Fact: You need to use a budgeting app to stay on top of your finances. A money management app allows you to track your income, expenses, net worth, and more. It also helps you stay within the budget you set, making sure you won’t go crazy with your credit card and spend more than you make.
I’ve tested what felt like every single budgeting app out there over the last decade. Some are good, others not so much. Some are free, while others cost a small fortune. My conclusion is this: there’s only one that really stands out and is in a class of its own, and it’s called YNAB.
The best budgeting app: YNAB for the win
YNAB, which stands for You Need A Budget, has a very focused approach to money management. Instead of just giving you the tools to track your expenses and leaving you to your own devices — like most other apps do — it gives you a 4-step plan that helps you set up your budget and manage it.
Here are the four rules:
Rule 1: Give every dollar a job — When you get paid and add the income to YNAB, you have to give it a job. You have to decide what that money needs to do before you get paid again. For example, some of it will go towards bills, groceries, and other necessities, while a part of it will go into your investing fund. The choice is yours to make.
Rule 2: Embrace your true expense — This rule will help you get prepared for those bigger, less frequent expenses. These include the annual vacation you take, the car insurance you have to pay every year, and so on. The plan is to write down all these expenses and break them down into manageable monthly “expenses.” So if you spend $2,400 on average on a yearly vacation, you’ll have to budget $200 per month for it. That way, you’ll have the money on hand when it’s time to head to that tropical island.
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Rule 3: Roll with the punches — Since you can’t plan things out perfectly and your priorities might change after a specific time, you can adjust your budget accordingly. So if you overspend in one category, you can easily cover the loss with money from another category. As long as you’re not in the red at the end of the month, you’re good.
Rule 4: Age your money — This rule is designed to break the paycheck-to-paycheck cycle. The plan is to age your money for at least 30 days, meaning that the money you earn this month will be spent no sooner than next month. This gives you a bit of breathing room in case you lose your job or another financial emergency comes up.
I’ve been using YNAB for years, and the 4-rule process helped me get a grip on my finances. It really is the best budgeting app out there in my opinion. However, nothing is perfect.
YNAB is expensive, costing more than Netflix.
The first issue I have with YNAB is that it’s expensive, costing more than a basic Netflix subscription. The monthly cost comes in at $14.99, but you can get a discount if you pay upfront for an entire year — $99.
That’s quite steep, although I still think it’s worth it since you’ll be able to save money by using the app.
The other drawback is that there’s a learning curve involved with YNAB, which not everyone is a fan of. It takes a bit of time before you set everything up and figure out the system, but once you get it, it’s all smooth sailing after that.
Try it out for yourself. YNAB has a 34-day free trial, so you can test it out before parting with your money.
Are there any good alternatives?
If YNAB is too expensive for you or you just don’t like it, there are other budgeting apps out there that may be more up your alley. They offer less in our opinion, although they are still better than not using anything. We’ve rounded up the top five YNAB alternatives below.
Mint is free and has over 30 million users. It lets you track your income and expenses, set up categories for your budget, and much more. It also enables you to set financial goals, whether that’s saving up for a house or paying down your debt.
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The app lets you monitor your credit score and can even help you negotiate your bills to save money. While it’s free, there is a premium version available that gets rid of ads and comes with a few exclusive features. It costs $4.99 per month.
PocketGuard is a premium app that’s full of extra features you won’t find on competing services. For example, after you set up your budget, the app will calculate how much spendable money you have, making sure that you don’t go overboard and spend the money that should go towards bills, rent, and other necessary expenses.
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You can also link your banks, credit cards, investments, and other accounts in one place, so you’ll have all the info in front of you when needed. And like most other apps, it lets you set up goals for saving or debt reduction.
There’s a free version of PocketGuard available, but it offers limited features. A premium plan will set you back $4.99 per month.
This is the app from Dave Ramsey, who likely needs no introduction. It’s part of the Ramsey Plus subscription, which also gives you access to Financial Peace University as well as various other financial courses. Since it’s bundled with other services, the subscription is quite expensive, coming in at $59.99 for three months or $129.99 for an entire year.
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EveryDollar supports all the major features you get with rival solutions. It also tries to get you to save for unexpected expenses and financial goals, whether they are due next month or five years from now. Before committing to the app, you can test out the free version to see whether you like it or not.
Just keep in mind that the main benefit here is all the extra features you get alongside the budgeting app. If you don’t find any value in them, it’s better to just go with something cheaper.
While not as well known as the other apps on this list, Toshl is a great budgeting tool. It has a lovely river flow feature that shows you all the different directions your money flows and in what quantities. It also supports more than 14.000 bank and financial service connections across the globe, which is more than most of its rivals.
The premium plan goes for just $2.99 per month, but it doesn’t support an automatic sync with your bank. To get this feature, you’ll have to step up to the more expensive plan that goes for $4.99 per month.
Honeydue markets itself as a budgeting app for couples. It allows couples to see each other’s finances, although each partner can choose how much they want to share. You can also chat within the app, so you have all your money-related conversations in one place.
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Unlike the rest of the budgeting apps on this list, Honeydue is completely free. It’s available for iOS and Android devices, but there’s no web client available.
While YNAB is the budgeting app of choice in our opinion, the other five listed in this post also have their advantages. Just pick one and start using it to get your finances in order.