Should you use an expense management app?

February 26, 2022

Photo by Tima Miroshnichenko from Pexels

A couple of years ago, I was bothered by a constant feeling of being thirsty. Parched, really. It meant I needed to drink more water. I knew this, but no matter how hard I tried, I always forgot. As a result by the afternoon, I would start feeling like my tongue was parched, drink a glass of water and then forget again till the same feeling of thirst returned.

What could I do to remember drinking more water, clearly I needed it. As I pondered this dilemma, I remembered that the Garmin (a brand that makes sports watches) watch app on my phone had this added feature of tracking hydration. Voila! That’s the trick, I’ll add my water intake there and see what happens. In the least, I will be more aware and hopefully start hydrating better.

In this way, my behaviour of drinking less water began to transform.

Mobile apps are a good way to track your activities.

However, when it comes to money, there may be hesitancy given security and privacy concerns.

It was definitely something that stopped me from using mobile apps around money management. Truth is, in our fast-paced lives, if we use the app with awareness and control, it can benefit us more than it will harm.

Do you need an app to track expenses?

Firstly, let’s just agree that we all need to track our expenses. Tracking helps in understanding where the money goes and gives us the flexibility to budget and tweak expenses as needed. Without the awareness that expense tracking brings in our lives, we might find ourselves feeling a bit out of control and unable to match our income and expenses every month.

Not having a process of tracking in the mix is a recipe that can lead to overspending and eventually having debt.

When you have personal debt, be it in the form of credit card debt or borrowing from the bank or friends or any other form of a loan; emotionally, mentally and physically you can start to feel constrained and restricted in not just your money life, but rather debt has the potential to impact all other aspects of your life negatively too.

Phew! A positive step towards staying out of debt is expense tracking.

Now, do we need an app?

Mobile apps make tracking a simple task. You can add in an expense just as soon as it has happened. There are pre-fed expense categories, but you can add your own categories and subcategories too. Apps allow you to store pictures of receipts in case you need to refer to them in the future. You can also set budgets and choose to get notifications if your budget is running low. At the end of the month, apps allow you to filter expenses in a way that you can analyse where the spending hurts and where you have the margin to increase it. Finally, all this can be compared against your monthly income to see how well you are managing your expenses within what you earn.

Spending mindfully is one of the most basic ways to ensure a financially secure future.

What about security and privacy?

Security and privacy are genuine concerns, but not good enough reasons to stop you from using an expense management app.

Let’s address security first. This becomes a concern when you share your bank account details. With digital banking, online shopping and digital investing you are what we call leaving behind a digital money footprint already.

Along with encryption, these apps may require 2 level entry codes or passwords to protect your information.

Also, you needn’t add your bank details and you can just input the spending information. Most apps will allow you to export what you have added there into Excel. Which is where you can do the income and expense matching.

Hence, if you are concerned about security, check that the app has two-level password security and encryption so that your details are not easily visible to others. Secondly, you always have the option of making only expense related entries manually and leaving out the linkage with your bank account.

Coming to your privacy. If you have multiple shopping apps on your phone, your privacy is already compromised. With finance apps, you can control your privacy by choosing what rights you agree to at the time of setting up. You can deny camera and photo rights, deny notifications and so on.

For example, the app might ask for permission to pull out transactions from other eCommerce apps on your phone, you can simply deny that permission and input the transaction manually.

If you maintain good digital hygiene like keeping strong and secure passwords, keeping the app permissions to the minimum required and so on, you are likely to have a very secure experience with an expense tracking app.

Where can you find these?

These are all available in your Play Store or App Store. Check ratings and do some trial runs on a few before settling for one. Moneyfy, Wallet, Expense Manager, Money Manager, Walnut are some of the popular apps. Do your own trials before picking one.

These apps are here to make your life easier, not harder. Pick one only if you think you will get peace of mind in managing your expenses. Ultimately all of this can also be done in Excel.

Tracking expenses and budgeting is an important step in managing your personal finances, make sure that you don’t shy away from this.

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