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3 budgeting apps to help you save for a home

By Zak Stoiber

March 2021
If you think you might be allergic to the word “budget,” you’re not alone – 65% of Americans don’t know how much money they spent last month. In fact, before I tried out the 3 apps detailed in this article, I would count myself among them! However, as I finally started coming around to the idea of buying a home, I realized I needed to pull up my big boy pants and do some real budgeting. 

First of all, why budget?

When you think about saving to buy a house, you probably think first about the down payment. You can put down as little as 3-5% with low-down-payment options like mortgage insurance. But that can still feel like a lot of money for many of us – 5% down on a $250,000 house would still be $12,500. in addition to a down payment, think about closing fees, a moving company, new furniture, and maintaining an emergency fund. It adds up fast!

My experiment with 3 popular personal finance apps

Thankfully, budgeting doesn’t have to involve a calculator, a spreadsheet or even a pen: just search for “budgeting” on your phone’s app store to see just how many budgeting tools are out there. While you might want to try a few, it can be tedious to connect all your accounts to multiple apps to truly give them a test drive.

Luckily for you, I did the tedious part for you and got myself fully set up to test out 3 of the most popular and well-reviewed budgeting apps: PocketGuard, Acorns and Mint. Here’s how they stacked up.

Know your pocket cash with PocketGuard

The first step in creating a good budget is to understand what your current spending habits look like, and PocketGuard seemed like a great place to start. While other apps are flashier and more robust, PocketGuard is mostly focused on one thing: telling you how much money you have “in your pocket” to spend each day, after factoring in your income, bills, and spending goals.

How it works: The set-up for PocketGuard is remarkably similar to the other apps I’ll cover in this article. After creating an account, you’ll need to link all your bank accounts (including various credit cards, loans, etc.) for you to get the maximum benefit. The app looks at recurring withdrawals and deposits and instantly calculates how much money you have “in your pocket” – aka, how much you can spend for the rest of the month, expressed as a daily amount, to come out even. This number will automatically re-calculate if any of your accounts register a change, which means the money “in your pocket” will change in real time. 

Of course, you’re here to save money, not just come out even, and the app really shines once you set a savings goal. Do a little quick math (or use one of our homebuyer calculators) to determine how much you’d like to save, and how quickly. Let’s say you’re looking to save $200 a month to put toward a down payment. Once you create this goal, PocketGuard will automatically deduct that amount from your “pocket cash” each month. 

Pros:

  • The savings goal makes saving money direct and simple
  • Flexibility! If my “pocket cash” is currently calculated at $25/day for the rest of the month and I decide to order take-out for $50, as soon as I hit that order button, I’ll see my “daily allowance” go down for the rest of the month and can adjust my spending accordingly

Cons:

  • More detailed budgeting is locked behind a $5/month subscription. If you do pay for “PocketGuard Plus,” you’ll be able to set specific budgets for categories such as groceries, entertainment, or restaurants and the app will alert you if you’ve gone over your allotted budget for any given category 
  • Awkward in-app promos: If you select the “earn extra money” option, you’ll be offered the option to take on a side-gig like becoming a ride-share driver or pet-sitter. If you select the “lower your bills” option, they offer to try to lower your bill on certain utilities (mostly cable providers) by negotiating on your behalf. Then, if they do manage to lower your bill, they’ll take 40% of the difference in price. Options like this make it abundantly clear that the app is also making money on you through referrals

Who should consider this app: Folks who are new to budgeting or prefer flexibility to specificity. 

Turn pocket change into savings with Acorns

OK, so let’s say you’re now saving $200/month. Where are you parking those savings? I’m not a financial advisor, but I do know that a checking or savings account doesn’t offer a great rate of return. If you invest what you save each month, you may be able to grow your savings at a faster pace. It’s important to note that investing in a portfolio of stocks and bonds does come with greater risk and is less “liquid” than your savings or checking account, meaning it may take a few days to withdraw money. And if you withdraw all or most of that money for a down payment, you’ll have to pay taxes on the gains. 

