In the five years since Apple launched its iTunes app store the app market has soared and now there seems be an app for literally everything. Though statistics vary between Apple and Android, the biggest share of the app market are books, entertainment and games. Although personal finance apps do have a long way to go – currently accounting for between 2 % and 4% of the market – in the past 18 months there has been a sharp rise of personal finance apps. The increased popularity of personal finance apps shows there’s a need, but can they successfully help you to manage your finances?
Money management apps don’t allow you to move your money around or make payments, instead it allows you to track your bank accounts, credit cards, loans and investments by bringing them all into one place. There are many on the market such as Pageonce and Money Smart with Mint leading the market. The power behind these apps isn’t bringing in the account but its use of analytics.
They are able to uses your financial activity to analyze you spending habits in different categories, charting information of your financial history. They can set up budgets and keep track on any overspend in certain categories or warn you if you’re reaching your credit limit or if there’s been any unusual spending.
Worth it? The only other way you can get such as comprehensive overview of your finances is with an excel spreadsheet and frankly who’s got time for that?
There has recently been a surge high street banks launching apps. Banking apps do vary from a specialist app with Barclay’s Pingit to HSBC’s which is simply a link to their standard online banking system. They all offer similar functions such as balance notification, mini statements, simple bank transfers and request overdraft extensions. Used in conjunction with a personal finance app, you should be able to have full control of your money.
However, there are security concerns – for example on Smartphones customers cannot open another app whilst logged into online banking which reduces the risk of viruses or hacking. iphones on the other hand allow more applications to open at the same time, increasing this risk.
Worth it? Used alongside your financial management app, it gives you a lot of control over your money but do check what your bank’s policy is if you fall victim to mobile fraud and their policies on ‘reasonable care’ of their service.
If you’ve decided to use a combination of money management and banking apps but you’re also in debt, it’s worth complimenting them with a debt management app. Like Money Management apps, these apps being everything into one place to help you to organise, track and pay off debts. Apps like Debt Payoff Planner and Debt Manager use the ‘Snowball’ method which calculates the smallest debt first (according to balance and interest rate) and tracks your progress.
Worth it? Like the money management app this gives an overview of your debts. Many people find being able to visualise the debt makes it less daunting and more goal-orientated.
Do finance apps work?
As with any app, just because you’ve downloaded doesn’t mean you’ll use it. The average person had up to 110 apps on their phone but only a small percentage are used on a regular basis or in the long term. So here are some final dos and don’ts:
- Don’t be afraid to experiment and test apps to see if it works for you
- Do ask advice from friends and read reviews on the app
- Do compare apps – there are many similar ones out there, do your homework and make sure it’s right for your circumstances
- Don’t forget to keep your account information secure