Budgeting apps keep you from overspending
The budgeting app keeps track of your income and expenses, warns you when you start overspending, and lets you monitor your total net worth. Rosenberg uses Mint, but I prefer YNAB—its “give every dollar a job” system has revolutionized the way I look at my finances, and my net worth has grown by $27K since I started using the app six months ago.
The big reason why I prefer YNAB to Mint (I’ve tried both) is because YNAB forces you to deal with the consequences of your spending. We all overspend our budget now and then—but when you overspend with YNAB, the app asks you to rebalance your budget right away, with money you planned to spend in the future. That extra dinner out this month might mean less money in your clothing budget for next month, for example.
If you spend less than you planned, on the other hand, that money rolls into next month’s budget. This means you can save up for a special treat—or decide it’s time to move those dollars from “dining out” to “vacation” or “investing.”
Investment trackers encourage you to invest more
There are three big reasons why my net worth has grown by $27K in the past six months:
As a freelancer, I’m always looking for ways to increase my income.
YNAB has helped me identify which expenses I can cut from my budget.
After earning more money and cutting expenses, I’ve been pouring a lot more money into investments.
This is where the investment tracker comes in. I use Vanguard’s app, while Rosenberg uses Personal Capital. Both tools track investment returns and portfolio performance—and Personal Capital comes with a few additional features, such as the ability to set spending and saving goals.
Even though my investment tracker doesn’t come with a goal-setting feature, I’m still encouraged to invest more money simply by having the app on my phone. When I check the app and see how much my investments have grown over time, I get a dose of positive reinforcement and a reminder that the more I invest, the bigger my principal and the more opportunity for growth.
If the market is down and my investment values have dropped, I view it as a reminder that stocks are on sale today—so why not take advantage of a bargain?
Credit monitors save you money by helping you improve your credit
According to Capital One’s CreditWise app, my credit score is currently 796, or “Excellent.” This app alerts me to any change in my credit, as well as the reason why my credit score might have gone up or down—my credit score recently dropped by 12 points, for example, when I increased my total credit use from 2% to 4% (that is to say, I put another $1,000 on my credit cards to cover an upcoming vacation).
This isn’t that big of a deal; I’m going to pay off my credit cards in full like I do every month, and my credit score will get those 12 points back in a week or two.
But if you’re applying for a mortgage or a car loan or are in a situation where every credit point counts, having this information at your fingertips can help you make choices that’ll get you the highest credit score possible. This, in turn, could earn you a lower-interest loan and save you a lot of money in the long run.
Rosenberg uses Credit Karma to track his credit, which offers a similar service—and in addition to tracking your credit score, these apps also warn you when your credit changes in a way that suggests someone might be trying to steal your identity.
“I’m a bit of a money nerd,” Rosenberg writes, “so I like to see lots of details about my finances. I keep all three of these websites in my bookmarks bar so I can get to them with a single click.”
I’ve got my apps both in my bookmarks bar and on my phone—not just so I can access them with a single click, but also so that whenever I grab my phone to check the weather or listen to a podcast, I get this little visual reminder that I am a person who budgets and invests and tracks her finances.
Which, in turn, reminds me to check in with my apps and see how my money is doing.
