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Having a budget is the first thing you need to do when it comes to managing your finances. “Money goes out in various ways—cash, direct debits to bank account, credit card, wallets and so on and that makes things complicated. There would be multiple of these," says Kiran Telang, co-founder and direc-tor, Dhanayush Capital Services Pvt. Ltd and a Sebi registered investment adviser.

If we do not track our expenses, we tend to overspend, which leaves less money for savings. “It is important to know your saving capacity. Savings go into investments that then create wealth," says Telang.

Earlier, people would list down their expenses in a dairy to keep track of where their money was going. While an old-fashioned diary will never go out of fashion, personal finance apps can also do the job. These come with a host of features that make it easier to follow a budget. Here are some of the features that these apps offer.

Create buckets for expenses: These apps let you categorize expenses into different categories. So, you can organize your spending under heads like groceries, transport, eating out, entertainment, utilities and so on. At any point, you can go to the app and see how much you have spent under a certain head.

Automatic categorization of expenses: These apps can be synced to your bank accounts and electronic wallets.Whenever you make any payment through a bank account, debit card, credit card or a wallet, the app reads the corresponding SMS and clubs it to the appropriate head of expense. This makes the process of tracking expenses much easier. However, expenses made in cash need to be added manually to the given category. Some apps also give you an option to scan physical receipts to update your expenses.

“Fiscus is a money management app with a highly automated interface, enabling auto-tracking of a user’s bank accounts, credit cards, e-wallets at the transaction level," says Sudipto Roy, founder and director, Finlabs India Pvt. Ltd, which has developed Fiscus.

Create a budget and stick to it: Some of these apps also let you set spending limits for each category, so that it is easier to keep your expenses under control. What’s more, you can set monthly, weekly and daily budgets. “Users have a facility to set up monthly budgets against each of these categories and track them on a real-time basis. Users receive alerts on exceeding the monthly budgets," says Roy. You can set alerts for the payment of utility and phone bills, DTH bills and insurance premiums. Plus, you can check bank account and credit card balances from the app.

View reports: These apps also provide you with visual representations of your expenses and budget through bar graphs, pie charts and flow charts. Through these, you have an idea of how you have spent your money during a certain period. “We have tried to keep the app simple and easy to use, so that users are not intimidated. We send them a weekly summary of their expenses, because this is an app one may not want to use on a daily basis," says Shameel Oswal, AVP product, Capital Float. The personal finance management app Walnut is a Capital Float offering.

Data security: While these app deals with highly personalized and sensitive information, it does’t access or store a client’s personal and sensitive information like actual bank account numbers, login credentials, pin, passwords or OTPs. “We have implemented bank-grade security i.e. 256-bit encryption for data storage and transmission to protect the transaction information," says Roy.

“We ensure that we ask users relevant permissions when they start using the app and also educate them why these permissions are necessary," says Oswal. A user may decide not to give permission to parse SMSs in which case he or she cannot use certain features.

Some apps have a premium plan for which you need to pay for, but the free versions work just as well.

If you have been putting away creating and following a budget, a money management app might be all you need. It is your hard-earned money, after all.

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