How to use automatic expense tracking
Automated expense tracking sites and apps are typically free. Look for one that will help you:
- Set goals. For example, if Jeff wants to pay off his Visa bill, he can tell his app and it will help him find ways to do it.
- Track everything you spend. At a glance, you’ll know what you’ve spent on eating out, gas, groceries, entertainment, etc. Seeing expenses in black and white allows you to find places where you can cut back and find extra money to reach your goals faster.
- Avoid paying late. Once you tell it what your bills are, the site or app will alert you when one is due. You can also get alerts whenever you spend over a certain amount, have a low balance, etc.
- Discover deals. Since these sites and apps analyze your spending, they’re in a good position to help you spend less. For example, if you’re paying 6 percent on your mortgage, they might suggest a lender that will help you refinance to 5 percent. Or if they notice you like eating out, they might send you a coupon to a restaurant.
What’s the catch?
While most budgeting apps are free, they do make money from the deals and suggestions they offer. For example, if you refinance your mortgage with the lender they suggest, they get paid. If you use the restaurant coupon they email you, they get paid.
There’s no harm in someone sending you a coupon or suggesting a certain lender to refinance; you’re not required to act on these offers. Just remember that’s how these sites and apps make money and treat their advice accordingly. If they suggest you should refinance, for example, don’t just blindly follow their advice. Do your own lender comparison.
Which one is best?
A few years ago, we started recommending a company called PowerWallet to provide this service to our readers. I personally know the people behind PowerWallet, and I use it myself. It’s secure, and it’s free. I hope you’ll try it, but there are others: mint.com and budgettracker.com, to name a couple.
Bottom line? If you’re like Jeff and this is the year you’re determined to achieve your financial goals, my single best bit of advice is to try automatic expense tracking. It won’t take a long time to set up and offers the shortest path to your awesome financial destinations.
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I founded Money Talks News in 1991. I’ve earned a CPA (currently inactive), and have also earned licenses in stocks, commodities, options principal, mutual funds, life insurance, securities supervisor and real estate. Got some time to kill? You can learn more about me here.
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