Keeping track of your spending on the go has never been easier. If you have a mobile phone there are apps that can tell you how much you’ve spent on coffee in the last month, how many subscriptions you have, or even use an algorithm to automatically put money away into a savings account.
Three years ago, new rules about open banking allowed customers to give companies, other than their bank, access to financial information.
This prompted a range of apps which can help you manage your money with the swipe of a finger.
How they work
In January 2018, rules were introduced that essentially transferred ownership of data about how you spend your money, and other details, from your bank to you. As a result, you can allow an app provider to access your banking data.
It is passed from the banks to the apps by Application Programming Interfaces, or APIs – but only with your permission. You can change your mind at any time, and cancel the sharing arrangement.
It means that apps such as Money Dashboard, Emma, Plum and many others can collate all of your accounts in one place. The Open Banking Implementation Entity (OBIE), set up to administer standards for open banking, lists all apps that are regulated and secure.
Pricing
If you are embarking on a plan to save money, it’s best to make sure the app you are using is the right price. While basic versions might be free to download, access to all of the advertised features can cost.
Emma, one of the most high-profile of the apps, has a main version which is free, but the “pro” version costs £4.99 a month. For this, you get to track your net worth over time, set savings goals and earn cashback rewards, among other features. The free version allows users to track spending, manage subscriptions and budgets and plan debt repayments, among other features.
Plum has a series of levels of membership: free, which gives automatic savings (where money is moved into savings) and rounds up spending; Plus (£1 a month) where you can invest in funds via the app; Pro (£2.99 a month) which allows for “pockets” or virtual accounts where you can save for specific goals; and Ultra (£4.99 a month) which has a “money maximiser” that boils down your bills and commitments to tell you how much money you have left before payday.
Moneyhub lets you monitor your spending and set savings goals. It costs 99p a month, or £9.99 a year, and commits to not selling data to third parties.
Others are completely free and use data to make money. Money Dashboard offers market research services to other companies interested in consumer spending. Yolt, which has a prepaid debit Mastercard, makes commission from products sold through the app.
Beware of auto-enrolling after an initial free trial of a paid-for version. The Chip app has a ChipAI plan that gives access to an artificial intelligence feature that calculates how much you can afford to save. But after the initial 28-day free trial, you will be charged £1.50 a month.
Damien Fahy, of personal finance website MoneytotheMasses, says you should be aware of in-app offers, such as for broadband services or an investment fund. “Many budgeting apps make money by offering deals from selected providers; however, it is always wise to check and see if there are better deals available elsewhere,” he says.
Investment options
Claro is a new app which is set to launch on 16 August and will offer users one-to-one sessions with a financial “coach” who can give information – but not advice – about budgeting and investments. It will also offer themed investment packages based on energy, tech and British businesses.
The service will be free for at least six months, after which there are plans to launch three different subscription levels at varying costs. From the start there will be fees for investing. The first £2,500 attracts a portfolio fee of 0.19% of your money on average – this is the fund manager’s fee. On sums above that, there is also a platform fee of 0.45%.
Plum also offers a range of themed funds, such as “tech giants”, which invests in companies such as Google and Apple; “clean and green” aimed at companies selected for social responsibility, and “medics”, which looks at the healthcare market. You can set it up to invest a set sum on payday, or round up your spending and pay in the difference, or let its algorithm work out how much you should put by. The average fund management fee is 0.48%, according to the company.
Again, while investing via an app simplifies the process, you are limiting the range of funds you have access to, says Fahy, and there may be more suitable options elsewhere.
Where users may make some money is through incentives offered if they refer a friend to the app.
“If you love your financial app and regularly tell your friends about it, you may as well earn rewards when doing so. Most apps offer great incentives for recruiting others, often paying up to £25 per referral,” says Fahy.
For example, Plum pays £15 for every three successful invites, up to a maximum of 15, and £5 for each subsequent one. On Snoop, referers and the person who signs up both get a £5 Amazon voucher.
Four of the best and what they do
There is no shortage of money management apps available. Among the most high-profile are:
Emma analyses transactions to show recurring payments, connects all bank accounts from cards to current accounts to crypto and pensions, and highlights subscriptions being paid. The basic version is free while the pro version is £4.99 a month.
Money Dashboard says it connects to more than 90 accounts with every major UK bank and is free to sign up to. Sets budgets and gives notifications of overspending and creates categories for spending, such as at Christmas. Graphs project monthly spending with a predicted balance.
Yolt comes with a prepaid debit card for everyday spending. It uses “round-ups” for savings and breaks down spending. Gives digital “nudges” to save when you get paid.
Plum uses artificial intelligence to calculate an affordable amount to save based on spending patterns.
