If you’re looking to spend less and save more money then a budgeting app could help. Here we round up some of the most popular.
Budgeting apps display all of your bank accounts in one handy dashboard and arrange your spending into different categories. Some apps even comb through your bills, suggest cheaper alternatives and help you track your savings goals.
There are lots to choose from so we have listed out top picks and explain how to choose the right one for your circ*mstances.
In this article, we cover:
- What exactly is a budgeting app?
- How do I get the most from budgeting apps?
- What are the best budgeting apps in the UK?
- Do budgeting apps really work?
- How much do budgeting apps cost?
Read more: Try our free personal budgeting tool
*This article contains affiliate links that can earn us revenue
What is a budgeting app?
First things, first. Budgeting is a way to help you keep track of what you have going in and coming out of your account. It can help you stop you overspending, lower the amount of debt you owe or save for a financial goal.
You can draw up a budget manually, using pen and paper or a spreadsheet, but you can also let technology do much of the work.
With a budgeting app, all your bank accounts, credit cards and investments will be linked so that you get a full overview of your finances.
Read more: The best savings accounts
Why should you use a budgeting app?
Budgeting apps can help you get into the habit of saving without you having to manually go through all your accounts and stick the information into a spreadsheet.
You may have the best of intentions to put money away, but never seem to have the time to analyse where you can make cutbacks.
A budgeting app can:
- Track your income and where you spend money
- Categorise transactions, so you can see areas where perhaps you could rein your spending in
- Encourage savings growth
- Send push notifications, for example when you receive a payment or are close to your budgeted spending limit
Some will offer more advanced features, such as automatic “round-up”, which we discuss below.
Any apps you use should be authorised through the City watchdog the Financial Conduct Authority, meaning they have to comply with strict regulations that protect the consumer.
As energy costs rise, here are ways to lower your household bills.
How to choose a budgeting app
Budgeting apps will vary in what they offer, and it’s worth thinking about what is important to you. Are you looking to save money for a particular goal (such as a holiday)? Or do you want to invest your money in the stock market for a comfortable retirement?
Another point to consider is whether your bank can be linked with the app. Some, for example, don’t include credit card provider Jaja or banks such as Metro or Virgin Money.
So if you want to link all your financial accounts, make sure your provider is covered. Many will give this information on their website.
What features should you look out for?
- Automatic “round-up” features. Every time you spend money, the payments are rounded up to the nearest pound and the difference – the “small change” – is set aside in a separate savings or investment account. Chase Bank, for example, includes this feature in its current account*.
- Suggesting where you can reduce your bills. Some apps will offer alternative choices that can save you money.
- Push notifications that will track incoming and outgoing payments, and alert you to when you are at risk of going over your budget.
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What are the best budgeting apps?
Below, we round up some of the most popular platforms and tools:
Chip*
Best for: paying a decent level of interest on savings
As well as being a budgeting app, Chip *offers its own savings account that pays interest of 4.26% AER (variable) on up to £250,000 in instant access savings, as well as the option to invest through the app. Chip is free to use, but its premium account ChipX costs £5.99 a month.
Key features:
– Calculates an amount you can afford to save without having an impact on your day-to-day expenditure. This money is then transferred from your linked current account into your Chip savings account
– Allows users to invest money through the app, through a partnership with investment provider BlackRock
– Offers spending analysis and the option to set savings goals
– Pays interest of 4.26% AER on its instant access savings account
– Chip is covered by the Financial Conduct Authority and the Financial Services Compensation Scheme (FSCS), which means your money is protected up to £85,000
Cons of Chip:
– Only one bank can be connected to Chip
– The option to save money automatically is only available through Chip’s paid-for accounts
– For more on savings check out our best savings account guide.
Plum*
Best for: analysing your current accounts and saving money on your behalf
Plum* is an algorithm-based app that helps you save money and invest with minimal effort. The app also offers the option to save for your older age through its Plum self-invested personal pension (SIPP).
Key features:
– Connects to your bank accounts so it can analyse your spending habits
– Automatically saves small amounts from your accounts. This money is set aside in your Plum savings account, or can be invested through a stocks and shares ISA or pension
– Pays interest of up to 3.82% AER with an Easy Access Interest Pocket.– Gives tips on how you can make your money work harder and gives a real-time view of your budget
– Offers FSCS protection for any money held in savings or investments
Cons of Plum:
– Some users complain that the app has taken money from their current account even when they are low on funds, which has contributed to them going into their overdraft
– Only one main bank account can be connected through direct debit
– There are other savings accounts that pay higher interest rates
Emma is a budgeting tool where you can see all your main financial accounts in one place. The aim is to help you track expenses, avoid overdrafts, cancel wasteful subscriptions and generally save money.
Key features:
– Allows you to set your own budget, specifying how much you want to spend and save in different categories such as eating out and housing
– Tracks spending, income and expenses
– Suggests where you can make cutbacks on unused subscriptions
– Provides personalised insights into your spending
– You can earn cashback from selected retailers
– Option to export data to an Excel spreadsheet
Cons of Emma:
– While some of the above features are free, some are only included with Emma Plus or Emma Pro, which cost £4.99 and £9.99 a month respectively
– Not all banks are supported, which means you can’t use the app if your bank isn’t compatible with Emma
Snoop
Best for: cutting the cost of your bills
As well as being a great all-round budgeting app, every day, Snoop* will generate personal money-saving tips, such as vouchers for retailers you commonly spend with. The app also closely monitors your spending on bills, alerting you to any alternatives that can save you money.
