4 Reasons Why Budgeting Apps Will Never Give You True Control Of Your Money

 

I know, I know. I am venturing into some dangerous waters here. Budgeting apps have been the craze ever since apps themselves started. I mean the top used budgeting app today has over 15 million users. That’s insane! 

I understand the appeal; however, I worry that many people download these apps thinking that it is the missing link between them and true financial control

The reason I worry about this is because I was that person many years ago, and I want to tell you a bit of that story and why I am an avid believer that spreadsheets are the way to go when it comes to budgeting. 

And to wrap everything up, I also have a shocking revelation that will even surprise those closest to me. Let’s get started.

 

You Have To Fit Your Life To Budgeting Apps

Ironically enough, this extremely popular app that I mentioned with over 15 million users was actually one of the first apps that I tried out for myself, and it honestly didn’t last very long

Don’t get me wrong, it had all the bells and whistles you could hope for. I was able to link my accounts up to it for easy and painless tracking. I had all the pie charts and graphs I could ask for. It was truly impressive in that right. However, after the thrill of getting set up, the twinkle in my eyes began to wear away as I wondered, what now? 

I didn’t really have any guidance on what to do next, so I just continued digging through the app some more. I came across the section where it created a spending allowance with different categories based on what I punched in for my income. Awesome! That was easy! So now I just have to stick to these allowances, right? I was ready! 

Then I noticed something. One of my categories was for buying movies. No, not going to the movies...actually purchasing a movie. Well, that wasn’t really something I did...ever! And to make matters worse, the app allowed only $5 for this category. What movie costs less than $5?! I figured I would just get rid of this category and use that $5 elsewhere. Nope. Couldn’t. I just had to deal with it. That’s how the budget was designed, and that’s what I had to do. 

I never opened the app again. 

Now, granted, this was years ago. I’m sure these apps have come a long way, and I am sure that you can adjust these things now. Please don’t blow me up telling me this - I get it, but you might be missing my point. 

The way a budgeting app, any of them, was designed is how you have to adjust your life, your spending, your routines, etc.. No matter how advanced these apps get, they are always built based on the masses - not you! 

Also, you are not going to be able to backdoor into the code of this app and adjust things the way you’d like it (I’m not a developer, so if that phrasing is all off, forgive me). 

The major concept that I want you to hear with this is that your budget should be fitting to your life. You should not be fitting your life to the budget, and this is just not possible with an app. This leads me to my next point, which is closely related.

 

A Budget Should Be Customized To Your Life And Goals

My absolute favorite part of being a financial coach is all the different people that I get to work with. As you can probably imagine, I have seen ALL KINDS of situations. It’s actually insane how different people’s finances are. We tend to believe that the way our finances look must be similar to those around us, but they are not! 

Having witnessed this over the years, it’s impossible for me to believe that there could ever be a single piece of software that could handle all of the intricacies of all of the different situations out there. There’s just no way! You need to be able to have the flexibility to make small and sometimes major tweaks to any budget in order to truly fit it to an individual’s life. 

However, where do budgeting apps excel? (No pun intended) Simplicity! Their automated nature makes numbers and math and calculations (oh my!) so much easier. Personally, I am a numbers nerd, but 95% of our members are not, which leads me to believe that 95% of people trying to budget are not as well. 

So if we need to be customizable but still want the simplicity of automation, where does that leave us? Well, spreadsheets are exactly that happy medium!

In a great blog written by Jim Wang from wallethacks.com, Wang lays out “why budgeting with a spreadsheet is still king. And will always be king.” He describes using a spreadsheet for your budget as a “custom tailored, living tool.” These two aspects are huge in not only what you need now but what you are going to need in the future. 

One, we need to be able to customize our budget to fit our life (as opposed to fitting our life to a rigid budgeting app as previously discussed). Two, life is dynamic. It is always changing, and, I hope, you are constantly growing with it. Your budget needs to adapt and morph to these changes as well. Maybe tracking your net worth is not as important to you now, but it very well could be in the future as you continue growing. By having a living budget, as Wang says, you can make these customizations at any time and are not limited by the rigidity of an app’s software.   

 

The Extreme Simplicity of Apps Leaves You Uninvolved

One of our first members was a very good friend of mine. We have always had great conversations about money, best management practices, ideal investments, etc. 

