Let’s begin with defining ‘Personal Finance’- The term covers the concepts of managing your money i.e. budgeting, saving, and investing. It also includes banking, budgeting, mortgages, investments, insurance, retirement planning, and tax planning. Understanding money management leads to smart financial decisions. For instance, if you know how credit scores work and maintain an excellent score, you will have an easier time applying for loans and getting approval for leases or mortgages than someone who doesn’t. This is where personal financial management comes in. For financial freedom, personal finance has a significant role to play.
Technology and Personal Finance
Technology has taken leaps and bounds over the past decade and advances in the areas of cloud, big data, internet of things (IoT), and AI/ML etc. are paving the way for an entirely new set of trends in personal finance. Personal finance is being transformed by cutting-edge technologies that enable outstanding customer experiences, personalisation, and integrity of financial data.
Managing personal finance is a cumbersome task as most of us struggle to keep our monthly expenditure in check. Mobile App technology in the case could be a major boon. While many of these apps are games and social media platforms, an increasing number have been developed to help individuals with their personal finances. There are a number of applications that allow us to efficiently manage our expenses as well as savings and act as a guide for investments.
Key Benefits of Personal Finance Apps
- Instils good spending habits: By storing data and relevant records, these apps allow you to examine your spending pattern over a period of time including the hidden/unnoticed expenditure. With relevant information, you can rework your budgeting to ensure that you are using money in an optimum manner.
- Provides ease of budgeting: Personal finance skills help you to understand how much you earn, what are your monthly expenses, and help you to budget within that income.
- Gives real-time access to data and information: The personal finance apps connect directly to your financial accounts to pull in account balances and other information such as recent expenses in real time, which helps to track the inflow as well as outflow of money in a better manner.
- Ensures that you achieve your financial goals: When you keep track of your expenditures and your spending patterns, you can easily increase your cash flows, thereby achieve your financial goals.
- Keeps you off bad debts: With the help of personal finance apps, you can review your previous transactions, thus making it easier for you to catch mistakes that can lead to bad debts.
We’ve listed popular money management apps that can help you in your personal finance journey…
- YNAB (You Need A Budget): YNAB is a personal budgeting software platform based on envelope system. The general theory of YNAB is to “give every dollar a job.” Each dollar is allocated to a specific purpose, such as annual car insurance payment, long-term housing repair fund, college savings, etc. The app encourages users to consider recurring expenses every month to prevent spending “surprises” and break the paycheck-to-paycheck cycle.
- Money Manager: The app. facilitates efficient asset management and accounting. It does not just record your money coming in and out of your account but deposits your money into your account as soon as your income is input and draws money from your account as soon as your expense is input.
- Wallet: The app helps you to plan your budget and track spending, so that you stay in control and achieve your future goals. You can actively plan, manage and get a report concerning your finances across multiple currencies, banks and financial institutions. The free account requires you to manually update your spends, but you get a free two-week trial.
- Monefy: Monefy is a great option for people who want a very quick and easy experience. It has a simple user interface that makes navigation through the app very easy. There are 15 categories of expenses, three categories of income and a colourful pie chart of both, so you can track where most of your money is going. This pie chart alone is enough to make you feel guilty in case you are spending way too much on entertainment or dine-out and want to mend your ways.
- Clarity Money: The app keeps a track on your subscriptions and the monthly spending on them. Apart from recommending you to cancel unused or underused subscriptions, the app also keeps a tab on your expenses and offers options to improve the management of personal finance.
Personal finance is a lot easier to control and manage with the help of technology. These budgeting apps should let you manage your money with relative ease. But at the end of the day, it just lists down and shows you where you are and you still need to make financial decisions to help you reach your goals.