There are hundreds of money-saving, account-monitoring, and banking apps available for both Apple and Android, and they promise everything from helping you save money without thinking about it to allowing you to handle banking tasks at any hour of the day or night.
But are these apps really the greatest thing to happen to banking since the ATM, or are they more trouble than they are worth? Between legitimate security fears about handling money via smartphone and the potential costs in money, time, and data usage to get the most out of these apps, it’s understandable if you feel skittish about downloading a financial app to your smartphone.
So how can you determine if a money app will be a helpful addition to your financial tool kit, or just a time, money, and battery drain? Here’s what you need to know before you download that shiny new money app:
Is Using an App Worth the Security Concerns?
You may be worried about the security of your financial information with an app, and that’s not completely unwarranted. Hardly a few months go by without a story about hacked financial information, so it’s understandable if you feel leery about linking your financial information to an app.
Reputable apps take security very seriously, and they do everything in their power to protect their users’ information. They work to make sure that the risk of a security breach is low, and there is generally a guaranteed recourse for users who do suffer a loss because of hacking.
Know How an App Could Help You
If you have a good handle on your finances without using a smartphone app, and you worry about the security of your information, then it is perfectly reasonable for you to decide that money apps aren’t worth it — and to manage your finances on paper and by spreadsheet.
However, if you are someone who struggles with your finances, then using a money app may ultimately be the less financially risky option. That’s because these apps can help you keep better track of your money and also prevent money-wasting financial mistakes.
While the risk of suffering a loss because of hackers or other security issues is relatively low, you are guaranteed to waste money if you can’t manage it well. If you need the help an app offers in order to organize your financial life, it’s worth investigating the available options.
Know How to Protect Yourself and Your Assets
Despite the apps’ built-in protections, you should still take reasonable precautions. Security experts recommend the following precautionary measures when using mobile money apps:
- Only download apps from sources you trust, such as Google Play or iTunes.
- Keep your operating system up-to-date. The latest software updates for your OS often include security and protection updates.
- Don’t use free, public WiFi to conduct financial transactions.
- Create unique passwords for each financial institution you use.
- Don’t click on strange texts, since this can be a method of hacking your information.
What Problem Are You Trying to Solve?
The sheer volume of different apps available to you can feel overwhelming. While it may seem that having a huge number of choices would be a good thing, it becomes far too easy to just download whatever whiz-bang option sounds the most interesting, rather than finding something that can truly help you manage your money.
Before you start looking at specific apps, figure out what money problem you’d like the app to help you solve. Then you’ll be in a much better position to find the right app for your circumstances — and actually use it.
Here are some of the financial problems money apps can help you solve, and where you can find the best apps to meet your specific need:
You Need 24/7 Access to Your Bank
Paying bills, transferring money, checking your balance, and depositing checks are all banking tasks that no longer require a brick-and-mortar bank office or an afternoon with your checkbook. Most major banks these days have their own app, and having the app on your device can make it much more convenient for you to handle those banking chores that you can never remember to complete during regular business hours.
A very convenient feature that you will find on most mobile banking apps is remote check deposit. You can deposit checks directly from your smartphone by snapping a picture of the front and back of the check — no teller visit required.
To find your bank’s app, check your bank’s homepage for information.
You Need Help Tracking Your Expenses
For many would-be budgeters, making good decisions about your money is straightforward. It’s the tedium of expense tracking that seems impossible. But only through expense tracking can you gain awareness of your spending patterns and habits, which is a key element to adjusting your spending to stay within your budget. Having an app that can handle the expense tracking for you can make adhering to your budget much easier.
Several of the best expense tracking apps are features of online budgeting software, which means you have the ability to look at your finances holistically on your computer, while using the app to help you track expenses. Here are three of the most popular of these programs/apps:
- Mvelopes. This online budgeting program and its associated app automatically track your transactions, and assign each transaction to a spending category/virtual envelope. After a 30-day free trial, the basic program and app have a cost ranging from $4 to $79 per month, depending on the features and services selected.
- Personal Capital. This program and associated mobile app act as an aggregator of all your accounts, giving you the ability to track every penny in your financial accounts, including your bank accounts, investments, credit cards, and mortgage. This program and app are entirely free.
- YNAB (You Need a Budget). This online budgeting program and its companion app allow you to automatically or manually enter transactions before assigning them to a proper budgeting category — and acts as your accountability partner. After a 34-day free trial, YNAB costs $50 per year.
You Need Help Saving Money
Paying yourself first is an important part of healthy money management, but for some people it can feel next to impossible to find money in their budget for savings. Apps that automatically transfer a small amount of money into a savings account can help folks who struggle with saving to amass an emergency fund without feeling deprived. Three of the most popular savings apps are:
- Digit. After you sync Digit with your bank accounts, it analyzes your cash flow, and every two to three days it will determine an amount of money between $5 and $50 that is safe to transfer into your Digit deposit account — so you can save money without feeling it. The program is not technically an app — it communicates with you via text message and you have to sign up online. After a 100-day free trial, Digit costs $2.99 per month.
- Level. This app syncs with your bank account and calculates how much money will remain in the account after it automatically deducts upcoming bills, recent purchases, and your savings goals. Then you receive an estimate of how much it is safe for you to spend for the next day, week, and month. This app is completely free to download.
- Pennies. This app is only available for the iPhone. With it, users can set a number of budgets — like weekly food spending or monthly fun money — with a start date, end date, and the amount available to spend. When you make a purchase, you enter the amount into Pennies, which displays the amount of money and number of days left in that budget. This app has a one-time cost of $3.99 to download.
You Need Help Managing Your Bills
Paying bills has gotten more complex as technology has changed. You probably still receive some paper bills, while others arrive via email, and still others are simply automatically debited from your account. If you have bill reminders sent to multiple email accounts, it can be overwhelming trying to keep up with all of your financial obligations on time.
While several of the expense tracking apps listed above also have the ability to help you manage your bills, the free app Finovera allows you to aggregate all of your bills in one place. It not only reminds you of upcoming due dates, but also alerts you when a bill looks unusually high based on historical data, and when your bank account balances are lower than the sum of your outstanding bills.
Using Technology to Improve Your Financial Life
While it may never have occurred to you to manage your money from your smartphone, it can be a great addition to the tools you already use to take care of your finances.
Taking reasonable security precautions and knowing your financial foibles can help you find the right app to improve your money management skills — right from your phone.