Smartphone apps about our personal finances are becoming increasingly popular. But the question is, do they make us better at managing our money or do they encourage us to spend more?
For example, the Revolut app gives you a breakdown of what you spent, and, if it's too much, you will know to be more careful the following week. When you make a budget, put a certain amount weekly on the card and stick to that. The application also has an automatic savings system and free cash withdrawals abroad of about $ 260 per month.
Global downloads of financial applications reached 3,400 million in 2018, which is 75% more than three years ago.
The popularity of these apps is growing more rapidly in emerging markets, such as Brazil, India or Indonesia. Facilitating the sending of money to other people seems to be one of the main reasons for their popularity in these countries.
The three most downloaded money applications in the world in 2018 were Google Pay and PhonePe in India, and Alipay and WeChat in China. All focus on sending money as a main function.
In the United States, 92% of young people between the ages of 18 and 37 use financial applications, and they do it mainly to control expenses and pay bills.
Georg Ludviksson, executive director of financial technology firm Meniga, based in Reykjavik, says people who start using financial applications spend 7% less on average in the next six to twelve months. But he admits that breaking credit cards can have a bigger impact on expenses.
His company is developing customized banking applications for entities such as the Spanish Bank Santander, the Swedish Skandiabanken and the Dutch ING Direct.
Regularly reviewing where we spend our money seems to be key to making a successful budget. If you are constantly reminded of how much you have spent, it is more painful to pay for the next products.
But if the app to pay simply make spending money easier, with less emphasis on managing the budget, we may end up spending more than before using the app. To prove this, you just have to think about how fast and convenient it is to pay with contactless systems.
Money Dashboard makes your past expenditures evident by allowing you to see all bank and credit card accounts in one place and classify transactions to show what a person spends more.
The best money apps are trying to be like Facebook. You read your feed, your transactions are there, but also some ideas and details about what you are spending.
Economists on the behavior of Harvard Business School and the University of Edinburgh found that people who use Money Dashboard saved about 40% of discretionary spending.
There is a correlation between people who consult the application regularly and their ability to adjust to a budget.
