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Reasons Budgeting Apps are an Effective Way to Save

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Managing finances is an important part of everyday life and is necessary in order to cover the essentials such as food, bills and rent, as well as for planning ahead. However, recent research has revealed that 25% of adults in the UK do not have any savings, while a study has shown 70% of working people are ‘chronically broke’, meaning many are struggling on a daily basis.

With such a large percentage of people facing financial uncertainty, this means an unexpected repair or sudden job loss could leave them in a perilous position. While lending options exist, adopting new money management approaches, like budgeting apps, could help to keep you in the black in the long run.

Savings are Made Automatically

For many, the biggest appeal and benefit of using a budgeting app is the ability to save automatically. This is because many apps will round up your spending to the nearest pound, immediately adding to your savings fund each time you spend.

This can be particularly helpful for those who struggle to set money aside, as these small amounts are unlikely to make a difference to your overall monthly budget.

Notifications to Avoid Late Fees

Depending on the budgeting app you choose, many money management options include a notification system. This can be programmed to include bill due dates. If you make your payments manually, this could help you to avoid late fees. It can also benefit users whose bills go out via direct debit, as these reminders can assist when planning your money for the rest of the month.

Additionally, this feature is useful for things that you may only pay for every few months, such as your TV license, which can be easy to forget.

Categorize to Track Spending

Many budgeting apps make use of categories in order to effectively monitor how you spend your money. This may include things like education, shopping, travel, bills and entertainment. By breaking down your spending, this could help you to see where your money goes, allowing you to spot opportunities to cut back and save.

Furthermore, while some apps automatically assign your spending, others allow you to do this manually or create your own custom categories, providing you with more control.

As well as these three major advantages, money management and budgeting apps can be effective in other ways. This includes helping you to spot fraudulent transactions by being able to check all of your spending in one place and helping you to set and work towards personal financial goals.

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