BackThe app-y way to auto-track your expenses
Using an app to keep a tab on spending beats mental accounting, but the scope is limited by access to information
Premium
When Harika Garapati, 25, who works with an audit firm in Mumbai, heard of an app that will help track her expenses, she decided to try it out. “I have used Money View app for a month," said Garapati. The app tracks her spending and gives an expense summary, details of her bills and account balance, and so on.
While most of us resort to mental accounting for what we spend, financial planners say this does not give the right picture and suggest that all expenses, no matter how small, should be noted. This is because if you have the exact details, you will not only be able to budget better but will also identify unnecessary expenses.
Usually, those who track their spending patterns, do so manually—by taking notes, maintaining a journal or using tools such as an excel sheet on your computer or mobile phone. Since it is a manual process, it can be tedious. Due to lack of discipline, most of us follow this process in fits and starts; only some are able to do it daily.
Now there are apps available that help you auto-track expenses. Mint Money takes a look at three such apps—Walnut, Money View and Smart Spends—to understand how they works, and whether they are indeed a level higher than maintaining a journal.
What’s common among these three apps is that all of them auto-track your spends through SMS. But they differ in terms of user interface, data tracking process and some other features. Here is a look at them.
How they work
If you have a bank account, your bank sends you an SMS to the registered mobile phone number every time you make a transaction. “Few years ago, the Reserve Bank of India made it mandatory for banks to send SMS to all account holders in case of a transaction. Hence, every time money goes out, you get an SMS," said Puneet Agarwal, co-founder, Money View, which was launched in October 2014. There are normally two kinds of SMSs from banks—mandatory and non-mandatory. For transactions such as cash withdrawal from an ATM, swiping debit or credit card at a point of sale terminal, banks mandatorily have to send alerts, irrespective of the amount. The Walnut, Money View and Smart Spends apps use these SMSs to auto-track your expenses and give you a consolidated list. Since the source of information is the SMSs that banks send, the accuracy of the data depends on what the banks send.
How to use
Download the app on your smartphone from the app store. Currently, all three apps are free and are available only on Android phones. Once you download the app, it asks for permission to access phone details such as SMS, and contact information. After accepting the terms and conditions, you can use the app. The first thing the app will do is analyse your SMSs. The process takes a couple of seconds to a minute. At the end of this, you will get a consolidated list of SMSs. “We use an algorithm to search transaction details and collate at one place. The algorithm tracks SMSs that come either from a bank or a company. For instance, any SMS that comes from a 10-digit mobile number is considered as personal and that SMS is not tracked," said Amit Bhor, co-founder, Walnut, which, too, was launched in October 2014.
Once the app is active, it will give you a consolidated list of expenses. Walnut gives an overview of your spends, bank accounts, credit card use and messages from companies on real time basis. It lists out monthly expenses along with a list of shops you made a payment to. It shows you how many times you have withdrawn cash at ATMs. It categorises your spending into travel, shopping, food and drinks, health and groceries. It gives you a bar chart and a pie chart in which you can see your month-on-month spending trend.
In case of Money View, you also get to see your bank balance. If a user has three bank accounts, the app will give a consolidated list of all three balances. “Some banks send the latest account balance in every SMS. To get a consolidated list we pick the balance from there. However, some banks don’t provide the account balance. If the app user wants, she can request for an account balance update through the app itself," said Agarwal. The app will send an SMS on your behalf to the bank or activate a missed call to it, according to your choice. “Users may be charged by the telecom service providers for some SMS request. Missed call option is free of cost," said Agarwal.
Smart Spends also gives a breakup of expenses under various categories and lists out merchant details. Apart from these, it has a “card suggest" option, which suggests the best card to use from a purchase or payment from all your existing cards.
You can ask for a consolidated statement of all income and expenses. Another way in which the apps can help is by allowing you to set limits on your expenses. Before you cross the limit, you will get an alert on the phone that can helps you stay within your budget.
Worth a try?
The basis of the information is limited to what is available on electronic channels that communicate through SMS. Electronic transaction that doesn’t have an SMS won’t be captured. Though the cash that you withdraw from ATM in lump sum will be shown, you will have to manually key in transactions you make with that cash. The data gets updated on real-time basis.
When the Mint reporter used the apps, some bill payments got recorded but some didn’t. For instance, though a credit card bill was paid on time, all three apps showed it as delayed or not paid yet. The app creators said this happened because the app was only recently downloaded.
These don’t work smoothly with irregular expenses. For instance, Garapati travels often for work assignments. Her official expense is reimbursed, so she has to do a manual check for these every time.
When you accept the terms and conditions on these apps remember that it will use your information such as SMS details, photos, and location (as most apps do). Only if you are comfortable disclosing these details should you download these apps. If using an excel sheet or noting down in a diary are too tedious, apps are the way to go.
Smart Spends is a product by Times Internet Ltd, a part of Bennett Coleman & Co. Ltd which publishes The Times of India and The Economic Times.
HT Media Ltd, publisher of Mint and Hindustan Times, competes with Bennett Coleman & Co. Ltd in some markets.
Unlock a world of Benefits! From insightful newsletters to real-time stock tracking, breaking news and a personalized newsfeed – it's all here, just a click away! Login Now!
