card spending, while still enjoying the benefits of credit card perks.
Pros: Debitize allows users to have the best of both the debit and credit card world. You save money in credit card interest by always paying your bill in full, while still reaping your credit card rewards and protections.
Cons: Those who consistently struggle with overspending will not be helped by the Debitize model.
Best For: Consumers who are able to responsibly use debit cards, but struggle with credit.