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Have you tried, and failed, at budgeting?
And found that, despite carefully budgeting, unexpected expenses appear every single month?
I could never stick to the budget either. Because there was always a car repair, special event or SOMETHING.
Most people have multiple bank accounts +/- credit cards. So, budgeting has become a lot more complex.
If you have accounts with only one bank, your bank’s own expense tracking is probably sufficient.
For those that have accumulated multiple accounts and credit cards, the best expense tracker app for you can really help.
What Are Expense Trackers?
Expense trackers are apps designed to assimilate data from all your bank accounts and credit cards into one online location.
Data is added manually or electronically and automatically sorted into spending categories.
Then, it is clear where your money is going, taking into account all those lumpy or unexpected expenses.
Instead of an ideal budget that is impossible to stick to, you get a true picture of where your money goes each month.
When Would the Best Expense Tracker App be Useful?
Looking at your spending realistically makes identifying overspending and undervalued expenses easier.
Then, you can focus on cut spending in those areas. Are there subscriptions you are paying but don’t use?
I realised I was paying a huge amount on insurance premiums (house, cars, boat, health, income protection and professional!). I am pretty risk averse – going without insurance is not an option!
But there are ways to reduce costs. I increased my income protection waiting period to 90 days, and house insurance excess to $5000.
As a result, these “cuts” saved significant dollars, with no impact on my lifestyle.
Scott Pape had a pragmatic approach to insurance. I have adopted it since reading the Barefoot Investor.
He pointed out the obvious – you insure in case of disaster, not inconvenient cost.
If you have emergency savings that would cover 90 days of illness, or the first $5000 of home damage, do you really need the extra insurance?
Pay only for cover you couldn’t do without if disaster struck.
This advise has helped me turn down mobile phone insurance and rip off “extended warranties” on white goods.
Are Expense Trackers Secure?
Expense tracker apps use similar technology to banks. Nothing is ever guaranteed though.
The apps have “Read-only” access meaning you can view balances, but not transact using the app.
The banks’ attitudes towards tracker apps is, however, a real issue.
Several banks have released statements regarding expense tracker apps. They threaten sharing login details is breaking the banks terms and conditions. If there is any fraudulent activity on your account, and the bank may not reimburse you.
Hopefully, the banks will be more collaborative with the progression of open banking and customer pressure. But for now, you should probably check the situation with your own bank.
Many banks have tracking ability through your online banking. But this only tracks expenses with a single bank.
If your banking situation has become more complex, this is really where an expense tracker becomes really convenient.
Because you only need to share log in details if synch the app with your accounts and automatically pull the data, manually inputting data will not break T&Cs.
Some of the apps allow manual input of data. But this would be incredibly time-consuming. There is a more reasonable option. You can download data from your online bank and import it into the app.
This does not require the sharing of login details. It would be more time consuming than synched data but could be performed every 1-3 months.
Also, make sure you are aware of basic personal banking and identity security. How to reduce risks of using online banking apps.
Which is The Best Expense Tracker App for You?
This is a free app that is very popular in Australia.
Pocketbook can synch with >80% of Australian banking data.
It’s intuitive to use. And most transactions are automatically categorized. You can change categories and add your own categories.
There is a budgeting section where you can set spending limits and ask the app to alert you if you near them.
I have used Pocketbook for the past twelve months and love the intuitive interface. I have found it useful in identifying areas to save more money.
Do you want to review all your transactions in one place, are happy to synch accounts or manually import data? If you want to monitor your spending without a lot of fiddling with spreadsheets, you will probably like pocketbook.
Pocketsmith has a basic plan, which requires manual import of data. Unlike pocketbook, it projects your anticipated progress up to 6 months in advance.
However, the free version only allows data from 2 accounts.
Paid versions start at $10.95/month. For this, the app allows bank synching and automatic pulling of data.
It automatically categorizes expenses, allows 10 accounts and will project your finances up to 10 years.
The paid versions produce automatic reports. These reports include asset/liability and networth calculations, income and expense reports.
You can use the projections to work out whether you are saving enough to meet goals.
Money Brilliant’s basic free membership allows you to connect bank accounts, credit cards, superannuation and investments.
It, like pocketbook allows you to introduce custom sub categories for spending and calculates net worth.
The paid version will send an alert if you can save money by switching gas or electricity suppliers.
It also tracks net worth over time, and suggests potentially tax-deductible expenses.
A paid membership will cost $9.99 / month.
Money Brilliant does not allow manual data entry or data import without synching bank accounts.
Money Brilliant claim that consumers are probably protected if there is fraudulent activity on their account. Not really reassuring!
Money tree app provides a similar free service to Pocketbook.
It can aggregate data from bank accounts, credit cards, and even superannuation and frequent flyer points!
There is a reasonably priced paid version of $4.49/month. This adds personal budgeting and reporting features, making it easier to track your budget surplus/deficit over time.
Apart from the ability to track airline/ loyalty points and get warnings when they are close to expiry, this is all available for free with pocketbook.
The “Moneytree Work” version costs $5.84/month and includes automatic work expense detection (I’m not sure how reliable this is). It also has a designated feature for storing tax deductible receipts.
This is also available for free on the ATO app, or I just use the notes section on my android phone.
Unfortunately, there is no help offered with working out and with-holding taxes for the self employed.
The paid versions are only available to Iphone users!
You Need a Budget is a paid service with a 34 day free trial and money back guarantee.
The current cost is $11.99/month or $84 per year.
Instead of looking at your recent purchases, the emphasis here is on on setting goals for your money and spending limits.
You can do this with Pocketbook, but YNAB is a lot more involved.
The website has a lot of video lessons on money management and how to use YNAB.
The app produces lots of visuals to help you analyse your spending.
There are reviews on the site from savers who have paid off lots of debt with help from the app.
If you are just starting out with your first pay cheques and don’t know where to start with budgeting, this may be a useful app if you love all things tech and lots of graphs.
I can see this app also being useful for those who have made money mistakes (haven’t we all) and will benefit from the motivational aspects of graphs and visual representation of goals. If you have a lot of debt to pay off, you may need some help with motivation.
A common issue for doctors transitioning to self employment is not managing their tax effectively. Many forget to pay themselves super as well, resulting in even higher taxes paid.
Opening your own practice is stressful, with so much to learn alongside your medical training.
The self employed have to set aside their own tax, to be paid quarterly or annually.
If this is not calculated and planned well, it can result in a HUGE unanticipated tax bill.
Quickbooks Self-employed is a basic app designed just for this. It can be used for sending invoices, tracking personal/business expenses, tracking GST and recording tax deductible expenses.
This costs $10.50/month. There are also several other plans that allow management of staff and detailed tracking of spending.
The best expense tracker apps can be a really convenient tool to help optimise your money habits. First ask your bank if they support use of the app (they can allow separate log ins, if they choose). If not, consider electronically transferring data regularly. As your banking becomes more complex, money trackers become more beneficial.
Aussie Doc Freedom is not a financial adviser and does need offer any advise. Information on this website is purely a description of my experiences and learning. Please check with your independent financial adviser or accountant before making any changes.
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