(Tiny Tips) – Using Budget Apps makes setting and managing a personal budget easier, faster, and more accurate because income and expense transactions are automatically drawn from each of your financial accounts. The software can give you insights into your spending habits over time, broken down by spending categories. You can also enable alerts when your budget is about to be exceeded.
When choosing a Budget Apps tool, make sure it meets your specific needs. Consider these features when weighing your options.
Tips for Choosing Budget Apps
Flexible budget categories
Categories help define income and expenses in Budget Apps. They form the basis for your budget. The software you are considering should allow you to change categories by editing names, deleting irrelevant categories, and adding your own. Avoid budgeting software that locks you into predetermined income and expense categories and doesn’t allow for changes.
In the software, you can assign categories to the transactions you make throughout the month. It is important to take these category assignments seriously. The more accurate a budget report is, the more useful it will be. If you want more detailed reporting, you should be able to break down transactions into subcategories.
Customizable income and spending limits
Everyone has fluctuating expenses. Heating bills are usually higher in the winter. One’s exact monthly income may increase or decrease depending on the industry’s peak season. If you have to deal with fluctuating income, you need Budget Apps that doesn’t force you to enter the same monthly income amount.
A great way to manage your income or expenses that vary from month to month is to use envelope budgeting software. To manage fluctuating expenses, an envelope budget is created. Software that works on this principle carries forward unused funds in expense categories to the next month. Envelope Budget Apps also automatically distributes paychecks in budget categories to reflect how you want to spend your money.
Simple budget report
The budgeting software you choose should have some simple reports that show how well you’re sticking to your budget each month, quarter, and year. If you want to keep tabs on your spending, make sure the software offers weekly reports or a real-time dashboard that gives you at-a-glance reporting on key budget categories. Simple reports show budgeted amounts, actual expenses, and the difference between the two. You should be able to change the time range of this report.
It’s important to find software that has simple budget reporting. However, there may be times when you need more detailed reporting, and a good Budget Apps should offer this option. Also note this option if you want to print your budget report, as some software programs only offer screen-based reports.
Financial information security
Data encryption is a must when linking accounts to budgeting software. The only type of software that doesn’t do this is software that requires you to enter transactions manually. Read the privacy or security statement of an affordable software to learn more about how your data is accessed and whether it is protected by encryption.
Security isn’t an issue if you set up your account with a common name like “Checking” or “MasterCard.” These general accounts don’t have access to your account or personal information. Therefore, even if your Budget Software account is hacked, your identity cannot be stolen. The disadvantage is that these universal accounts are less convenient as they do not have credentials to automatically download transaction data.
Some desktop Budget Apps may not require a password. If you use software that does not require a password to access, password protect your computer. Your computer should ask for your password at startup and after sleep. Online Budget Apps should always require a password. Please do not use online financial software without a password!
Ability to export your data
Most Budget Apps allows you to export your data to a CSV file so that it can be easily read by spreadsheet programs like Excel. This feature is especially important if you’re concerned that you won’t be using the software long-term. If you decide to switch to other budgeting or personal finance software, saving your data in CSV, QIF, or other formats can save you time in data entry.
While spreadsheets are less common among casual budgeters, they can be an important tool for those who are serious about financial analysis. If this applies to you, you should pay special attention to the software’s export options.
Easy to set up
This might surprise you, but ease of setup isn’t as important as the other features mentioned above. Once you determine your budget, there’s nothing else you need to do except make some small tweaks here and there. While the initial setup is a bit cumbersome, it probably won’t affect your long-term experience with the software.
However, if the onboarding process is too confusing, you may end up making mistakes that can lead to problems down the road. The best way to determine the usability of your budgeting software is to take advantage of the free trials that are available. If you don’t fully understand the software settings, it might be time to switch to another application.