If you’re finding it hard to manage your personal finances you may be considering personal budgeting services.
Effective budgeting ensures you have enough money for what you need, highlighting any areas that you can cut back on to save money or use on your wants.
We discuss your options when it comes to budgeting advice and assistance.
What are budgeting services?
Personal budgeting services or budgeting consulting services offer to take away the stress and time of managing your money and do it for you.
Budget consultants, also known as budget analysts, analyze your personal finances and recommend a monthly budget to help you control money and save more.
Things to consider before signing up for budgeting services
The cost: budget assistance services cost money, and if you don’t have much spare money now, adding another monthly expense to your situation won’t help.
Budgeting services don’t often advertise their fees, which means the price you are being offered may sound good, but without anything to compare it to it can be difficult to know.
Giving control of your money to a company: personal budgeting services will hold your money and take control of it without any regulatory oversight.
It is unclear whether your money is separated from the businesses’ assets, which may cause a problem if the personal budgeting service company becomes insolvent or is sued by another company.
The service: personal budgeting services are not bound by statutory regimes or licencing requirements, which means they don’t have to meet any criteria or demonstrate what they are providing before offering their services to the public.
If you do choose to use a personal budgeting service, make sure you know the following information before signing up:
1. The fee structure, including sign up fees, ongoing fees and cancellation fees. Ask for a full breakdown of fees so you know what to expect and whether you can afford the service.
2. The terms and conditions of the contract. Read the full contract before signing it. Consider whether the people providing the services are fully qualified. What happens to any interest earned on your money?
3. Can you really afford an additional expense? If you’re struggling financially, don’t put more pressure on yourself by increasing your outgoings.
Alternatives to budgeting services
Busy daily life can make it hard to plan ahead and manage your spending. There are effective, cheaper alternatives to budgeting services that can help you take back control of your personal finances.
Apps for financial planning have become increasingly popular in recent years, letting you easily monitor your spending and saving habits on the go from your phone or tablet.
Here are the top-rated paid apps for 2021.
- YNAB (You Need A Budget): allows you to create a budget and helps you to save money. You can actively set goals, add expenses and adjust your budget as required. On YNAB you can also link the app to your bank account to automatically import transactions. The app will cost you $11.99 per month or $84 per year after the 34-day trial period.
- PocketGuard: if you want an app that breaks down exactly how much money you have left over after expenses, this is the one for you. PocketGuard takes the hard work out of budgeting by providing transaction data and automating the budgeting and saving process. If you like spreadsheets, you can even export transactions to Microsoft Excel. There is a free version of the app or a Plus version that costs $7.99 per month for more features.
- Stash: with more than 297,700 ratings on the App Store, Stash is a popular budgeting app that also doubles up as an investment account. As a customer, you will have access to the latest banking and budgeting tools to help you track your budget and manage investments. Stash have different pricing levels for $1, $3 or $9 per month.
How to choose the right budgeting app for you
Price: the cost of budgeting apps vary greatly. While it is tempting to opt for the free apps, if a paid budgeting app provides the tools you need to improve your personal finances, it’s worth the investment.
Features: different apps will offer different features and benefits. Sign up for the free versions of different ones to see which one fits your needs the best.
Typical features in budgeting apps include:
- Receiving notifications for upcoming outgoings in your accounts.
- Budget setting.
- Credit score tracking.
- Tracking spending.
- Setting financial goals.
- Connecting your accounts
Security: budgeting apps have access to your personal information so it’s extremely important that the app you use has high levels of security.
Check the level of security encryption on your chosen app before entering your sensitive financial details.
Free budgeting services
You don’t have to spend money to keep track of your spending.
The following traditional budgeting methods and apps are completely free.
- Pen and paper: all you really need to budget effectively is a pen and paper. Write down all of your expenses and categorize them into needs or wants. Next, add up your monthly income. If your outgoings exceed your income, you’ll need to make some cuts. Writing everything down helps many people to understand where their money is going and highlight obvious areas where spending can be reduced.
- Envelopes: mark each envelope with a spending category, e.g mortgage, groceries, debt repayments and savings. Place the amount of cash you need for each area into the envelope. Once the cash has been spent, don’t put any more in until the next month. Using cash makes people more reluctant to spend it.
- Spreadsheets: you can find lots of downloadable budgeting spreadsheets online, or you create one yourself. Using a spreadsheet makes it easier to customize and edit your budget and track your income.
- Banking tools: most banks provide free budgeting resources for customers on their website. These include tracking expenses tools, running reports to analyze your spending habits and other tools such as automatic transfers for savings and alerts when your account balance goes beyond a certain amount.
- Budget worksheets: The Federal Trade Commission website provides advice on money and how to budget. They even have a simple worksheet that you can download to see whether your outgoings are greater than your income. Google Drive and Microsoft also do their own free versions.
- Mint: is totally free to sign up for and use. It’s mobile and user-friendly and can even provide an on-demand credit score. You can track your bills, set goals and use their handy budgeting tools and alert features to manage your finances 24/7.
- Goodbudget: if you like the sound of the envelope system but would rather a virtual version, this website is for you. After each paycheck, you transfer the required money into virtual envelopes.
Other budgeting help and advice
Financial counsellors are qualified to provide information and advice to people who are having money troubles.
These professionals will explain your options and help you make a plan to eliminate debt, budget effectively and save money.
Use the right budgeting service for your financial situation
Everyone’s financial situation is different, so it’s important to consider all of your options when it comes to seeking personal budgeting advice or assistance.
The most important thing to remember is to seek help if you need it, whether that’s via a budgeting app, using personal budget consulting services, or talking to a financial counsellor. We have lots of helpful advice on personal budgeting on our website. Take a look.