Disclaimer: Just so you know, if you order an item through one of our posts, we may get a small share of the sale.
If your phone isn’t loaded up with a few money apps, you’re missing out. By pairing state-of-the-art tech with simple, easy-to-follow saving techniques, money apps can transform your ho-hum savings account to help you meet your money goals. That’s a big deal since the majority of Americans struggle with financial literacy.
We’ve rounded up a few of the most popular free money apps available on both the Apple Store and Google Play. Before we introduce them, remember: Money apps help you put good concepts into practice, but they’re useless if you don’t put some effort into developing sound financial habits. What’s more, an app that works perfectly for your best friend might not appeal to you.
“I always suggest using what works for you,” says Ellie Thompson, CEO of Money Therapy Consulting. “If you find that budgeting apps are distracting, go without. If you find them useful to keep track of your finances, then there are many to choose from. Just like a diet, a budget should be tailored to what works for you.”
With that said, Thompson notes that certain money apps can make intimidating ideas—for instance, sticking to a budget or saving for retirement—much more approachable.
If you’re looking for a place to get started, here are a few free money apps that have caught our attention.
The granddaddy of free money apps, Mint has revamped budgeting for the 21st century. Enter in your bank accounts, credit cards, mortgage, car loan—pretty much anything that involves a bank or credit union—and Mint will build your financial portfolio. It has powerful tools for creating budgets and saving money, and because it tracks purchases automatically, it’s relatively hands off.
“Money managing apps are useful because they aggregate all of your information into one dashboard,” Thompson says. “They allow you to check in and see where you stand financially without having to log in to every different account. They help keep you accountable if you are striving for a financial goal, and they remind you if you have gotten off track.”
“Mint is made for the masses, but one drawback is that it does not hone in on investing capabilities,” she notes.
“Once you know your spending is tracked, it’s easy to highlight the areas of improvement,” notes Sean Potter, the mind behind the popular My Money Wizard blog. “And just knowing there’s a record of my spending somehow encourages me to spend less and save more.”
With that said, Potter prefers the similar Personal Capital app for his money management needs since it provides a better set of tools for monitoring investments. Personal Capital, is also free, but Mint’s probably the better choice if you’re taking your first steps toward a healthier financial future.
Digit automatically transfers small amounts of money out of your checking account to help you move painlessly toward your savings goals. The FDIC-insured service takes a small amount per day based on what you’re earning and what you can afford.
When we signed up, the app moved $6.50 toward our rainy day fund, and for the first week, most automatic transfers averaged around $5 to $8. After a week, we stopped thinking about the transfers but our balance continued to grow.
Digit is designed to work primarily through text messaging but there’s a free mobile app and a web app you can use as well. After you’ve set up your account, you’ll receive regular updates on the status of your savings goals, and the positive feedback makes it easier to commit to the process. You can also add additional users to your account, which can be helpful if you have a joint checking account.
The downside is that Digit is only free for the first 100 days, at which point it costs $2.99 a month. It does provide 1 percent annual cash back on saved funds that’s paid every three months. In other words, you’d likely save more by using some discipline and a standard savings account, but if you’re having trouble putting any money away, Digit’s algorithm-driven system deserves some attention. There is something liberating about saving money without actively thinking about it.
Like Digit, Acorns is designed to turn the process of saving money into a painless part of your day. Install the free app, connect your debit and credit card accounts, and the app will automatically round up your purchases and invest the difference. In other words, if you buy a latte for $4.93, Acorns invests $0.07 on your behalf. The investments are diversified over thousands of stocks, and you can choose a risk level that matches your investment strategy.
“Investing in the stock market can be intimidating and scary, but Acorn settles the uneasy millennial mind,” says Natasha Rachel Smith, personal finance expert at TopCashback.com. “This is a great app for those who are new to investing and are genuinely interested in learning about the stock market.”
Although it eventually makes money, note that technically speaking Acorns isn’t free; it costs $1 per month for all accounts with a balance under $5,000 and 0.25 percent of the balance per year on accounts over $5,000.
To really make the most of Acorns, you’ll want to set up recurring investments since small roundups won’t exactly set you up for retirement. Still, Acorns’ simple approach makes it a powerful tool for first-time investors.
Free money apps can get you started, but they’re a means to an end.
Once you’ve used these apps for a while, try increasing the percentage of money you save from each paycheck.
“I urge my clients to use the 50/20/30 rule if they are new to budgeting,” Thompson says. “This is where you spend 50 percent of your income on fixed expenses, 20 percent on savings goals, and 30 percent on guilt-free spending. I find that percentages are much easier to stick to and to start out with. Also, it gives you a good baseline into what areas you may be overspending.”
Be sure to check out our guide to budgeting for a more in-depth look at money management. Remember, financial literacy doesn’t mean living in squalor and meticulously counting pennies; it means guilt-free spending, more financial freedom, and, most importantly, peace of mind when something unexpected happens.