The average person using a personal computer to track their personal finance information is nothing new. Quicken has been around for years and boasts millions of users. However, as the capabilities of smartphones increase, the growth of mobile apps, specifically those which aid in securing users’ personal finances, has revolutionized the industry.
And personal finance is something that could use a little attention in the US. Many Americans are currently mired in debt and some 16% have no idea at all of what their spending habits are. What is of more concern is interest in personal finance, it seems, tends to deteriorate as people age and finances become more complicated. Only 10% of baby boomers are truly engaged with their finances.
The Rise of Mobile Apps for Personal Finance
In many ways, the ways in which users are now able to revolutionize their finances are endless. Thousands of different applications currently exist. For example, the most popular personal finance app, Mint, helps their 9 million users who want to keep track of their spending, like Jennifer Hudson, make a budget and track their spending by category, which makes it much easier for users to see when they are overspending. Mint also informs users of their purchases over time by using historical data and, because of this, users are able to stay focused on their goals. Users will be able to see every time they splurged on a purchase and every time they choose to save. This helps keep the “cheat” purchases in perspective.
Many users say that what makes the program successful is the fact that it is based in the cloud, so they can access it from many different devices. Users are able to get real time balances on their phones, so purchases aren’t piling up without their knowledge.
In addition to budgeting, there are mobile apps that help consumers make smart decisions when complicated math is involved, like buying a home or a car. Two of the most popular are Mortgage Calculator for Android and CalcsFree Mortgage Calculator for iPhone both help users get quick calculations of the real cost of their purchase, an activity that helps consumers avoid purchases that are beyond their means and helps identify predatory salesmen.
One unexpected result of the rise of personal finance apps was they helped curb the tendency for Americans to eat in restaurants. There has been a downward trend in American restaurant spending since the year 2008. In 2010 Americans spent $2,505 less than they did in 2009 in restaurants.
Note, Not a Lifestyle Revolution
However, mobile applications are not the silver bullet in the battle against credit card debt and the poor state of personal finances in America. Personal finance apps cannot make you use them – many of those who download these apps only use them for a short while and because of this, the applications do not make any long-term improvements to their finances
Apps can also be harder for older users. Currently twice as many in Generation Y use apps compared to baby boomers even though baby boomers have far more complicated finances. Min users, for example, generally do not have a home mortgage. This leads market analysts to believe that most Mint.com users are not baby boomers as 76% of baby boomers own their own homes
Mobile applications also do not give counsel on how best to use money or which investments to make, although they can deliver share prices to user. And, the biggest complaint of all, mobile applications don’t foster good decision-making. Apps can only show users the money they’re spending; they cannot prevent users from spending it.
Recommendations for Personal Finance Apps
· Creating a Budget: Mint.com
Considered the best aggregator app, Mint can be used on either iPhone or Android and provides consumers account balances in real time and helps users divide up their expenses by category to help them better understand their spending
· Getting the Best Price: ShopSavvy
Used on either iPhone or Android, this money saving app turns user’s phone into a camera that searches the Internet to see if there is a better price available
· Finding a Deal on Everyday Purchases: Shooger
Also available for both Android and iPhone, Shooger has a database of over 80,000 coupons and a multivariable search system that allows easily navigate the database. This app also allows users to set up alerts that alert them when favorite stores get release new coupons.