How it works: Once you decide how much money you want to invest each month, Acorns will automatically transfer that amount from your connected bank account to buy shares in stocks and bonds. From there, you can watch it grow and make changes to your portfolio at any time.

So how do they decide where to invest? You’ll take a quick questionnaire about how much risk you are willing to take on, how much you plan to invest, and how long you are planning to invest your money before cashing out. After answering their questions, I was assigned a “moderately aggressive portfolio,” about 80% stocks and 20% bonds. 

You can also enable “round-up” investments. When you choose to “round up” and connect your credit and debit cards, Acorns will round up each purchase you make to the nearest dollar and automatically invest it in your portfolio. 

Pros:

  • Makes investing more approachable and automated for those just getting started
  • Hypothetical investment charts make it easy to visualize how your money will grow
  • Round-up feature makes it easy (and fun!) to boost your savings 

Cons:

  • On your homepage you’ll be prompted to “earn more money” by selecting an online vendor like Chewy, Walmart or eBay. If you make a purchase in the same session, a dollar amount or percentage of your purchase will then be deposited into your account. While this promotion technically adds to your savings, you’re also being prompted to spend money you probably wouldn’t have otherwise spent
  • There’s no way to customize your investments outside of selecting one of Acorns' 5 pre-determined portfolios. I’d appreciate the ability to add a few historically reliable stocks to my portfolio. Instead, my investments are now spread across multiple apps – but I suppose that’s where the benefit of something like Mint, the final app I researched, comes in! 

Who should consider this app: Savers who are willing to take some risk to get a better rate of return, those who are new to investing.

See everything in one app with Mint®

Of course, I couldn’t do this experiment without trying out the world’s most popular personal finance app. Mint positions itself as the center of all your finances. 

How it works: Once you connect your accounts, the home screen shows your net worth (including investments, which I connected to my Acorns account), recent transactions, upcoming bills, credit score and even a budget section that works similarly to the paid version of the PocketGuard app. It even graphed the categories where I spent most of my money this month, such as groceries, entertainment, etc. 

Pros:

  • Gives you the big picture, including your net worth, by combining all expenses, income, cash, and investments
  • Unlike the other apps, Mint shows your credit score. You’ll see a nice breakdown of how your credit score is calculated, including the impact level of different categories and an estimation of how well you’re scoring in those areas

Cons:

  • Mint asks you to choose a goal (I selected “maximizing my savings”), but it doesn’t seem to personalize your experience based on your answer – and you can’t change it later
  • Mint starts you out with an auto-filled budget that can be clunky. Mine included a “restaurants” section which was already in the red beyond the $20 they allotted me. I appreciate the idea, but I did find it a little strange that Mint attempted to create a budget for me that I had already failed at achieving

Who should consider this app: If you want a single app to be the center of your personal finances, including instant access to your credit score, then Mint might be for you.

Which one was right for me: PocketGuard, Acorns, or Mint?

I set out to try to find the best budgeting app for someone looking to save, and ironically, I’ve found a reason to keep using them all. PocketGuard helps me keep my spending in check on a daily basis, Acorns helps me invest my savings without even noticing it, and Mint helps me see everything at a glance, including my credit score. And there are many more budgeting apps and tools out there, all with their pros and cons. No matter which tools you choose, maintaining a budget, investing, and saving is probably easier now than it ever has been, and all without a calculator in sight. Sign me up!
The opinions expressed in this article belong solely to the author and are not an endorsement by Readynest, Mortgage Guaranty Insurance Corporation or any of its parent, affiliates, or subsidiaries.
Mint® is a registered trademark of Intuit Inc.
Tip Fishburn

Anything regarding the safety/security of these Apps ? Linking bank accounts gives me pause here as I still go directly to my bank's homepage and have not made the leap of faith yet there to trust that info to outside/independent Apps... Just wondering - Thanks !

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Zak Stoiber is a digital marketing program specialist at MGIC and current renter. He enjoys reading books, some of which do not contain pictures, and is looking forward to soon buying a home with his partner so he can expand his board game collection – the dedicated shelves are already full, and if he buys one more game he’ll be looking for that home without the partner.
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