Apps to Manage Your Finances
CBN.com In case you haven't noticed, a new generation of mobile phones is revolutionizing the way many people are accomplishing common tasks. Droids, iPhones, Blackberries — these are not your father's cell phones. "Smartphones" that can run downloadable applications are capable of surfing the web, playing video clips, even serving as an e-book reader.
And they're making it easier than ever to track one's personal finances on the go. Here is an overview of some of the "apps" leading the personal-finance revolution (all of the apps described below are for Apple's iPhone; some run on other platforms as well).
We'll start with simple "manual-entry" apps. These are great little tools with a significant downside: they require the user to enter transactions by hand, which is a time-consuming process since data entry must be done on the phone itself. Example: if you use your debit card to buy a gallon of milk on the way home from work, you have to input that transaction manually. There's no link to your bank account that causes the purchase info to go to your app.
But the very thing that many users would consider a drawback is the main attraction for those with identity-theft phobia: Because there's no online connection to your financial information, manual-entry apps are highly secure. You don't have to worry about your account data being compromised.
"PocketMoney" ($4.99) and "Ace Budget" ($.99) are two such manual-entry apps. Each bills itself as an "Expense Tracker" — which is an accurate description since that's about all they do. In a nutshell, these apps allow you to set up a simple budget, enter your transactions as they occur, then monitor the results. As long as you're faithful about recording your transactions, you'll always know exactly how much is left in this week's (or month's) spending plan. That's a handy thing to know when you're out shopping.
Ace Budget includes a good set of reporting functions (such as pie charts). PocketMoney has a handy "Beat Budget" display on the home screen that lets you know if you're sticking within your budgetary boundaries. Both apps also have some degree of backup functionality, plus the ability to transfer data in/out of traditional budgeting software such as the now-defunct Microsoft Money.
Bottom line: Personally, I wouldn't go this route because I'm comfortable with Internet-based services and the time-saving features they offer. But if you're wary about online security issues and you simply want to track your cash spending, either "PocketMoney" or "Ace Budget" will meet your needs.
And you can try before you buy: both apps come in free stripped-down trial versions.
The second category of apps I call "linked apps." These apps link to a website that in turn connects to your bank account. Such apps, of course, require you to have an online account with the company offering the app. The two big players in this space are Mint.com and QuickenOnline.com.
But Mint and Quicken aren't actually competitors — at least not anymore. Last fall, Intuit, the company that owns Quicken, purchased Mint. Right now, the company is rebranding various elements of QuickenOnline under the Mint name. So even though I am going to highlight contrasts between the Mint and Quicken apps, the landscape is changing quickly as Intuit's two web-based financial management brands are merging into one.
One big advantage to using either of these apps is that they connect nicely with their respective websites, thereby freeing you from the thumb-numbing practice of having to enter lots of data on your phone. You can set up your budget online and input various bits of data, and the information is automatically reflected in your phone app. (In many cases, the information flow can work the other direction, too — although more-complicated functions such as setting up a spending plan can't be done from within the app.)
Monitoring your spending plan through the app is a snap — if you make most of your purchases with either a debit or credit card. Both Mint and Quicken automatically categorize your transactions based on the vendor's name and/or how you've categorized a similar transaction in the past. (If the transaction isn't assigned to the category you'd like, it's easy to make a change right from your phone's screen.)
Unfortunately, both Mint and Quicken offer limited access to your historical spending data. Mint's app has only the current month's data; the Quicken app has spending data for the current month and the previous month. (This is only an issue for phone apps — online, you can see all your budget history.)
Both Quicken and Mint offer great notification options in the form of emails and push alerts. You can set up custom notices for specific account-balance levels, large or unusual purchases, bill reminders, overbudget alerts, even an alert when there's been a change in your interest rate.
One nice feature in the Quicken app is called "My Wallet." It allows you to manually enter purchases made with cash. If you and your spouse give each other a monthly "allowance" in cash, this is a nice way to keep tabs on where it's going. (Unfortunately, the app allows only one such account, so you can't track your cash purchases separately.) Strangely, Mint has no comparable feature at this point, although the company has announced it will add manual-transaction entry soon.
Other than Quicken's "My Wallet" feature, Mint seems to have greater overall functionality. For instance, while both apps allow you to track your mortgage balance/payments (assuming your mortgage company is supported), only Mint allows you to offset that mortgage with an asset account that reflects the value of your house. Other features Mint offers (and Quicken doesn't) include the ability to track cash flow (you can get a monthly breakdown either by merchant or category), monitor student-loan balances, track tax-deduction data, and budget for annual expenses.
Here's the bottom line for linked apps: If you don't need the multitude of features of a computer-based standalone product and you're confident that data-security issues are well in hand, both Mint and Quicken's phone apps and related websites are great choices — with Mint taking the top spot. Until some of the other online personal-finance players (Yodlee, Mvelopes, Wasabe, You Need a Budget) release apps of their own, Mint.com is clearly the best choice for anyone looking for computer-based budgeting with an app counterpart — especially since QuickenOnline recently closed to new users as Intuit begins moving toward the Mint model.
Over the past three years, Mint has led the way in both online and mobile budgeting innovation. With the resources of Intuit now behind it, I hope Mint will take another revolutionary step by developing fully featured financial management software that seamlessly interconnects with both Mint.com and the Mint app.
But despite being a huge fan of phone apps, I have found that if you're really serious about hitting your spending targets, there's just no substitute for paying with cash. So, my wife Kim and I will employ a hybrid approach, using the envelope system for the basic budget categories and something like Quicken or Mint for the fine detail, account reconciliation, and investment management. Because, in the end, the best system to use is not only the one that you'll actually use, but the one that will get you where you need to go.
Sound Mind Investing exists to help individuals understand and apply biblically-based principles for making spending and investing decisions in order that their future financial security would be strengthened, and their giving to worldwide missionary efforts for the cause of Christ would accelerate. In other words, we want to help you have more so that you can give more.
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