Budgeting apps promise to make it easier to track spending, manage bills and pay down debt.
Financial experts say the best tool is the one people will use.
“I am really interested in the AI financing and budgeting apps,” said Jerry Xia.
What budgeting apps do
Budgeting apps can track spending, monitor bills, set category limits, and manage subscriptions. Some also help users build savings and reduce debt.
“There are tools out there that you can enter things yourself and it will track right on there,” said Bob Ingram, a certified financial planner with Center for Financial Planning Inc. “There are also tools that we can connect right to our bank accounts, right to credit cards and statements.”
Choosing the right app
A search for budgeting apps turns up dozens of options, including Rocket Money, EveryDollar, Albert and Monarch Money.
“It depends on what you are looking for. Do you need a lot of features? Do you need a lot of control?” Ingram said.
Some apps offer free versions, while premium plans often cost $10 to $20 per month.
“Just like any cost, it becomes part of your budget,” Ingram said.
For some users, the added expense is worth it.
“I just realized through the app, I was spending way too much money,” said Ronan Plunkett. “It makes everything super organized.”
A closer look at spending
After hearing Plunkett’s experience, I tried Rocket Money by linking my bank and credit card accounts. The app quickly highlighted spending patterns across dining out, Amazon purchases and recurring subscriptions. It also showed how quickly small purchases can add up.
“You’ll oftentimes talk to folks who say they’re not big spenders and don’t spend a lot,” Ingram said, noting that many are surprised when they look at their income and overall spending throughout the year.
Technology can’t change behavior
Financial planners say budgeting apps provide useful data, but they cannot change spending habits.
“Money behaviors are still money behaviors. And regardless of whether we can track something or not on a budget, we’re still going to have spending decisions driven by emotions and thoughts. And that’s probably not going to change,” Ingram said.
Read the privacy policy
Experts say privacy should be considered before linking financial accounts to budgeting apps.
Before connecting accounts, users should review terms to understand how data is collected, shared, and used.
If the language is difficult, AI tools may help summarize and explain it.
More information on the pros and cons of using finance apps can be found here.