Budgeting Apps For Better Money Management (And Less Stress)
Financial stability can be challenging to maintain in today's fast-paced world. From juggling expenses to managing debt and planning for retirement, most families and individuals face economic hurdles throughout life in the quest for financial well-being. Recent data shows these hurdles can result in significant stress—54% of respondents in a 2023 Forbes Advisor survey reported often or always feeling stressed about their debt. The same study revealed that nearly 60% of respondents had disagreements within their relationships that were related to financial stress.
Despite the challenges, there are ways to gain control over your finances and reduce money-related stress. This article discusses how budget apps can help people foster better financial habits and savings goals, how to find a budget app that fits your needs, and how to cultivate better fiscal health. We'll also provide tips for caring for your mental health during stressful times, including seeking in-person or online therapy.
Budgeting and economic literacy for financial and mental wellness
Financial literacy can be seen as a fundamental building block in establishing financial well-being. When individuals learn to budget and manage money, it can reduce stress, create a sense of security, build self-esteem, and increase confidence. Conversely, a lack of understanding can lead to poor financial habits that can contribute to stress, leading to mental health concerns like anxiety and depression. Budget apps are one of many financial education tools that help people learn to manage their money wisely and build economic resilience.
How a budgeting app can boost your net worth while reducing your stress
A good budgeting app can simplify the financial management process, streamlining how you track expenses and manage your accounts. It can also provide a clear picture of your spending habits so you may identify areas to cut back and allocate more money toward savings and debt repayment. Most apps have all of these functions (and more) to give you more control over your finances and eliminate the anxiety of not knowing where your money is going.
Setting goals, monitoring financial accounts, and paying off credit cards: Core features of popular budget apps
Like all budgeting tools, budget apps should allow you to track your income and expenses, make informed decisions about where your money goes, and help you create plans to achieve your financial goals. Other standard features of budgeting apps include, but aren’t limited to, the following:
- Expense categorization: Automatically or manually sorts transactions into categories like groceries, utilities, and entertainment
- Push notifications: Alerts users of important financial activity, such as bills or suspicious activity
- Security: Secure storage services to protect users’ information
- Customized financial reports: Visualizes spending and income statistics
- Investment integration: Provides insights into portfolio performance and asset management
- Bank account integration: Integrates with the user's bank and other financial accounts
- Payment reminders: Sends reminders to insert information or notify the user that a transaction has been tracked
The best budgeting apps for money management
Whether you’re looking to track expenses, save money for a big purchase, pay off debt, or plan for the future, choosing the right app means reflecting on your financial goals and habits. When shopping for apps, consider their features, ease of use, subscription costs, and other features that accommodate multiple needs.
YNAB (You Need a Budget) for zero-based money allocation
A zero-based budgeting approach proactively assigns a purpose to every dollar you make. The result is often a more conscious approach to tracking spending and prioritizing financial goals, with an emphasis on breaking the “paycheck-to-paycheck” cycle. Some users say YNAB helps them manage their money and is a good tool for becoming mindful of how you integrate your spending with your lifestyle. YNAB is a paid app, but it offers a 34-day free trial to see if it’s right for you.
Honeydue budgeting app for couples
Honeydue is a free app designed for couples to manage their finances together. It lets users link their bank accounts, credit cards, and other financial accounts. This enables shared expense tracking and financial visibility, facilitating communication about spending and joint savings goals. This app can create customizable reports, making it easier for partners to monitor their spending and reduce financial stress and disagreements.
Monarch Money for managing multiple financial accounts
Monarch Money offers a variety of features, including budgeting tools and expense and investment tracking. It allows users to link multiple accounts, such as bank accounts, credit card accounts, savings accounts, investments, loans, and cryptocurrency accounts. You can integrate custom categories into your budget, set up rules to recategorize transactions if needed, and use diagrams and charts to easily monitor spending. This app also allows you to sync investment holdings, analyze historical performance, and collaborate with a financial advisor or partner at no extra cost.
Goodbudget for envelope budgeting and paying off credit cards
Goodbudget is another of the free budgeting apps with a paid upgrade feature. It uses a simple, cash-based spending structure called the “envelope budgeting method” (great for college students, families, and everyone in between), which allocates specific amounts to different spending categories. Traditionally, envelope budgeting involves dividing your income as cash into separate envelopes by category according to what you owe. The app uses the same concept but with a digital envelope system. The app is free and ad-free, with many of the same features paid apps offer, such as income, expenses, debt trackers, and reports that clarify your spending habits.
Empower for keeping track of your net worth
Formerly Personal Capital, Empower creates budgets, monitors cash flow, and helps you build savings. It also provides investment portfolio tracking, offering users custom projections for retirement spending, income, and investments. It compares your portfolio allocation to a target allocation and helps you view your net worth and track your progress toward your retirement goals. Empower also offers cash advances up to $350 and a scheduled repayment plan fitting your budget.
Making the most of your budgeting app
Choosing the right app is the first step toward digital budgeting tool success, but to make the most of your app, you must use it regularly by logging in and updating your activity. Most apps guide you through creating a budget that aligns with your lifestyle and income. Use the app to set financial goals, review your spending, and adjust your budget based on life changes. Take advantage of features like account linking, custom categorization, and alerts for approaching spending limits.
