Budgeting apps have become increasingly popular tools for managing personal finances, offering a convenient way to track spending, save money, and gain control over one’s financial well-being. While many dedicated budgeting apps exist on the market, often requiring a monthly subscription fee, it’s worthwhile to explore the features offered by traditional and digital banks before committing to paid services. Many banks now provide robust budgeting tools integrated directly into their free current accounts, eliminating the need for separate apps and associated costs. These integrated tools often include features comparable to or even exceeding the functionalities of standalone budgeting apps.
One key feature offered by many banks is the ability to create digital savings pots, often referred to as “digital jam jars.” These sub-accounts within the main current account allow users to allocate funds towards specific goals, such as saving for a down payment, a vacation, or an emergency fund. By segregating funds into designated pots, it becomes easier to visualize progress towards savings goals and resist the temptation to dip into these earmarked funds. Some banks even offer the option to lock these pots, providing an extra layer of protection against impulsive spending. Several banks, including Monzo, Starling, Kroo, TSB, and Chase, offer this feature with their free accounts, with Kroo currently offering a competitive interest rate on these digital savings pots.
Beyond simple savings pots, some banks offer the added convenience of virtual debit cards linked to these pots. This feature allows for direct payments from specific savings pots, facilitating better budget adherence. For example, Starling Bank’s bills manager feature enables users to set up direct debits for recurring expenses like utilities and rent directly from a designated savings space. This not only simplifies bill payments but also helps users track price increases more effectively by isolating these transactions. Starling also allows users to create up to five virtual debit cards linked to different savings pots and add them to digital wallets like Apple or Google Wallet, enabling tap-and-pay functionality directly from these designated funds. This can be particularly useful for managing expenses like rent or allocating a specific budget for regular purchases, like coffee.
Recreating the traditional piggy bank experience in a digital format, many banks now offer a “round-up” feature. This feature rounds up debit card transactions to the nearest pound, transferring the difference to a separate savings account. This automated saving mechanism allows users to save small amounts without conscious effort, accumulating funds over time. For example, a £3.50 purchase would be rounded up to £4, with 50p automatically transferred to savings. Some banks even allow users to customize the round-up percentage, enabling them to accelerate their savings effortlessly.
Tracking spending habits is crucial for identifying areas of overspending and optimizing budget allocation. While many banks provide basic transaction categorization, only a few, including Virgin Money, Lloyds, Monzo, and Starling, offer the flexibility to create personalized categories. This customization empowers users to tailor the tracking system to their specific spending patterns and gain deeper insights into their financial habits. This granular level of control allows for more precise analysis of spending trends and facilitates the identification of areas where adjustments can be made.
Managing subscriptions is another area where banking apps can prove invaluable. With the increasing prevalence of subscription-based services, it’s easy to lose track of recurring payments and incur unexpected charges. Many banking apps provide an overview of upcoming payments, including direct debits and standing orders, allowing users to anticipate and manage these expenses effectively. This feature can help prevent unwanted charges from forgotten free trials or subscriptions that are no longer needed, providing greater control over recurring expenses.
Further enhancing financial control, many banks offer payment alerts that notify users when their balance falls below a certain threshold or when payments are processed. These alerts serve as timely reminders and can help prevent overdraft charges and facilitate prompt identification of fraudulent transactions. Activating these alerts provides an additional layer of security and helps maintain awareness of account activity.
Addressing specific spending concerns, many banks now offer the ability to block certain types of transactions, such as gambling, directly through their apps or by contacting customer service. This feature provides a valuable tool for individuals seeking to control impulsive spending or manage addictive behaviors. Some banks, like Barclays, even allow users to block transactions at specific retailers, offering further customization and control over spending habits.
Finally, recognizing the potential for impulse purchases with contactless payments, most banks allow users to adjust their daily contactless limit. While the standard limit is typically higher, setting a lower personal limit can help curb unnecessary spending and provide added protection against unauthorized card usage. This feature provides a simple yet effective way to manage spending and enhance security.
In conclusion, before subscribing to a dedicated budgeting app, exploring the built-in features offered by your bank can be a financially prudent move. Many banks now provide comprehensive budgeting tools as part of their free current accounts, offering features comparable to standalone apps. These integrated tools empower users to track spending, save efficiently, manage subscriptions, and control their finances effectively, all without incurring additional costs. By leveraging these readily available resources, individuals can gain greater control over their financial well-being and work towards achieving their financial goals.