When I first launched Metanoia, he was extremely supportive and hopped in right away. He let me take him through my entire coaching program, get him set up on our Metanoia Budget, and was involved in all our community discussions. In that time, he was able to take his already well established financial management to new levels - it was great! 

Now, I knew he was an avid budget-app user and fan prior to working together, and almost 2 years later, I discovered that he was still using the Metanoia Budget to manage his finances. I was shocked because of how set he was on using apps in the past

I wondered to myself, was he really still using our budget after all this time just to be supportive of me, or was he finally sold on the value and power of customization? 

So...I asked him! His response was not what I expected, and it blew me away. 

At first, he laughed, stating that he would never use a budget he felt was inferior just to “support me.” Knowing him like I do, I had to laugh too at the fact that I even considered that. He said, plain and simple, that he had far more control over his money using our spreadsheet budget, coupled with our monthly strategy, than he ever did before using apps. “It’s just better, man,” he said. 

I couldn’t help but ask him to explain to me what his budgeting app (by the way, it was the same top-rated one mentioned twice before) lacked in comparison to the Metanoia spreadsheet budget. 

He said that because it was so automated, with linking your bank account and automatically updating transactions and what not, that it felt too uninvolved. He felt like he was watching his finances happen rather than actually taking control of them and making them happen

I honestly thought it was because of customization and flexibility, but here are my members teaching me things - as always. 

Research backs this up, too! A simple yet powerful blog from manuelmattz.com lays out 5 Psychological Benefits of Tracking your Budget and Spending. There is something that happens in us when we are involved with our money is such a way. Yes, it takes some work. Yes, it takes some time, but the benefits it adds to your finances and to your life as a whole make it well worth it. I won’t go into all the details of these benefits here, but definitely go check out the blog for yourself. 

Your finances will not passively go to where you want them to, so how can we expect to use a passive tool to help us get there? It just doesn’t work. 

 

Time For My Shocking Revelation

I told you I had a shocking revelation, and it’s time to wrap up this blog by sharing it. This may sound strange to hear coming from a financial coach, but hear me out. 

I mentioned earlier that I am concerned that many people are downloading budgeting apps thinking that it is the missing link between them and true financial control. While I don’t doubt that some people can make it work with these apps, I worry about the many more who do not and think that budgeting just doesn’t work. 

I am here to tell you, again, that a budget of any kind does not give you control of your money. 

True control begins and ends within you

A budget is simply a tool to help you get organized, collect data, and make a plan. However, the real key is found in sticking to the plan, and this happens by developing and exercising different inner principles such as discipline, self-control, and overall stewardship. In this process, support and accountability are paramount. Some people can manage doing this journey on their own, but most of us need help with our questions and thrive when somebody or some group holds us to our goals. THIS is where true financial control can be achieved

Now, the entirety of this blog is to lay out a few points of why I believe spreadsheets make better budgeting tools than apps do, but at the end of the day, the reason why a budgeting app will never give you true control over your money is simply because NO budget will. 

 

Conclusion

Spreadsheets make for FAR better budgeting tools than apps ever will. 

For one, budgeting apps are far too rigid. You must fit your life to the app. Spreadsheets give you full customizability, so you can fit your life to your budget. 

Also, as your life grows, changes, builds, and so on, you can adjust and adapt your spreadsheet budget accordingly. An app is static. Your budget app will look the same on year 5 as it did day 1, barring any cosmetic or feature updates along the way, of course. The point is, none of those updates will involve customizations specifically made for YOU.  

Lastly, the automated nature of apps was meant to be helpful, but at a certain point, it began having the opposite effect as they became too uninvolved. Having the balance of automation and manual involvement that a spreadsheet provides gives you better awareness and tighter control of what’s going on with your money. Rather than simply observing your finances happen on an app, you can make them happen and crush your goals faster than you ever thought possible using a spreadsheet. 

Ultimately, the final nail in the coffin for budgeting apps is the simple truth that NO budget can give you true control of your money. Control begins and ends within you. Continue developing your discipline, self-control, and overall stewardship. Find a budget spreadsheet template to help you get organized, collect data, and make a plan. Finally, set yourself up with the support and accountability you need to then stick to that plan, whether this is a friend, a mentor, a coach, whatever works best for you. 

 


 

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Your Coach,
Fern

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