Let’s be honest. Budgeting is stupid. It sucks.
However, as much as I hate budgets — they are important and is the #1 on the 10 Most Important Things You Must Do To Start Investing.
So grit your teeth, pinch yourself and let’s dive in.
It’s going to be very easy.
I am a very lazy person and manually tracking my money is arduous and time-consuming.
No thank you.
Some experts believe that automating your budget disconnects you from your finances. I could see this being true.
But, since we’re just starting and hate budgeting, automation will be the key to taking our first baby steps into the budgeting world!
How to Budget
Old-school personal finance books tell you that if you just create a budget and stick to it, then—POOF!—all your money problems will be solved.
Wrong! Anybody who has ever tried budgeting knows that’s not true.
In fact, only one out of every three Americans creates a formal budget every month.
Over the past ten-plus years, I’ve experimented a lot with budgets. I’ve set monthly budgets, annual budgets, and weekly budgets.
I recommend the popular 50/30/20 budget. You spend roughly 50% of your after-tax dollars on necessities, no more than 30% on wants and at least 20% on savings and debt repayment.
I like the simplicity of this plan. Over the long term, someone who follows these guidelines will have manageable debt, room to indulge occasionally, and savings to pay irregular or unexpected expenses and retire comfortably.
However, everyone has different financial goals and aspirations. And those numbers can be adjusted to reflect that.
With that in mind, these budget apps can adjust those percents for you — AUTOMATICALLY. Meet your financial goal without doing any math yourself!
I’ve tracked my spending using paper and pencil, spreadsheets, and apps like Personal Capital (my favorite!). And through this, I’ve learned something: Automation!
Below I will provide
- Manual Budgeting spreadsheets — if you desire this option
- Best Free Automated Budgeting Apps
- Saving Apps with a Twist
Let’s dive in!
Manual Budgeting Spreadsheets
But for me, I am lazy and prefer an application to do the work for me.
If you’re not lazy like me, here are 3 FREE Spreadsheets!
- Halfbare Money Snapshot: A quick snapshot of your current financial situation
- Halfbare Budget + Networth: A spreadsheet that consists of a budget and your net worth
- Halfbare Free Complete Budget: A complete budget spreadsheet for each month.
Best Free Automated Budgeting Apps
All of the automated budgeting apps require you to link your bank accounts, broker accounts (i.e. 401(k), TSP, Roth IRA), and any other investments.
No way I’m linking my accounts!
I know what you’re thinking — it is completely safe and they have NO control over your accounts.
Like any app that has access to sensitive financial information, security is important. All the apps use bank-level security with 256-bit SSL encryption, two-factor authentication, and read-only access. You can set-up two-factor authentication using text message or a phone call with a PIN that you must enter along with your password. Or, you can set up Google Authenticator — which is what I recommend!
Let’s dive into the world of automation! And FREE!
Personal Capital is the best budget app and its free! It is my personal favorite and is ranked #1 by many experts.
Because it offers additional tools and features besides budgeting.
It offers portfolio analysis, a retirement fee analyzer, cash flow, and net worth tools amongst various investment opportunities. Though you must create Personal Capital login credentials to use them, you don’t need to be enrolled in the company’s advisory service.
Once you sign up, you can quickly link your bank, brokerage and credit card accounts. Personal Capital analyzes the asset allocation in your investment accounts based on the information it finds, telling you exactly how much you need to decrease or increase your holdings of certain asset classes to line up with its recommended target.
DIY investors can use this advice to make adjustments on their own.
The Personal Capital budgeting tool is amazing. It’s easy to use and automates the whole process. In addition, their spending analysis tool looks at your cash flow which divides expenses into categories such as groceries, health care, clothing, and restaurants. The tool tracks income sources and bills due for linked accounts as well.
Also, their free portfolio analysis tool is amazing. If you have multiple accounts, brokers or investments — it organizes it for you. Making it easy to track and follow.
Over the years, I’ve used and tested dozens of personal finance apps, but most lose their novelty after a while. I keep coming back to Personal Capital because it’s the one program I’ve found that gives me insight into my entire investment portfolio. Especially if you have a slew of investments across multiple platforms. It consolidates all of it.
The net worth dashboard is also a great way to see an approximation of your net worth without manually updating a spreadsheet.
Sounds good, right?
Mint, which is backed by Intuit, is an amazing budgeting app. They bring together everything from balances and bills to your credit score and more.
It’s your financial life, in one place that’s easy to understand.
The more accounts, cards and bills you link, the more they can help you. You can see what you have and what you owe. Understand where money goes and where you can cut back. Create budgets, track investments, discover new ways to save and more.
Mint has attracted more than 20 million users, and it’s easy to see why. Besides being free, it automatically syncs to bank, credit card and investment accounts, pulling data with little effort on the part of the user, and provides free credit score information.
