Budgeting apps can help take the guesswork out of monthly spending
TORONTO — Before Jordann Brown downloaded Mint, a free budgeting app, her attempts to aggressively pay down debt were hindered each month by unexpected expenses that would throw off her budget.
"Mint helped me build a cushion in my cash savings to ride out those financial ups and downs," she said. "[The app] has definitely helped me stay on track with my monthly budget, which in turn has helped me meet my major financial goals, like becoming debt-free and saving an emergency fund."
The 31-year-old Halifax-based content manager at Zolo.ca says that for those struggling to meet their financial goals or keep their spending under control, a budgeting app can be an excellent tool to use.
Budgeting apps can help automate the tracking of your spending and offer a big picture view of how you are doing when it comes to your financial goals.
Aashti Vijh, a 29-year-old senior communications and marketing specialist at Ratehub.ca in Toronto, uses the pro version of the budgeting app Dollarbird, which costs around $40 per year. She started using the app in late 2017 after moving out of her parents' place.
"I realized I didn’t really know where my money was going every month. I knew I was generally within a budget, but I didn’t know specifically, for instance, how much money I was spending on buying lunches at work or what percentage of my income was going towards rent," she said.
Vijh said that with the help of the app she is now in greater control of her spending, especially when it comes to ordering from or eating at restaurants.
"I found that I was doing a lot more of that before I started Dollarbird and now I’m a lot more mindful," she said.
Vijh said when you open the Dollarbird app it shows a monthly calendar that you then click on to input your expenses. You can either input these expenses manually as they occur or set up a daily push notification to remind you to track daily expenses.
“The actual act of inputting my expenses every day has made me so much more mindful about what I’m spending. Compared to other budgeting apps, which link to your bank accounts and categorize your expenses for you, Dollarbird allows you to be proactive with your finances instead of reactive,” she said.
Like Brown and Vijh, Alexandra Bosanac, a 34-year-old Toronto-based content manager, wanted a better handle on her cash flow so she started using the budgeting app You Need a Budget (YNAB) in 2017.
"I wanted to feel greater control over my finances. I was afraid to spend money and I felt like this is just not a sustainable way to live," Bosanac said. She wanted a better idea of just how much money she could realistically spend each month without overspending.
What Bosanac likes about the app is that every dollar is assigned a category, but it’s simple enough to switch categories if needed. For instance, if she wants to spend more on a weekend excursion, she can reallocate some money out of one of her various "sinking funds", which she uses to save for shoes or clothes that don’t qualify as monthly expenses.
Bosanac pays about $120 annually for the service but said that it’s helped her save thousands of dollars, so she considers the expense worth it.
However, she said using YNAB was very intimidating in the beginning and there was a bit of a learning curve. Bosanac advises others trying out budgeting apps for the first time to not give up easily if they encounter frustration or resistance.
"It’s normal for it to be confusing in the beginning," she said. "And, if the first app you try isn’t the right fit for you, try another one."
This report by The Canadian Press was first published Oct. 12, 2021.
Leah Golob, The Canadian Press