Do budgeting apps really work?

Yes, budgeting apps really work if you stay committed and use the app to identify changes you can make to improve your finances. In fact, 88% of people who use budget apps say they are either very helpful or extremely helpful, according to Academy Bank.

Budgeting apps can help you track your expenses and provide insights into your spending habits, allowing you to manage your money more effectively. Most people recognize the value in that, especially when times are tough financially. For example, more than 2 in 3 people say budgeting better is a top priority, according to a WalletHub survey.

What Budgeting Apps Can Help You Do

Make a Budget

Budgeting apps provide a template that you can use to make a budget. Some budgeting apps focus on one budgeting strategy, while others offer multiple strategies that you can base your budget on.

On WalletHub, for example, you can create a simple budget using only your income and expenses, or you can build a budget based on the 50/30/20 rule, the pay-yourself-first method, envelope budgeting, or micro-envelope budgeting. You can also do zero-based budgeting by referencing the “Remaining” field under the budget summary on your account.

Track Spending

You can track where your money goes with a budgeting app. Some apps, like WalletHub, allow you to sync your financial accounts to have your transactions automatically tracked. This saves you from having to spend time manually inputting the transactions.

Analyze Your Spending

Budgeting apps typically provide spending reports that show you exactly where your money is going, so you can identify spending patterns and see where you may need to cut back.

Set and Track Savings Goals

Many budgeting apps, including WalletHub, offer a feature that allows you to set and track savings goals. You can use it to monitor your progress on the way to goals such as saving for a car, making a down payment on a home, building an emergency fund, or any other financial goals you have.

Manage Debt

You can use budgeting apps to manage your debt. For example, WalletHub will help you come up with a debt payoff plan that gets you out of debt as quickly and inexpensively as possible.  

When Budgeting Apps Don’t Work

Budgeting apps don’t work if you don’t actively engage with them. For example, if you use the app once to set up a budget and never go back to it again, you may not see any improvements in your spending.

On the flip side, you may not see as much benefit if you rely too heavily on the app’s automation and notifications to do everything for you. If you don’t actively review your budget on a regular basis, you won’t be fully aware of what’s going on with your finances.

Similarly, budgeting apps may not work for you if you are not tech savvy, as you may have trouble navigating all the features. And if you are only tracking expenses, rather than planning out the best way to use your income before you spend it, you won’t be getting the full benefit either.

To get the most out of a budgeting app, you need to regularly go in to review your budget and analyze your expenses. This can help you identify changes you can implement to reduce your spending, if necessary. To learn more, check out WalletHub’s guide on whether budgeting apps are worth it and our picks for the best budgeting apps.