Ana Savfa for Periscope Post/NY Times writes: Several applications are available to help consumers set up a budget and track their income and expenditures.
There’s something brilliant, but also insidious, about services like
Amazon Prime, where you don’t have to reach for your credit card to pay.
Spending is painless.
Credit cards have separated us from our cash. Services like Amazon Prime, iTunes and others have separated us from our cards. And once we can pay more easily with our smartphones, consumers will experience yet another degree of separation. All of this means that consumers need to work a bit harder to “feel” what they’re spending — and keep track of it. Behavioral scientists will tell you what you intuitively know: Willpower alone will take you only so far, and restrictive budgets eventually fail. But this is the time of year when many people try to get a grip on their spending.
“Look for structural solutions or things that change your environment so you don’t need to be constantly vigilant,” said Stephen Wendel, a behavioral social scientist at HelloWallet, which helps employers provide financial guidance to their workers. “My favorite technology is the automatic transfer, so you don’t see the money in your account.”
There are some new financial apps that try to acknowledge our innate weaknesses as humans, most of whom despise deprivation and keeping tabs on every last dollar spent.
I spent the last week testing several cash management tools, including the newest apps targeting younger generations as well as improvements made by established services like Mint.com that still dominate the market.
A note of caution: To use most of these apps and services, which promise bank-level security, you need to be comfortable entrusting them with the passwords to your financial accounts. To analyze your spending, they need to collect and then ferry data about your income and transactional history into their programs; many rely on established players like Yodlee and Intuit for that plumbing and do not have the ability to move your money. I’ve also listed a couple of more traditional, and more labor-intensive, options.
LEVEL MONEY Less than three months old, this app is intentionally simple: You can’t create fancy charts that categorize every last dollar, nor does it wag a virtual finger to alert you when you’ve spent too much on restaurants in the last month. Instead, it acts as a spending meter or a gas gauge: On the first of each month, it fills up with your estimated income based on your previous history; from that, the app automatically subtracts your recurring bills and a saving rate. (It suggests 7 percent). The app is available for iPhone and is coming soon for Android.
The money remaining is what you can spend, and the app breaks that down on a daily, weekly and monthly basis. The app is connected to all of your credit, debit and banking accounts, so it knows every time you make a transaction and adjusts the money meter accordingly. If you had a day of heavy spending, it will show that you have less to spend for the remainder of the month. “What we wanted wasn’t a budget, but the digital equivalent of opening up your wallet and seeing how much you have left,” said Jake Fuentes, 27, Level’s co-founder and chief executive.
The idea, Mr. Fuentes said, is to focus on decisions in the here and now. It’s that simple — and probably far too simple for many people. The app is geared to people 18 to 35 who are most likely to have less complex financial lives.
You can’t add in your cash transactions and the app won’t work as well for people with inconsistent income and expenses, but the company is working on adding features that will address those issues.
BILLGUARD This app started life as a security service that scanned users’ credit and debit charges for potentially erroneous or unauthorized transactions — a service Target shoppers can surely appreciate now. But last summer, it added a spending analytics tool and personalized savings alerts. The spending feature gives you a snapshot of your monthly spending, though you need be a heavy credit and debit card user for the numbers to have meaning. Every time you swipe a card, the transaction is automatically categorized. It did a relatively good job with the two cards I connected.
The analytics are informative, but one-dimensional. You can compare spending across all accounts with the previous month. You can compare spending across all accounts with the prior month, but the app doesn’t provide insights into spending relative to income. Those features and customizable alerts will be added in coming months. “It will be looking out for you almost like the perfect accountant in the background, letting you live your life and when you go beyond a certain threshold it will let you know,” said Yaron Samid, founder and chief executive. The company is also working on letting users add cash transactions, alerts when users are close to incurring an overdraft fee, and other analytics.
The app, which will be available for the iPhone and Android in February, also searches the Web for coupons that you are most likely to use based on your past spending. The app works for two linked accounts, but there’s a one-time charge of $9.99 for up to 10 accounts. Yodlee handles account aggregation.
MINT For several years now, I have had an on-again, off-again relationship with Mint.com, the automated money-tracking service introduced in 2007 and acquired in 2009 by Intuit for $170 million. If you want to get a better sense of where your money is going, keep tabs on your net worth and chart it all with pie and bar charts for different time periods, then Mint is still the most comprehensive tool on the market. LearnVest, which offers a human financial planner if you want one, has a similarly robust free tool, which I’ve reviewed in the past.
Mint’s budgeting tool sets up a starter budget for you — based on up to three months’ spending history — across various categories from groceries to mobile phones. You can add to the list and customize to your heart’s content. If you spend more than you’ve allotted, you can set it up to receive an email or a text message. LearnVest has its own budgeting tool, which also provides some guideposts: You should spend no more than half of your income on essentials and no more than 30 percent on lifestyle expenses.
