Getting in control of our finances is something that many of us wish we could do. And perhaps you have tried to do so, many times, but somehow it just doesn’t work?
The good news is that there are now many apps on the market that claim to be able to help you manage your money better. In fact, recent data from Google indicates that the average smartphone user has two or three financial apps and around 73% have used technology to manage at least some aspects of their finances in the past month.
This should come as no surprise: there are apps for pretty much anything you care to name. But can an app really help you manage your money? How does that work exactly? And what about the security of your financial information?
In this article we take a quick look at :
The main aim of a budgeting app is to help you keep track of all your money so that you can make wise spending decisions and stop overspending.
There is some variation between apps as to what they do and don’t offer, but you can expect most budgeting apps to be able to:
Most banks and building societies will offer either a budgeting app or other kind of money management software, which you can link to your bank account. So this is a good place to start.
However, you may want to get the bigger picture of your finances and be able to see all your money from everywhere together in one place. This is now possible too.
In 2018, Open Banking was introduced in the UK. This requires banks and building societies to share customer’s financial data with third parties if you give them permission to do so. This means that if you decide to use a more general budgeting app, rather than your bank’s own, the app will be able to access financial information from all the bank accounts, credit cards and any other investments that you have. You will therefore be able to get a complete picture of your finances.
Some of the most popular apps currently available from both Apple Store and Google Play are:
The Emma app helps you to cut your spending, for example by avoiding overdrafts and finding wasteful subscriptions. Emma claims to be able to make the most of the money you have by eliminating unnecessary expenditure.
Money Dashboard’s stated goal is simply to provide an app that helps you manage your money. It helps you to create a spending plan to forecast and track your budget, though doesn’t make recommendations on where you can save your money: it leaves that up to you. Money Dashboard works on desktop and laptop computers as well as phones.
The main aim of Chip is to help you save money. It does this by analysing how much you can afford to save and automatically moving this into a new linked savings account with Allica Bank. Chip claims that an average user could save around £3,000 a year “Without. Doing. A. Thing.”.
The Plum app is algorithm-based. It aims to help you save money easily by automatically transferring small amounts from your accounts. You can choose whether to invest your money in a Plum savings account, stocks and shares ISA or pension. Plum also monitors your bills and flags up if it thinks you are paying too much and could get a better deal by switching elsewhere.
Another artificial intelligence, chat-style app, Cleo analyses where you are overspending, and recommends where you can make cutbacks. The app can also flag when you are nearing a spending limit, and can offer you a loan of up to £100 which will automatically be reclaimed within 28 days. If you need a loan for longer than this, remember that Minty offers low apr loans which may be able to help.
Most of the above apps are free, though some also have premium versions which you need to pay for but may offer more features and incentives. Also bear in mind that these are only a few of the many apps available, and new apps are being launched all the time. So it is worth having a good browse through the Apple or Google Play store to find the budgeting app that is right for you.
One concern that many people have about Open Banking is whether your financial information is safe. It can feel a bit risky, knowing that your information is being shared with third party apps. So how can you protect yourself?
There are three things that can help:
All financial services providers – including budgeting apps – need to be registered with the FCA (Financial Conduct Authority). This regulatory information, showing the trading name and FCA reference number should be on its website. You can then check the information on the FCA register.
All budgeting apps using Open Banking need to be approved to do so. The vast majority will be on the Open Banking register of approved providers, so the safest thing to do is to stick to providers on this list.
It is up to you what date you want to share with third party apps. And under data protection law, they should only ask to view essential information needed to provide the service they’re offering.
So check what they need, and give them permission to use that information. For example:
You may also want to authorise them to make payments and transfers from your bank account, for example into savings accounts.
So if you are considering using an app to help you manage your money better, we hope that the above information provides a useful starting point.