Fintech is all the rage. So what app do I recommend? Watch and find out.
Transcript:
The best personal finance app is the one that you stick with. I know that there are lots of options and that people spend a lot of time looking into personal finance apps but to me, it’s a lot of wasted time. If you’re trying to take control of your money, what you need is a system, not just a tool. Don’t get me wrong, tools are great, but by themselves, they don’t get the job done. If you want to build a house, a hammer is a good tool. But just because you have a hammer, doesn’t mean you’ll build a house. Before you spend hours and months trying out various budgeting and tracking apps, figure out what numbers you need to know each month to keep you in control of your finances. I have a set of questions that I answer each month, about the previous month, to know that my system is up and running right. I have a video on my five question financially fit test, but the quick rundown is that you want to know how much came in, how much went out, that more came in than went out, where all your money went and that it went where you intended it to go. A complete personal finance system will set you up to answer these questions quickly and easily each month. The system will include a hub and process for handling your money and all money related documents, like your bills and mail. A good system will minimize the number of days that your bills are due. Figure out how to line them up so you pay all your bills on one or two days of the month, or if you can charge them to a credit card (this is assuming you never carry a credit card balance because I’d never want you to pay interest on your bills, or anything else for that matter.) A solid personal finance system includes a values-based budget that you absolutely adore. In my experience, people internalize their budget better when they create it by hand, but it doesn’t mean that you can’t then set it up in an app after you’ve tinkered with the numbers until your budget properly accounts for all your money and each of your spending categories. A personal finance system, or routine is another way to look at it, will have you track your spending. I honestly think it’s best to do it by hand for the first few months and then every now and again. Even if you eventually use an app for this, it’s super important to have had the experience of doing it the long way. This gets you better connected to your money and makes it easier for you to make gentle shifts in your spending in the upcoming month. If you don’t want to do it by hand but don’t need or want to deal with an app, I recommend using Google sheets or Excel. If it’s been a few years since you’ve tried either of these, take a deep breath and give it another shot. You don’t need to come up with anything complicated at all in order to simply figure out how much you spent on each spending category last month. Go through the hassle of calculating how much money has come in and how much in total has been spent in a month because it’s really good for your relationship with your money. Get your bank statements to start on the first of the month and end on the last day of each month to make these calculations easier (or even automatic). As you can see, this is a lot more than any app I’ve ever seen. So don’t get bogged down in an app. I don’t think they’re essential and honestly, I believe them to be overrated, at this point. Maybe something amazing will come along and I’ll let you know, but for now, the apps are so easy to set up but for some reason seem hard to stick with. Even I have a hard time sticking with it. They can be helpful for tracking spending if you can figure out how to customize the categories. Sometimes you are able to add categories but not delete the ones that come with it, and that bugs me. You can pay to make them more customizable but I have not seen the value there to make it worth it. I know I’ve already said this, but your relationship with money is healthier, you have a better connection with it, when you roll up your sleeves and get into the nitty gritty of your money, and spend a little bit of time focused on it. Using an app makes tracking go by so fast that it doesn’t really register with you and doesn’t affect you the same way as if you arrived at the numbers by adding them up manually.
I hope you’re relieved of your never ending search for the perfect app because I don’t believe one exists yet, and you’re better off focused on a system rather than a tool.
