How can you manage your money digitally?

Controlling your expenses lets you save, create rainy-day funds, and pay off your debts. The good news is that technology can lend us a hand with this.

1. Use apps to track your expenses

One of the easiest ways to learn how to manage your money is by tracking all your expenses. This habit will help you understand where your money goes and what areas you can cut down spending on (subscriptions you no longer use, free time activities, coffees to go, and other minor expenses, for example).

While many people use their bank’s mobile app, some people prefer tracking their expenses using specialized apps. Nowadays there’s a wide variety of apps dedicated to this. The challenge is finding the right one for you. Some make you link your bank account with it, while others don’t. For the ones that don’t, you’ll have to log your expenses manually.

Once the application has collected enough information about your expenses, it can categorize them and create reports, charts, and infographics that help you understand your finances. This information lets you create a realistic monthly budget and set SMART objectives (specific, measurable, assignable, realistic, and time-related).

Some applications send you notifications and alarms when you’re reaching your spending limit. This feature is especially useful if you want to start organizing your finances and you still haven’t assimilated how much you can spend per day, week, or month.

2. Use applications to split shared expenses with others

Technology can also help us manage the expenses we share with other people. If you’re planning on taking a trip with friends or family this summer, using a tool for splitting expenses will save you a lot of time and headaches.

These types of apps can also be helpful if you live with your partner, friends, family, or live with other people. You can add water, gas, and electricity bills, as well as cleaning products and any other typical expenses so that the app can split them up evenly.

3. Use applications to save

Learning how to track and divvy up our expenses with more precision helps us save. There are also apps that let you set aside a little money each day or with each purchase. Saving money little by little this way helps us increase our savings without a whole lot of effort.

Some savings tools suggest daily budgets based on your monthly income and savings objectives. Depending on how much you spend, the app will tell you how likely it is that you’ll achieve your objective.

In any event, we have to remember that, when it comes to increasing our savings, experts recommend setting aside a percentage of our monthly income at the beginning of the month. Instead of waiting until the end of the month to save what we haven’t spent, this method, known as “pay yourself first”, suggests that we set aside 10% or 20% of our income at the beginning of the month and forget about the fact that we have that money. This will enable us to pay off our debts, create a rainy-day fund, and in the best case scenario, invest.

Remember that, while there are many digital financial management tools out there, you need to find the one with the interface, design, and features that suit your situation and current needs best.

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