16% of the UK’s adult population has a debt problem.
And debt is associated with a higher risk of mental health issues. For those in debt, the least thing you want when in debt is to tie yourself down further.
But you don’t need to. A good budget helps you to breathe easier and see clearer - for good! You’ll cut out unneeded expenses, so your paycheck doesn’t disappear. With a good approach, you’ll simplify your life and free up time.
Ready to begin? Just download your app, it brings all accounts to one place - in this guide, we cover the smartest budgeting apps.
Our Top Pick of Best Budgeting Apps (UK) 🇬🇧
Meanwhile, the UK.’s debt issue has increased to 28% for single parents.
Budgeting simply means balancing outgoings against earnings. If things don’t balance out, then there’s a budgeting issue. Many aren’t aware whether their expenses flow out faster than their earnings, and so they gradually sink deeper into debt.
Focus your budgeting journey using the Seven Baby Steps? 👶
1. Lumio review – Best Overall Budgeting App for Capabilities
The free-to-use Lumio app focuses on reducing unneeded spending, squirrelling away cash that won’t be noticed by you, and keeping track of the net value of your bank accounts.
In this way, it’s the honeybee of the budgeting-app world, busily working behind the scenes to link all of your bank, pension, credit card, savings, and investment accounts into a single dashboard. Then sorting the bills into different categories, as separate from your spending and income, to give you a down-to-earth portrayal of your finances – at a glance.
More than 50,000 user accounts are connected to Lumio. In addition to categorisations, the app goes into high-resolution detail as to your cash-flow, quietly humming around and discovering insights with opportunities to adjust your earnings and reduce expenses.
Which makes this ideal for budgeters who want to avoid laborious spreadsheets but still keep ahead of their finances. And we’ve ranked it the top budgeting app because it does more than most of its competitors in this space – gone beyond just tracking ingoing and outgoings.
Its dashboard will automatically allocate financial patterns to categories, but you can review each transaction individually and manually label it to a more defined category.
The setting up process is a matter of a few minutes. Just have details to hand for relevant accounts that you want to connect to Lumio. Most exceptionally, if an account doesn’t show up directly on its preloaded list, you can manually connect through an offline route.
Lumio also offers guidance on the wider-ranging components related to savings, so that you can amplify your progress towards your budgeting goals to a sunny tropical island 🏝️.
2. Money Dashboard – Best Budgeting App for Extreme Focus
In today’s world of changing economic powers and major index funds, options need to be kept to a minimum for any real productivity or earnings to occur.
The most efficient businesses, therefore, often have all finances in a single account, so they can clearly see their cash flow. While major investors never base big investment decisions on more than three key economic factors.. The same pattern is happening for cybersecurity.
Next up is Money Dashboard, a Scottish founded budgeting app that currently has over 600,000 users, meaning it’s one of the most popular budgeting apps the UK has.
Money Dashboard works similarly to Lumio in that it lets you focus every account – ranging from credit cards, bank, investment, store card, and investment accounts – into a single portal. Once downloaded, the app begins analysing and assaulting your outgoings.
You can also select any individual transaction that has automatically been categorised and annually reallocated to a more defined label.
While a few budgeting apps restrict you to synchronising your payment schedule with the end of the month, Money Dashboard also lets you reprogram according to your unique payday flow. This is good if you get paid more than once per month.
You can also add any “scheduled payments” due to leave your account on specific days of the month, such as utility bills, council tax, and rent. Fine tuning both the payment and outgoings schedules is the fundamental way to budget in the same way that her business would – in other words, seeing exactly how much net profit cash flow remains once bills are factored in after your payday – across a certain time horizon.
All of these reasons, Money Dashboard is an excellent companion for extreme focus on balancing outgoings versus revenue. A recent feature addition is the ability to move funds between your various accounts and Money Dashboard, although there is no prepaid card option yet.
On the above, technically speaking, the app doesn’t itself perform the transaction instead simplifies the operation so that it can happen in a matter of if you button clicks.
3. Emma – Best Budgeting App for Self-Learning
So next on the list is Emma, another straightforward optimising app for balancing your wallet. It brands itself as your “best friend for finances” and features budgeting, tracking, and trend-recognition As included. As well as bringing together every one of your accounts, into a single hub.
