FinTech has enabled seamless access to financial services and simplified transactions for millions of Indians. An increasing proportion of payments are now made on the move. With digital accounting for a growing share of financial transactions, wallets are fast becoming a thing of the past, particularly among the Millennials and Gen Z. Digital payments skyrocketed from around 2,000 crore transactions in FY17-18 to almost 9,000 crore transactions in FY21-22, with the value growing from ₹1,962 lakh crores to ₹3,021 lakh crores in the same timeframe, according to data released by the Ministry of Electronics & IT.
Banking via phones has unlocked a world of convenience and taken India by storm. In 2022, India grabbed the Number 1 spot in the world, accounting for 46 percent of global digital payment transactions. Apart from being a phenomenal feat, this also means people have access to all their funds in their bank account at any given point in time, right at their fingertips. For instance, individuals can simply scan a QR code and pay for anything. With embedded finance, customers can easily access credit at the point of checkout. Insurance policies can now be availed of without the hassle of dealing with several documents.
With such ready access to money on the move, impulsive purchasing can take over, blurring the lines between essentials, needs and aspirations. This is where budgeting apps can help manage your personal finances.
Replacing the bank passbook of yesteryears, budgeting apps do much more than monitor your transactions. Budgeting apps can review your digital transactions and help you keep a record of your income and expenses from all sources. Such secure, comprehensive, and accurate tracking augments an efficient money management system.
Budgeting apps empower users to build a future-ready financial system and stick to it. Here’s how budgeting apps can help improve your financial management.
Tracking
The usability of calorie-tracking apps tends to fade away because the user is expected to manually enter the values after each meal. Similarly, budgeting apps become dead on arrival if they can’t automatically scan and decipher transactions. Automation not only saves time, but also enhances visibility and eliminates the possibility of omission or double inclusion. Tracking also solves to identify ad-hoc fees or bills that have been generated without the user’s knowledge.
Also read: Just financial planning is not enough. Align your life goals, too
Financial goals
You can set up and plan for short and long-term financial goals and track how far you are from achieving them. Powered by smart algorithms, budgeting apps can include fixed expenses like rent, variable expenses like utility bills, set aside a percentage of funds for emergencies, and even account for indulgent purchases. While financial goal setting might be an obvious feature which is universally available on budgeting apps, its often underutilised. This could be because individuals have a rough sense of their financial goals in their mind and are not necessarily driven to input this. Industry experts are working towards solving this by leveraging better customer experience.
Categorise expenses
Expenses can be classified in multiple ways – by timeframe (like daily or monthly), fixed and variable, needs and wants, billed and unbilled, and more. Some apps allow you to create categories such as groceries, transport, eating out, entertainment, and so on. Although these budgeting apps come with default categories, they allow you to add your own.
Stay on schedule
Budgeting apps can notify you of upcoming bills, credit card payments and EMIs. While you do have the flexibility to disable these alerts, they prove useful in staying on top of your money management. Some apps not only alert you of upcoming payments, but also suggest how these will affect your overall budget. There are budgeting apps that also allow you to automate recurring bills and subscription payments, which eliminates late fees and protects your credit score. A new way to present this is using the intuitive integration of a calendar UI, which reflects on which days bills and payables are due.
Also read: Do you exhaust your credit card limit often? Your credit score could come under pressure
Keep track of investments
Some budgeting apps help you stay updated with your investments in stocks, mutual funds and more. You can track the current value of your portfolio and even automate SIP payments.
Analyse and refine
The best budgeting apps provide reports of expenses. Some provide this information visually, in graphs and charts. It makes it very easy to know where your money is going and helps you plan upcoming expenses better. There are apps that offer actionable insights to lower your expenses in categories where you’ve spent more than budgeted for.
Budgeting apps are undoubtedly powerful money management tools that help you regain control over your finances in a convenient and systematic way. While they play a key role in your financial wellbeing, not all budgeting apps are the same. Check out the budgeting apps in the market and choose the one that resonates with you the most.