How financial stress affects mental health
Financial stress can have a significant impact on mental health. It can contribute to anxiety, worry, and even panic. For those working with less income, becoming economically stable can seem overwhelming and, at times, hopeless, possibly leading to depression. People who are unemployed or don’t earn enough to cover their expenses may feel shame or guilt. For many, financial distress can make it challenging to sleep and may interfere with other areas of life.
Additionally, some people experience physical symptoms of money-related stress, such as headaches and migraines, high blood pressure, and digestive issues. Financial stress can even compromise your immune system, potentially making you more susceptible to illness.
Caring for your mental health
Worrying about mental health can seem overwhelming, especially when combined with worrying about finances. However, since the two are often tied together, it can be important to create a balance by caring for them both.
Self-care practices, like engaging in regular physical activity, nutritious eating, and getting adequate sleep, can lay the foundation for cultivating solid mental health. Find healthy coping mechanisms such as meditation, yoga, deep breathing exercises, and spending time in nature.
Practicing gratitude and focusing on the positive aspects of life can significantly impact your mental health, too. Additionally, regardless of what causes stress, building and maintaining social connections can be a key part of mental well-being. Spend time with supportive friends and family members. Engage in activities that align with your interests and connect you with others who have similar passions.
Societal stigma about mental health and financial challenges can lead some people to feel uncomfortable confiding in others about their circumstances. In many cases, people choose to seek help from a mental health professional who can listen without judgment and provide guidance on how to cope with the everyday challenges of financial stress.
Therapy options on a budget
Despite the benefits of counseling, price can seem like a deterrent to getting help, especially if your insurance doesn’t cover therapy or your therapist doesn't accept insurance. However, there are budget-friendly options that make it possible to attend therapy without breaking the bank. Research reveals that online therapy is more affordable for many and offers treatment on par with traditional approaches. For example, a 2021 paper published in the Journal of Affective Disorders reported that 81% of the interventions reviewed were cost-effective, with favorable outcomes for treating depression and anxiety.
Some online therapy providers, like BetterHelp, add a feature where individuals can apply for assistance from a professional on a sliding-scale fee structure. BetterHelp also allows individuals to access therapy on their schedule from any location with internet or wireless phone service. Additionally, many people prefer attending sessions from the safe space and comfort of home rather than traveling to and from a brick-and-mortar office.
Takeaway
Is it worth using a budgeting app?
If you have trouble keeping track of your monthly expenses and monthly spending manually, then using a budgeting app could be worth it for you. A budgeting app can help you stay aware of your financial health, upcoming expenses, credit scores, and more. Some apps may have features like an investment tool, bill negotiation, free credit reports, the ability to categorize expenses, and analyses of your spending patterns.
Is Mint a trustworthy budget app?
Mint was generally viewed as one of the top budgeting apps, with most people considering it trustworthy. However, it shut down in March of 2024. Intuit, the company that owned Mint, suggested users move to the Credit Karma app.
What are the cons of budgeting apps?
While there can be many benefits to using budgeting apps, there may also be drawbacks. For example, they can be confusing for people who aren’t tech-savvy. There may also be a risk of hacking or data breaches, potentially resulting in your financial information being stolen. However, many apps have security features to decrease this risk, such as multi-factor authentication.
How much is a good budget app?
Many budget apps have both a free version or basic version and a paid version. Depending on your needs, you may not have to pay anything to use a personal finance app.
What is zero-cost budgeting?
Zero-cost budgeting or zero-based budgeting is most frequently used by businesses, but it can also be used for individuals and families. The goal of zero-cost budgeting is typically for your income minus your expenses to equal zero by the end of the month.
What is the number-one budgeting app?
One of the most highly-rated budgeting apps is You Need a Budget or YNAB. It uses the zero-based budgeting system, encouraging users to make a plan for each dollar they earn and assign money to bill payments, savings, debt repayment, or spending. It’s available on multiple devices and allows users to link their checking and savings accounts, making it simple to keep up with their account balances and financial data.
Why is YNAB better than Mint?
Although Mint is no longer available, YNAB was sometimes seen as a better choice because of its customizability. It’s frequently recommended for those focused on budgeting.
What is the 50/30/20 rule?
The 50/30/20 rule of budgeting suggests that individuals put 50% of their income toward necessary expenses, 30% toward discretionary spending, and 20% toward savings. While it may not be right for everyone, it’s a simple rule that can provide a framework for those starting a budget and desiring more financial freedom.
What is the easiest budget method?
A few of the easiest budget methods are the zero-based budget (in which your income minus your expenses equals zero) and the 50/30/20 rule. Another option is the envelope budget, in which you plan your spending for the month and fill envelopes with the specified amount of cash that you plan to spend in each category (for example, groceries, entertainment, and rent).
What is the safest budgeting app?
The budgeting apps that keep your data the safest may be Expense IQ Money Manager and Bluecoins Finance and Budget. Some of the apps that are considered less reliable include NerdWallet and EveryDollar.
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