Online Budgeting Tools: Are They Effective or Not?

Today, technology is everywhere and can help you with almost anything, even budgeting.

From online budgeting tools, budgeting software or apps, to a free printable budget planner.

People are getting innovative in saving and spending money.

But are they really effective or not?

Why Use Online Budgeting Tools

The convenience of using online budgeting tools

We live in a society where we are compelled to spend more than we save. With shopping malls conveniently placed in crowded and busy areas, to constantly changing trends in food, gadgets, and fashion.

How else can you prevent yourself from spending?

Of course, most people would say discipline.

But with these things being advertised on all mediums possible, chances are, you will eventually give in.

That is why apart from discipline, it is important to back it up with a method that works for you.

Before, budgeting was done with a pen and paper. With times changing, it evolved to the use of a spreadsheet which was initially accessed via a computer.

Currently, we can budget anytime, anywhere as long as we have an internet connection.

These tools can be accessed through a smartphone, tablet, or a computer.

Important features of online budgeting tools

1. Monitor transactions

Whether be it your income, expenses, or bills, it is important to know your finances.

This is important because you get to see if you are spending more than what you actually earn.

Apps with this feature: Almost every online budgeting tool has this

2. Budgeting and planning

This feature enables the user to simplify and improve budgeting.

This is also very helpful to individuals who are planning to start budgeting but do not know how and where to start.

Apps with this feature: Almost every online budgeting tool has this

3. Categorization

Most online budgeting tools have this feature which manages your rent, bills or mortgage.

Through categorization, you get to see how much of your income goes to a certain category and whether you are over or under budget.

Apps with this feature: Mint, Wally, Level Money, HomeBudget, YNAB, Moneydance, PearBudget, Budget by Snowmint Creative Solutions, Inzolo

4. Calculate net worth

For individuals who want to know and be updated of their net worth, this feature is offered in some online budgeting tools.

However, only a few offer this feature since this is a niche.

Apps with this feature: Personal Capital and BudgetWorksheets.org

5. Visual interpretation of data

Some people understand data (especially finances) when shown in graphs, charts, and the like.

Unfortunately, this is also a niche market, thus a few online budgeting tools with this feature.

Apps with this feature: GnuCash, Wally, Moneydance

6. Bank consolidation

For convenience, these online budgeting tools also offer consolidation of your bank accounts.

This is to oversee your transactions.

Some even offer online banking to send payments and download information.

Apps with this feature: Mint, Level Money, YNAB (You Need A Budget), GnuCash, Wave, Inzolo

7. Savings goal

One of the best features of online budgeting tools is setting a savings goal for yourself.

Apart from budgeting, you even get to save for your personal needs.

This is really helpful if you are saving up for something or if you want to reach a certain amount in savings.

Apps with this feature: YNAB (You Need A Budget), PocketSmith, Wally, BudgetPulse, AmericaSaves.org

8. Data import and export

Since budgeting is done and monitored in these online budgeting tools, you can choose to import and/or export your data should you need to.

This is usually done when doing payrolls.

Apps with this feature: YNAB (You Need A Budget) – done via syncing to your desktop, MoneyWell Budget Software for Mac OS, Pocket Expense App, PocketSmith, Inzolo

Here are simple household budget templates and apps to save you big.

How effective are online budgeting tools?

Using an online budgeting tool saves you money not only from budgeting but also from fees you have to pay for personal financial advisers.

Here, you can choose from free or paid services, which will depend on your needs.

You will know if an online budgeting tool is effective when:

• It compels you to consistently use it to track and manage your finances. Sometimes, life gets you busy. But if an app is as good as it claims to be, it will urge you to not skip a beat in budgeting and monitoring your finances.
• It motivates you to save. Spending is a whole lot easier. But if the app is indeed effective, you’ll notice you spend less and save more through the online budgeting tools’ budgeting and forecasting features.
• You actually save money! It’s safe to say the most evident output of a budgeting app is how much money you save. Otherwise, what’s the point?
• You recommend it to your family and friends. Of course, if the app really works as a budgeting tool, you share it with your friends and marvel at how much you have improved with your finances.
• People around you start using it. Apart from the money you save, you get further proof that the app you use is effective when people actually use it. They saw it worked with you, so why won’t it with them?

Watch James L Paris’ list of 7 free online budgeting tools:

The effectiveness of an online budgeting tool is subject to the user’s needs.

While it may be good for you, it may not work on another person because both of your needs and financial situations are different.

So it’s important to compare online budgeting tools and check which one will suit you.

If you need more choices, here are 15 amazing budgeting tools that can help anyone. Which online budgeting tool do you prefer? Let us know in the comments section!