These Are the Only Three Money Apps You Need.
How many money apps do you have? It turns out that the ideal number could be three: a budget app, an investment tracker, and a credit monitoring service.
In Business Insider, Eric Rosenberg explains that these three apps are “the three most important tools I use to manage my personal finances, whether it’s a laptop or mobile apps on the go.”
I also have these three apps, and I agree with Rosenberg: With a budget app, investment tracker, and credit monitor, you have a great understanding of not only where your finances are today, but where they might lead you in the future. …
That’s why.
Budgeting apps keep you from overspending
The budget app keeps track of your income and expenses, alerts you when you start to overspend, and lets you monitor your total net worth. Rosenberg uses Mint , but I prefer YNAB – his give everyone a dollar to work system has revolutionized the way I think about my finances, and my net worth has grown by $ 27,000 since I started using the app six months ago.
The main reason I prefer YNAB Mint (I’ve tried both) is because YNAB forces you to deal with the impact of your spending. We all overspend our budget from time to time, but when you overspend with YNAB, the app asks you to immediately rebalance your budget with money that you planned to spend in the future. That extra dinner this month could mean less money in your budget for next month’s clothes, for example.
On the other hand, if you spend less than you planned, this money will go to the budget for the next month. This means you may be saving on a special treat, or decide it’s time to move that money from eating out to “vacation” or “investing.”
Investment trackers encourage you to invest more
There are three main reasons why my net worth has grown by $ 27K in the last six months:
- As a freelancer, I am always looking for ways to increase my income.
- YNAB helped me determine what expenses I can cut from my budget.
- By making more money and cutting costs, I put a lot more money into investments.
This is where an investment tracker comes in. I am using the Vanguard app and Rosenberg is using Personal Capital . Both tools track the return on investment and portfolio performance, and Personal Capital has several additional features such as the ability to set spending and savings goals.
Even though my investment tracker doesn’t have a goal setting feature, I’m still encouraged to invest more money just by installing the app on my phone. When I review the app and see how my investments have grown over time, I get a dose of positive reinforcement and a reminder that the more I invest, the more my capital stock and more room to grow.
If the market is down and my investment value is down, I see it as a reminder that the stock is on the market today – so why not take advantage of the best deal?
Credit Monitors Save You Money By Helping You Improve Your Credit
According to Capital One’s CreditWise app, my credit rating is currently 796 or Excellent. This app warns me of any changes in my loan, as well as the reasons why my credit rating may have been increased or decreased – my credit rating recently dropped by 12 points, for example, when I increased my total loan utilization from 2% to 4% ( that is, I put another $ 1000 on my credit card to cover the upcoming vacation).
It doesn’t really matter; I’m going to pay off my credit cards in full, as I do every month, and my credit score will return those 12 points in a week or two.
But if you are applying for a mortgage or car loan, or are in a situation where every credit point matters, having this information at your fingertips can help you make the choice that will bring you the highest credit rating possible. This, in turn, can bring you a lower interest loan and save you a lot of money in the long run.
Rosenberg uses Credit Karma to track his credit, which offers a similar service – and in addition to tracking your credit score, these apps also alert you when your credit changes in a way that suggests someone might be trying to steal your identity.
“I’m a little money savvy,” Rosenberg writes, “so I like to see a lot of details about my finances. I keep all three of these websites in a bookmark bar so I can get to them with one click. “
I have apps both on the bookmark bar and on my phone – not only to access them with one click, but so that whenever I pick up my phone to check the weather or listen to a podcast, I I get the following little visual reminder that I am the person who makes the budget, invests and keeps track of my finances.
Which, in turn, reminds me to check my apps and see how my money goes.