Not too many years ago, you would have needed to carry a notebook and pen with you to track your spending. Every time you wrote out a check or had money deposited into your account, you would need to make a note of it. Many of you will have tried this approach, a certain percentage of which would have ended up throwing that notebook in the trash and trusting luck instead! Move forward a few years, and we were provided with online banking services, that meant we could check our account balances wherever we might be. Move forward a few more years, and you can now choose from a wide variety of financial planning apps. However, are they as good as the marketing guys are telling you?
The Different Types of Apps Available for Managing Your Finances
There is a range of different apps you can download. Some you will have to pay a fee for, and some will be free. They can be categorized into the following types:
- Budgeting – to help with tracking and categorizing your spending.
- Savings – these can be used to help you put aside money every month.
- Investment – for building an investment portfolio and making trades.
- Bills – used for managing, negotiating and canceling bills such as your utilities and cable.
- Taxes – there are apps which can make preparing and filing your taxes easier. However, if you’d prefer your taxes were calculated and filed by a person, companies such as Tax Return can help.
The Benefits of Using Personal Finance Software
- Automated alerts when bills are due which reduces the number of late payment fees
- You can categorize your spending
- Helps you to achieve your financial goals and avoid temptations
- Allows you to take back control of your finances
- You can easily track your progress towards certain financial goals
- You can take it with you wherever you go, and data is updated instantaneously
The Disadvantages of Using Financial Apps
- Your sensitive information is at risk of being stolen
- Be wary of fake apps
- Should not be used a replacement for offline checks
- Your mobile device could be stolen
- Read-only access is not 100% secure
There’s no denying that personal finance apps can make life much easier. However, they have to be used sensibly, and you need to be aware of the risks involved. Don’t use public wi-fi networks when doing anything that involves your financial information. Weigh up the risks before downloading an app that requires your bank login details or any other personal information. They have come a long way in a very short space of time and can provide you with an amazing array of features, but you still need to be careful. As well as helping you to achieve your financial goals, they will make your life easier. Linking the apps to your accounts means all the information you need is at your fingertips, 24 hours a day. Don’t forget the words of caution and access that information when your network is secure. Never share your passwords with anyone, and make sure your mobile devices are secure and protected at all times.