In this post, you will find some of the well-known fintech apps for personal finance management.
Over the past few decades, consumerism has been the central theme for economies worldwide. Business entities have maintained its focus on consumer spending.
As per certain estimates, the credit card debts alone of an average household in the United States has increased by 10%. From approximate $14,500 in 2006 to about $16,100 in 2016.
Additional burden by way of mortgages, auto loans, student loans etc pushes the average debt to $12.4 trillion in total, ie an estimate of $132,600 of debt per household.
Personal well-being has taken a backseat with almost 70% Americans with less than $1000 of savings. Some sources even quote, one-third of the population have no financial cushion for their retirement.
As per the combined statistics of US Census Bureau and Federal Reserve, the average debt has been showing a consistent increase since 2014.
Every quarter of 2015 has shown an average increase of at least 1% to 2.5% every quarter. Alaska and D.C have recorded the highest credit card debt among all the states and Iowa being the least.
This trend of reckless spending is very alarming and the focus has to shift to better handling of personal finances. Many Fintech apps are emphasizing the importance of financial planning and improving your credit score.This can be possible only by repaying the outstanding debts and saving for the future.
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Fintech Apps for Personal Finance Management
Many Fintech apps are aimed at helping out a common man to be better equipped at handling their money.
Some of the ways in which fin tech apps are doing this is by assisting consumers in Budgeting, Saving, and Investing
Fintech Budgeting Apps for Personal Finance
As per statistics, a vast number of Americans are financially ill-equipped to manage an unfortunate event. With a savings of less than $1000, almost half of population couldn’t afford a $400 emergency expense and will have to borrow money or even sell off some of their possessions to cover this expense.
Typically, an emergency fund has to cover the living expenses of at least 3 months. So if you spend about $1,000 in a month, your emergency fund should be for at least $3,000 to help you manage for a minimum of 3 months.
Budgeting is a very important tool for financial well-being. For an effective budgeting, you should be well aware of different aspects of your finances like income, expenses, savings and outstanding debts.
There are many financial apps which provide these services to its users.
Mint, a financial app, provides services throughout US and Canada. Mint provides a real-time status of account balances, credit card balances, student loans and even 401(k) accounts.
Mint also keeps track of the different expenses of the users based on the categories like entertainment, food, travel etc.
Goodbudget is also one of the well-known apps which help the user in budgeting their finances. This app is based on the traditional system known as envelope system. Traditionally, most households kept money physically in different envelopes and marked them for specific expenses.
Traditionally, most households kept money physically in different envelopes and marked them for specific expenses.Compartmentalising these expenses was very effective.
Goodbudget relies on this traditional method. It allows you to keep your funds in separate envelopes albeit on your mobile. By separating your money into different compartments, specifically marked for certain expenses,
By separating your money into different compartments, specifically marked for certain expenses, Goodbudget helps you handle your finances effectively.
Fintech Apps for Savings Planning
One of the fintech apps which help the user with savings is Level Money.
Level Money keeps a constant track of the income and bills and other expenses. This app aims at showing the users their financial standing and monitor expenses with a view to saving money.
This app Level Money gives the user an up to date financial report on daily, weekly and monthly basis.The level app has a nifty auto-save feature. This feature automatically allows a predetermined amount to be set aside as savings.This auto-save feature is in addition to any excess money that can be saved from the expenses.
Digit is another fin tech app which is backed by Google.Digit scans the user’s income and spending habits. Based on these patterns, Digit automatically transfers some amount to the digit-savings-account.
The Digit Savings account is very helpful for people with an impulsive spending habit. The Digit Savings account does not offer any interest. However, this is a very effective way to boost individual savings.
Fintech Apps for Investing Management
Savings is the first step you can take towards to create a financially secure future. Saving money can be a slow and painful process.
Most of the time the savings are the first layer of financial security at the time of an emergency. If left untouched and unspent, Savings money builds up over the years into a huge amount.
But over the years, solely relying on savings is not enough. Long-term financial planning extends beyond the savings process.
Retirement plans, college funds, housing plans need to be further secured by way of investments. Savings will help you in the case of emergencies and unexpected expenses, but investing will secure your future.
Over the years the value of money reduces because of inflation. Investing will make sure that your money retains its value over the years.
Many Americans are skeptical towards investing in financial assets like mutual funds. They are of the opinion that financial assets are restricted to bankers and companies, but they are mistaken.
Some Americans hold the wall-street responsible for the poor state of the economy and don’t want anything to do with investments.
Acorn, a fin tech app, aims to change this perception.Acorn adds up the spare change by rounding off all the transactions to the nearest dollar.
This spare change is collective invested in low-cost exchange-traded funds or ETF’s.These funds are financially secure since they are guaranteed to be repaid by the stock exchanges.
Even though the financial markets carry some risk factor, investing the spare change can be less intimidating and more rewarding.
Acorn works up the idea of making the user more comfortable by making small investments. Over time, when the user is much more in tune with investing, they can put more amounts in their investments.
Promoting financial wellness is primary to build trust among the users.
Mint is another financial app which aims at helping its users with the investments. Mint provides a single user interface to track bank balances, credit cards, loan balances and transactions. Mint claims to have over 20 million users as of 2016.