Budgeting Tools & Resources
There is no one “best” budgeting tool. The best tool for you is one that you’ll use and that helps you spend less than you make. Here are several that I’ve used and believe are solid budgeting tools.
YNAB, short for You Need a Budget, is the budgeting tool I use every day. It automatically downloads all of your transactions from bank accounts (checking and savings), as well as credit cards. You can categorize your expenses, run reports, and understand where your money is going.
It is a subscription model, but the cost is reasonable. I’ve found it to be the best tool to manage your money.
I used Mint for many years. It’s a free online money management tool. You connect your financial accounts to Mint. The app then downloads your transactions and categorizes them for you. It’s not perfect, but it’s right more often than not. You can then see where your money has gone and plan your budget going forward.
Savings Tools & Resources
Acorns is a savings app that invests your spare change. You can link a debit or credit card to your Acorns account. As you spend money, Acorns rounds up your purchase to the nearest dollar. Once your roundups reach a total of $5, Acorns transfers the amount from your designated Spending Account (usually your checking account) to your Acorns account. From there, Acorns invests your money in one of several investment portfolios.
Stash is aimed at new investors looking to start with relatively small amounts of money. You can start with as little as $5 and invest in index ETFs or selected stocks. Stash also offers a unique debit card. It enables you to earn stock based on your purchases. While the reward rates are modest, it’s a good way to get started investing outside of a 401(k).
Qapital is an app that helps you save money through what it calls goals and rules. Goals, as the name suggests, are savings targets you create based on your financial priorities. Qapital then enables you to create savings rules to automate the process of saving to reach these goals. Qapital also offers an investing account to help you reach your long-term goals.
For emergency fund and short term savings, online banks are my favorite. They pay the highest interest rates and come with virtually no fees. Online banks that I’ve used in the past include Ally, CIT, American Express Bank, Discover Bank, and Capital One.
Some investing tools, such as Wealthfront, Betterment, and Personal Capital also offer high-yield FDIC-insured savings accounts (see below).
Investing Tools & Resources
Vanguard is a mutual fund company that popularized index fund investing. You can set up just about any type of account, including IRAs and taxable accounts. From there, you can invest in target date retirement funds and low-cost index funds.
Fidelity also offers low-cost index funds and any account type you’d need. Its target date retirement funds, however, are expensive.
Personal Capital offers a free financial dashboard. You can connect your bank accounts, credit cards and investment accounts. Personal Capital than provides automated analysis of your spending, asset allocation, and retirement planning.
Personal Capital also offers a high-yield cash account. It’s FDIC-insured and offers a competitive rate.
Wealthfront is an automated investing service often referred to as a robo-advisor. It’s similar in theory to a target date retirement fund, however, it gives you more control over your asset allocation. It also offers excellent tools to understand your investments.
Wealthfront also offers a high-yield cash account.
Betterment is also a robo-advisor, similar to Wealthfront. They both offer a simple way to start investing, but they both do charge a fee. While the fee is modest, we know from Retire Before Mom and Dad that every basis point in fees costs us a lot of money over our lifetimes. Still, I think robo-advisors are a reasonable choice for those who want a service that can handle your asset allocation and rebalancing.