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The Evolution of Budgeting Apps
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“There’s an app for that…”

Managing your finances used to be a difficult and time-consuming task. Prior to smartphones, you’d often find yourself standing in a queue in front of a cash machine or your bank to get a statement. Then you’d have to balance your chequebook to make sure you’ve not gone over your limit and write down your monthly budget on paper. Planning your budget and setting spending limits has come leaps and bounds since then.

The major banks started small, offering online banking options that allowed you to check your balances and transactions, make payments and even open saving accounts, credit cards and short term loans. As larger institutions, the traditional banks weren’t as fast to innovate, which created an opportunity for app developers to create spending tracker apps. They would connect to your bank account and analyse your monthly spending, showing how much you were spending in certain areas, such as food, entertainment, clothes etc. It provided an easy way to visualise where your money was being spent, allowing you to make easier decisions on what to cut back on.

AI has taken things a step further, allowing apps to provide more intelligent insights into your spending habits. Instead of just showing you what you’re spending, apps such as Cleo can now act as your own personal assistant. Cleo can spot spending trends, habits and even automatically put money into a savings account based on what it thinks you can afford. As a chatbot, Cleo can hook into Facebook messenger and you can have a back-and-forth conversation, allowing you to manage your finances quicker and easier than ever before.

Since then, the banks have caught up. HSBC UK has recently announced that it has been testing a brand new smartphone app that will not just track what their users are spending their money on, but also “nudge” them if they exceed their spending limits. The “nudge” will consist of an alert sent by the app when users start spending more than their usual habits in certain areas such as grocery shopping or clothing shopping. HSBC have announced that will also allow customers from rival banks to use the app, which is due to go live in early 2018.

Apps have the opportunity to make our lives so much easier, but it’s always important to never to be too dependent on them. It’s always good to learn money saving skills that we can pass on to the next generation. Combined with intelligent apps, having both the skills and the tools can leave us with a good financial outlook.


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