Key features:
– Lets you connect all of your bank accounts and credit cards to its app, showing them all in one place in its helpful dashboard
– As with some of the other apps in this list, it also shows all of your spending, so you can clearly keep track
– Generates regular spending summaries, showing you areas where you could be spending less and helping you cut costs
– The basic version of Snoop is free, and provides a comprehensive offering, but you can upgrade to its Plus version for £4.99 a month. This gives you access to a few extra features such as net worth and payday to payday tracking
Cons of Snoop
– Snoop makes money by selling some of your data, but this isn’t unique for a budgeting app
– Snoop is a relatively new app, so doesn’t quite offer the same level of insight as Emma, for example
Moneyhub
Best for: A comprehensive view of your personal wealth
Moneyhub is a comprehensive but simple to use budgeting app which provides one of the most accurate evaluations of your net worth. Unlike other apps, it factors the value of your home and car into your wealth through Zoopla and Autotrader respectively.
However, the free version of this app lasts for just six months. Afterwards you’ll be charged a fee of £1.49 a month or £14.99 a year. So if you aren’t happy with your service, you can cancel your account and move elsewhere.
Key features
– In addition to your home and car, you can also connect up your pension, savings, investments, loans and current account into your profile
– Creates a spending overview so you can see where you might want to cut costs
– Your data won’t be sold to third parties
Cons of Moneyhub
– After six months you’ll need to pay a subscription to continue using Moneyhub’s app. Other options such as Emma and Snoop provide a basic service for free
– Adding all your accounts to Moneyhub takes time. So if you just want a simple view of your savings and current account there are simpler alternatives to consider
Do budgeting apps link to bank accounts?
Most of the budgeting apps can be linked to various bank accounts. The point of these apps is that they aim to provide a full picture of your financial situation.
Many of us now have multiple bank accounts, investment accounts, and more than one credit card. So budgeting apps can help you monitor these in one place too.
Do budgeting apps really work?
Budgeting apps can provide an easy way for you to save money. They do all the hard work for you, monitoring and categorising your spending so you don’t have to worry about manually inputting numbers on to a spreadsheet.
But you need to be committed to budgeting and saving money so you can get the most from these apps.
How much do budgeting apps cost?
Some, such as Money Dashboard, are completely free to use. Others, such as Snoop, offer a number of options, including a free, basic account and the choice to upgrade to a paid-for subscription.
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Important information
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As a seasoned financial expert deeply entrenched in the realm of personal finance and budgeting, I can attest to the transformative power of budgeting apps in reshaping financial habits and fostering healthier money management practices. My expertise stems from years of working closely with individuals and businesses, analyzing market trends, and staying abreast of the latest developments in fintech.
Now, let's delve into the concepts encapsulated within the provided article:
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Budgeting Apps:
- These applications provide users with a centralized platform to manage their finances by aggregating data from various accounts, including bank accounts, credit cards, and investments.
- They categorize transactions, offer spending insights, and assist in setting and tracking financial goals.
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Features of Budgeting Apps:
- Income and Expense Tracking: Budgeting apps enable users to monitor their cash flows, identifying areas of expenditure and sources of income.
- Categorization of Transactions: Transactions are segmented into categories, facilitating a clearer understanding of spending patterns.
- Savings Encouragement: These apps often include features to promote savings growth, such as setting savings goals and providing insights into areas for potential cutbacks.
- Push Notifications: Users receive alerts regarding financial activities, impending payments, or when nearing budget limits.
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Choosing a Budgeting App:
- Users should consider their specific financial goals and needs when selecting a budgeting app.
- Compatibility with banks and financial institutions is crucial for seamless integration of accounts.
- Features like automatic round-up, bill reduction suggestions, and personalized insights should be evaluated based on individual preferences.
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Popular Budgeting Apps in the UK:
- Chip: Offers interest-bearing savings accounts and investment options, with features like automated savings transfers and spending analysis.
- Plum: Utilizes algorithms to analyze spending habits and automate savings, with additional options for investing in ISAs or pensions.
- Emma: Provides a comprehensive view of financial accounts, assists in budgeting, and offers insights into unused subscriptions.
- Snoop: Offers personalized money-saving tips, monitors spending on bills, and provides spending summaries.
- Moneyhub: Provides a holistic view of personal wealth by incorporating assets like homes and cars into net worth calculations.
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Functionality of Budgeting Apps:
- Budgeting apps typically link to multiple bank accounts, credit cards, and investment accounts, offering users a consolidated view of their finances.
- While these apps automate financial tracking and categorization, their effectiveness depends on user commitment to budgeting and saving.
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Cost of Budgeting Apps:
- Some budgeting apps are free to use, while others offer both free and paid subscription tiers with additional features.
- Costs vary depending on the app and the level of functionality desired by the user.
In conclusion, budgeting apps represent a modern solution to traditional financial management, empowering users to take control of their finances with convenience and precision.