The one feature I love, is the ability to set individual budgets for groceries, restaurants, clothes, beer — basically anything and track it daily, weekly, monthly.
That way you can visually track how much you’re spending.
Mint also provides “alerts” to keep you out of trouble. The service sends out a notification if a budget is exceeded, a bill is due soon, too much was spent on ATM fees or if it recognizes unusual spending activity, in an attempt to thwart identity theft.
A pretty nifty budgeting app.
Saving Apps with a Twist
Trim Financial adds a very interesting twist to budgeting and saving.
Trim calls itself a financial health company. Their mission is to solve your financial problems so that you can live the life you want.
What is the twist?
Need to cancel an old subscription? Is your cable provider overcharging you? Trim can automatically take care of it for you. Crazy right?
Netflix, Hulu, Spotify, Amazon Prime, your gym membership, Dollar Shave Club (you signed up for that one because it sounded cool but, it turns out, you don’t shave very often!) This is just a small list of the automatic monthly subscriptions you could be signed up for. And if you do the math, you’ll want to scream when you realize how much it’s actually costing you.
Trim will automatically organize all of your recurring monthly charges—and help you cancel the ones you don’t need. You can set it to text you spending alerts, balances and how much you spent on Uber last month!
As Trim grew, they started to tackle bigger financial problems, surrounding all aspects of a person’s financial life. With Trim’s Simple Savings — you can set it and forget it with automated weekly transfers into a high-yield savings account.
Having issues with debt? Trim Financial offers payoff plans where you can receive expert advice and lower APRs.
Trim is a personal finance assistant with many features and tools. A great way to save while budgeting.
Acorns is not free but VERY cheap! As you can see, it is either $1, $2 or $3 per month.
Acorns is based on the idea of saving your spare change.
What is the twist?
Instead of throwing your spare change into a piggy bank, or a plastic jug — Acorns rounds up all of your credit or debit card purchases to the nearest dollar and then invests that change into a portfolio of exchange-traded funds (ETFs).
Everything is done online and everything is automated, so you can just set it and forget it.
You can open an Acorns account for free, but you need to transfer at least $5 into your account in order to start investing. The company does not charge any trading fees, transfer fees or closing fees.
The management fee for your account depends on which plan you choose, but all plans come with a flat monthly fee. The cheapest plan, Acorns Core, costs $1 per month. It allows you to invest, but only in a taxable investment account. It also gives you access to other features like, Found Money®, which provides cash back for spending money with Acorns’ partners.
If you want to invest your money in a tax-advantaged retirement account like an IRA, you will need to pay $2 per month for the Acorns Later plan. The most expensive option, which costs $3 per month, also includes Acorns Spend. This plan gives you access to a checking account that is designed to pair seamlessly with Acorns’ services.
College students with a valid .edu email benefit from no management fee for the Acorns Core plan. This offer lasts up to four years from the time of opening an account. The other account options do not offer a reduced fee with a .edu email.
How does Acorns Work
You can open an account for free by going to either the website or mobile app. The Acorns mobile app is money — winning multiple awards for its attractive design.
To set up an account, you will need to enter some personal information, link a bank account to Acorns, set up your financial goals and indicate your risk tolerance.
There are individual taxable accounts, as well as Roth IRAs and traditional IRAs. You can choose between five prebuilt portfolios, which are designed to match your level of risk tolerance; low risk, low reward to high risk, high reward.
There is no minimum for opening an account but you will need at least $5 before you can start investing.
Accounts are funded through what Acorns calls “roundups.”
You can start making roundups by linking credit and debit cards to your Acorns account. When you make a purchase with an Acorns-linked card, the company will round the purchase up to the nearest dollar, withdraw that difference from your bank account and invest it into your portfolio.
Let’s say you spend $3.40 with your card, Acorns will automatically round that up to $4.00 and invest the difference of $0.60 into your portfolio.
It’s a little at a time, but it can really add up.
Of course, you need to decide which method is going to work best for you — manual or automation. If you have an app that updates regularly, you might be able to see what’s happening with your finances instantly and see it all in one place, before you make your next purchase.
Plus, having that automatic feature means that you don’t have to worry if you misplace a receipt, or forget to account for some other transaction; it’s all updated via the budget app linked to your bank accounts.
If you have a budget, or just don’t care to have one — the savings app might be your choice. Saving money without thinking, might be something you need!
The important thing is that you take the time to reflect on your financial situation. Whether you do that while you are spending money, or whether you do it later after you start needing to pinch pennies to make it to the next paycheck. You need to think about what you are doing with your money and consider whether or not taking control of your finances might be easier through automation.
Automation does the thinking for you, along with the math (phew!).
If you find yourself struggling financially, and if you are constantly surprised about what is going on with your bank account, it might be time to change things up a little bit and give one of these apps a try!?
The 20th-century has made budgeting easier done than said.