Credit cards have separated us from our cash. Services like Amazon Prime, iTunes and others have separated us from our cards. And once we can pay more easily with our smartphones, consumers will experience yet another degree of separation. All of this means that consumers need to work a bit harder to “feel” what they’re spending — and keep track of it. Behavioral scientists will tell you what you intuitively know: Willpower alone will take you only so far, and restrictive budgets eventually fail. But this is the time of year when many people try to get a grip on their spending.
“Look for structural solutions or things that change your environment so you don’t need to be constantly vigilant,” said Stephen Wendel, a behavioral social scientist at HelloWallet, which helps employers provide financial guidance to their workers. “My favorite technology is the automatic transfer, so you don’t see the money in your account.”
There are some new financial apps that try to acknowledge our innate weaknesses as humans, most of whom despise deprivation and keeping tabs on every last dollar spent.
I spent the last week testing several cash management tools, including the newest apps targeting younger generations as well as improvements made by established services like Mint.com that still dominate the market.
A note of caution: To use most of these apps and services, which promise bank-level security, you need to be comfortable entrusting them with the passwords to your financial accounts. To analyze your spending, they need to collect and then ferry data about your income and transactional history into their programs; many rely on established players like Yodlee and Intuit for that plumbing and do not have the ability to move your money. I’ve also listed a couple of more traditional, and more labor-intensive, options.
LEVEL MONEY Less than three months old, this app is intentionally simple: You can’t create fancy charts that categorize every last dollar, nor does it wag a virtual finger to alert you when you’ve spent too much on restaurants in the last month. Instead, it acts as a spending meter or a gas gauge: On the first of each month, it fills up with your estimated income based on your previous history; from that, the app automatically subtracts your recurring bills and a saving rate. (It suggests 7 percent). The app is available for iPhone and is coming soon for Android.
The money remaining is what you can spend, and the app breaks that down on a daily, weekly and monthly basis. The app is connected to all of your credit, debit and banking accounts, so it knows every time you make a transaction and adjusts the money meter accordingly. If you had a day of heavy spending, it will show that you have less to spend for the remainder of the month. “What we wanted wasn’t a budget, but the digital equivalent of opening up your wallet and seeing how much you have left,” said Jake Fuentes, 27, Level’s co-founder and chief executive.
The idea, Mr. Fuentes said, is to focus on decisions in the here and now. It’s that simple — and probably far too simple for many people. The app is geared to people 18 to 35 who are most likely to have less complex financial lives.
You can’t add in your cash transactions and the app won’t work as well for people with inconsistent income and expenses, but the company is working on adding features that will address those issues.
BILLGUARD This app started life as a security service that scanned users’ credit and debit charges for potentially erroneous or unauthorized transactions — a service Target shoppers can surely appreciate now. But last summer, it added a spending analytics tool and personalized savings alerts. The spending feature gives you a snapshot of your monthly spending, though you need be a heavy credit and debit card user for the numbers to have meaning. Every time you swipe a card, the transaction is automatically categorized. It did a relatively good job with the two cards I connected.
The analytics are informative, but one-dimensional. You can compare spending across all accounts with the previous month. You can compare spending across all accounts with the prior month, but the app doesn’t provide insights into spending relative to income. Those features and customizable alerts will be added in coming months. “It will be looking out for you almost like the perfect accountant in the background, letting you live your life and when you go beyond a certain threshold it will let you know,” said Yaron Samid, founder and chief executive. The company is also working on letting users add cash transactions, alerts when users are close to incurring an overdraft fee, and other analytics.
The app, which will be available for the iPhone and Android in February, also searches the Web for coupons that you are most likely to use based on your past spending. The app works for two linked accounts, but there’s a one-time charge of $9.99 for up to 10 accounts. Yodlee handles account aggregation.
MINT For several years now, I have had an on-again, off-again relationship with Mint.com, the automated money-tracking service introduced in 2007 and acquired in 2009 by Intuit for $170 million. If you want to get a better sense of where your money is going, keep tabs on your net worth and chart it all with pie and bar charts for different time periods, then Mint is still the most comprehensive tool on the market. LearnVest, which offers a human financial planner if you want one, has a similarly robust free tool, which I’ve reviewed in the past.
Mint’s budgeting tool sets up a starter budget for you — based on up to three months’ spending history — across various categories from groceries to mobile phones. You can add to the list and customize to your heart’s content. If you spend more than you’ve allotted, you can set it up to receive an email or a text message. LearnVest has its own budgeting tool, which also provides some guideposts: You should spend no more than half of your income on essentials and no more than 30 percent on lifestyle expenses.
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