Want to Stick to a Budget? Some Advisers Say Skip the Apps

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WSJ Your Money Briefing 9 min 2 speakers 3 chapters transcribed 2 months ago
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J.R. Whalen 0:33
Here's your money briefing for Monday, October 30th. I'm J.R. Whelan for The Wall Street Journal. There are lots of apps available that help people track their spending, but do they help them keep to a budget?
Imani Moise 0:46
If you struggle with overspending, it's probably better to go with old school methods than to outsource to an app. That way, you have to mentally account for every dollar that you spend and really engage with your financial habits.
J.R. Whalen 1:02
We'll talk to Wall Street Journal personal finance reporter Amani Moiz after the break.
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J.R. Whalen 1:51
Need to track your expenses and not overspend? There's an app for that. But some financial planners say a simple spreadsheet might do the trick. Wall Street Journal personal finance reporter Amani Moise joins me. So Amani, who do financial advisors say should forego fintech apps and put everything in a spreadsheet?
Imani Moise 2:10
The advice is generally that if you're new to budgeting or if you struggle with overspending, it's probably better to go with old school methods than to outsource to an app.

Do fintech budgeting apps actually help people stick to a budget?

Imani Moise 2:20
That way, you have to mentally account for every dollar that you spend and really engage with your financial habits.
J.R. Whalen 2:28
So how should someone go about doing that?
Imani Moise 2:30
We could obviously start with a blank spreadsheet. You could open up Excel. But the good news is that if you go into Google Sheets, there's a template tab and budgets are one of the first options there. Or you could just start with a Google search and say spreadsheet templates or even a worksheet template if you prefer putting pen to paper.
J.R. Whalen 2:48
Still, that sounds like a lot of work. Isn't the idea of the app to streamline the process and track everything for you?
Imani Moise 2:55
Yes, but if your goal is to be better at managing your money, there's probably going to be some work involved. What the apps are really good at doing is they pull all of your financial accounts into one place to give you an overview. They usually separate your spending into categories so you can see what you're doing from month to month, spending on groceries or shopping, cabs, etc. But having that overview isn't necessarily going to change your behavior. It's going to tell you where you've been, but not necessarily help you get to where you want to go. There's another reason that some people decide not to sign up for these apps. I spoke with a developer who made a free tool to help people monitor their monthly cost of debt, which has become a lot more volatile since interest rates have been rising.
Imani Moise 3:38
He said the top feedback that he got during the beta testing of the product was that people were hesitant to link their financial data to yet another online resource. What we're seeing is that, in general, people are starting to feel fatigued of sharing their data in so many places. And in reality, linking all your financial accounts is giving a company access to a lot of insights about you.
J.R. Whalen 3:59
What is budgeting with a spreadsheet offer that apps don't?
Imani Moise 4:03
Customization is a big one.

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