Thinking about
what to write for the blog, a discussion that was going rounds in our EMBA WhatsApp
group chat was which budgeting app is the best one to be used. A lot of
apps were shared including one that had a New York Times article to back it up
however for someone who is kind of old school in managing the budgets I saw
some advantages and some disadvantages of using a Mobile Budget app and hence
came the topic of my blog.
I want to
lay down some pros and cons here for the Budgeting app but ultimately you must do
what suits you best and is less risky especially when it comes to sharing your
financial information. Diving into the pros of budgeting app the first one is the ease of set up. Signing up for a budgeting app is as simple as verifying your
email address and linking your financial accounts. How many accounts you have
will determine how quickly you’re set up and tracking your economic life. The second is accessibility, the online budget tool comes with a mobile app,
so you’re never more than a few taps from checking your financial health. Apps
like Mint, You Need a Budget, and Clarity Money in particular offer
easy-to-use dashboards and mobile experiences. Setting long-term visible goals
is another benefit of the budgeting app. Budgeting apps break down your overall net
worth, debts, savings goals, and other metrics that let you know where you always
stand. These details may seem like common sense, but plenty of user reviews
of debt settlement services like Freedom Debt Relief would tell you
otherwise.
On the
other side, the cons include some major concerns like most budget apps offer the
simplicity of integrating with all your financial accounts and consolidating
your activity into one dashboard. However, to get accurate analytics and
forecasts, you’ll probably need to do some tweaking. Mint, for example,
promises to categorize your spending automatically. But unless their predefined
categories work for your budget, you’ll have to create your own sections and
review your monthly transactions to ensure they’re being labeled correctly.
Also, A budget app can tell you how much you’re spending each month, how far
over-budget you are, or your progress with savings goals but it won’t make
decisions for you. If you can’t carry out the plan a budget app lays out, you
might have more success with the cash-envelope budget. This method gives
every dollar of monthly income a destination by putting cash in different
spending envelopes. People are starting to realize that using free products
carries drawbacks, namely the fact that if the product is free, the user is the
product. This is no different with free financial apps, which usually serve a
lot of ads and “personalized” recommendations for banking products and
institutions advertising on the platform. Last but in my view most critical is
the security risk. using online budget apps means one more account for a
cybercriminal to hack potentially. This is less a reflection on the companies
providing these apps and more in tune with the realization that cyberattacks
cannot be prevented, they can only be minimized. That’s why if you do use an
online budget, make sure to use a secure password manager to store your
login.
At the end of the
day, budget apps will be as effective as the person using them. If you need an
accessible system that’s easy to use and gives clarity over your situation,
then a budget app will probably do wonders for you. But if you’re looking for
an app to solve your mindset, never need any fine-tuning and pose no security
risks or data sharing.
