Most of us have tried and failed to stick to a monthly budget at least once in our lives, and many of us have come to have a strong dislike for the word “budget” as a result.
But we all have important financial goals that we want to achieve, and one way or another we need some kind of system that helps us both put money towards those goals and have enough for daily necessities.
There are a lot of budgeting apps that can help you do this and today we’ll look at two of the major players: Mint and You Need a Budget. They have very different approaches to budgeting and this should give you a better sense for which app is right for you.
Mint has been around for years and, in my experience, seems to be the most widely used budgeting app.
One of Mint’s big draws is that it’s free. They make money through ads and by recommending financial products — like banks and credit cards — which certainly has its downsides. But there is no cost for just using the budgeting app.
It’s also very good at helping you track your spending. You link all of your accounts, Mint automatically pulls in all of your transactions, and all you have to do is specify which budget categories they fall into. You can then track your spending in each category as you progress through the month, and you can also look back at past months to get a sense for your average spending over time.
The biggest downside is that Mint doesn’t do much to help you plan ahead for irregular or one-time expenses, and it isn’t great at navigating the natural ebb and flow of month-to-month spending. Your budget is fairly static, which doesn’t always fit the realities of life.
In the end, Mint is a good tool for someone who consistently and comfortably spends less than they earn, has automated their savings and is on track for their major goals, and wants a simple way to make sure that they’re staying within some general spending limits.
If you’re looking for something that helps you be more proactive with your money, or that simply helps you stay on top of a tighter budget, you may need to look elsewhere.
You Need a Budget
Like Mint, You Need a Budget — or YNAB for short — allows you to connect your accounts and then it automatically pulls in all of your transactions for you to categorize. And like Mint, you can set up a monthly budget, track your progress as you move through the month, and review past months to understand your average spending.
But YNAB has a few additional features that allow you to do much more than simply track your monthly budget:
- Virtual savings accounts — YNAB’s categories can be used as virtual savings accounts in addition to monthly spending budgets. For example, you can budget a certain amount of money for “travel” each month and just let that category accumulate until you need it. You can do the same thing for necessary but irregular expenses like home maintenance and car repairs. This eliminates the need to have multiple savings accounts for multiple goals and it allows you to proactively plan for irregular expenses that might otherwise bust your budget.
- Flexibility — If you overspend in a certain category, it’s easy to pull the money from a different category right in the app. And if you underspend one month, that extra money rolls over to the next month’s budget. These tools give you the flexibility to manage the natural ebbs and flows of month-to-month spending.
- Getting real — Rather than simply creating a hypothetical budget based on expected future income, YNAB has you budget only with money you actually have in the bank right now. This can be frustrating as you start out, but the end result is a more realistic budget that allows you to make real progress towards your most important goals.
The big downside is that YNAB costs money. Currently there is a 34 day free trial, after which it costs $83.99 per year.
It’s a worthwhile cost if it helps you take control over your money, make progress towards your goals, and reduces your financial stress. But for some the cost might not be all that valuable.
The truth is that there’s no “best” app for everyone. There are other budgeting apps — like Mvelopes, Clarity Money, and others — that may be worth checking out depending on what you’re looking for.
Between the two big options, Mint is best if you simply want an easy way to keep track of how much you’re spending, and YNAB is better if you want a complete system for managing your spending and savings.
Image courtesy of: https://lifehacker.com/adult-budgeting-101-how-to-create-your-first-budget-in-1440446091