Having a budget is the first thing you need to do when it comes to managing your finances. “Money comes out in different ways: cash, direct debits from bank accounts, credit cards, wallets, etc. which complicates things. There would be several, ”says Kiran Telang, co-founder and director of Dhanayush Capital Services Pvt. Ltd and Sebi Licensed Investment Advisor.
If we don’t track our spending, we tend to overspend, leaving less money for savings. “It is important to know your savings capacity. Savings are invested in investments which then create wealth, ”says Telang.
It used to be that people would list their expenses at a dairy to find out where their money was going. While an old-fashioned planner never goes out of style, personal finance apps can do the trick, too. These come with a host of features that make it easy to keep track of a budget. Here are some of the features offered by these apps.
Create compartments for expenses: These apps allow you to classify expenses into different categories. So you can organize your expenses under headings such as groceries, transportation, restaurant meals, entertainment, utilities, etc. At any time you can go to the app and see how much you have spent under a certain head.
Automatic categorization of expenses: These applications can be synchronized with your bank accounts and electronic wallets. Whenever you make a payment through a bank account, debit card, credit card or wallet, the app reads the corresponding text message and matches it with the appropriate expense manager. This makes the process of tracking expenses a lot easier. However, the expenses made in cash must be manually added to the given category. Some apps also give you the option to scan physical receipts to update your expenses.
“Fiscus is a money management application with a highly automated interface, allowing automatic tracking of a user’s bank accounts, credit cards and electronic wallets at the transaction level,” says Sudipto Roy, founder and director of Finlabs India Pvt. Ltd, who developed Fiscus.
Create a budget and stick to it: Some of these apps also let you set spending limits for each category, so it’s easier to control your spending. Additionally, you can set monthly, weekly, and daily budgets. “Users have the ability to set up monthly budgets for each of these categories and track them in real time. Users receive alerts when monthly budgets are exceeded, ”explains Roy. You can set alerts for the payment of utility and telephone bills, DTH bills, and insurance premiums. Additionally, you can check bank account and credit card balances from within the app.
View reports: These apps also provide you with visual representations of your spending and budget through bar charts, pie charts, and flowcharts. Through these, you get an idea of how you spent your money over a certain period. “We’ve tried to keep the app simple and easy to use, so that users aren’t intimidated. We send them a weekly summary of their spending, as this is an app that you might not want to use on a daily basis, ”says Shameel Oswal, AVP product, Capital Float. The Walnut personal finance management app is a Capital Float offering.
Data security: While these apps deal with highly personalized and sensitive information, they do not access or store a customer’s personal and sensitive information such as actual bank account numbers, login credentials, PINs, passwords. or OTPs. “We have implemented bank-grade security, ie 256-bit encryption for the storage and transmission of data to protect transaction information,” explains Roy.
“We make sure to ask users for the relevant permissions when they start using the app and explain why those permissions are needed,” says Oswal. A user can decide not to allow SMS scanning, in which case they cannot use certain features. .
Some apps have a premium plan that you have to pay for, but the free versions work just as well.
If you’ve put aside creating and tracking a budget, a money management app might be all you need. It’s your hard earned money, after all.
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