But the standout offering of Emma is the way it integrates learning algorithms in order to properly identify and monitor transactions. Once a particular kind of transaction has been identified, it is sorted into a category, and any other similar transactions are added to that basket.
This algorithm-powered computational model offers the best value for time saved, by simplifying the whole process of seeing exactly what is going where and when.
Emma focuses on UI/UX that is a pleasure to use. Rather than flat charts with lifeless figures, the meaning of your financial reports are distilled into highly visually oriented designs that give you the big picture at a glance – the amount you're spending at current and where it’s going.
The learning algorithm it’s practically effective and can readily adjust to your changing financial patterns.
Nevertheless, Emma doesn’t have any tracking ability for credit scores. Which is a considerable drawback as tracking your credit score can be a valuable aspect of budgeting.
Its app also lets you do stable budgeting, but can only look across archival data in the last quarter of transactions for its calculations. So if you have a ton of recent anomalous transactions, the app may spit out a budget that seems nonsensical relative to your typical patterns.
The third weakness is some difficulty in the app discerning between multiple streams of income.
4. Yolt – Best Budgeting App for Full Open Banking
Yolt also doubles up as a money saving app. Founded in Amsterdam in 2016, the app takes full advantage of its full FCA regulatory approval and open banking – by not only letting you gather together all of your accounts, but also offering you a prepaid card system.
With Yolt, you can do bog-standard amalgamation of all of your real-time accounts into a single dashboard to at-a-glance view your cash flow.
Yolt will also consider this data and collate it into a total smart balance that is generated only after deducting every expense such as rent and direct debits from these multiple balances.
In addition, Yolt churns through this information and calculates your average expenses according to categories. Which helps you to adjust outgoings according to the area without having to view each account portal separately.
As with Lumio, you can comb through individual transactions listed in each category and assign them to a more defined category, such as family holiday or drinking out with friends.
Yolt seems to have a special contactless feature in the works that aims to let users transfer cash between accounts including to family and friends. This might work similarly to PayPal but the feature is still in beta tests and isn’t open to all users yet.
For any who do have access to this beta version, the large financial institutions (six in total) that work with this feature include Halifax, Bank of Scotland, RBS, Lloyds, Natwest, and Ulster.
5. YNAB – Best Budgeting App for No-Nonsense Privacy
YNAB could be put into first-position, as it’s been around for some time and has become many people’s favourite simple budgeting tool, particularly Lifehacker readers.
An abbreviation for “You Need a Budget,” in line with this no-nonsense branding, YNAB aims to give you a viewport into your finances without needing to give tons of historical data. Its mission statement is to help you save more, get out of debt, and set a budget that makes things consistent.
YNAB differs from the other financing apps on this list because it doesn’t put any focus on historical spending patterns. It instead looks ahead to a budget plan that is affordable according to your current account balance, then updates itself according to how this changes across time.
On one hand, this makes its insights shallower and slower to adjust to your current habits. On the other, it sets a no-nonsense most direct line-to-victory from where you are, to being debt-free. This is a helpful approach especially if you do not want to synchronise your accounts in order to begin budgeting. It even attempts to forecast estimates for any investments.
Rather than simply offering simple solutions and automations, YNAB makes an effort to provide educational material and guidance on the mindsets and practicalities of setting consists in budgets and dealing with debt.
Which makes this a combination of an educational resource, and an app for streamlining your budget through reducing wasteful purchases and working with your performance by updating itself.
Best Budget Apps – Buying Guide 📊
This section is good for beginners who are still learning how budgeting apps work. It should also help you to discern between the top budgeting apps available to use:
Budgeting is the practice of spending money on a plan or structure. The structure is called the budget. And this plan is designed to know ahead of time how much money will be leftover across time, to handle all of the things you require or would like to do.
If you find you do not have enough remaining after payday to accomplish all of the things you need and would like, use a budget to optimise your spending on the most essential and important things.
Why budgeting is so key ⛵
Instead of finances sailing away out of control, spending according to a plan unlocks pools of wealth that you can use for investing in real opportunities, or to sail away on a well-earned vacation.
But at root, a budget designed to keep you out of rock-bottom bond debt, or to help you work your way out of it, if you are already in this position.
Budgeting vs. Saving
Budgeting focuses on forecasting your revenue and expenses across a specific time horizon – in order to figure out your net worth (the difference between the two) among other things. This computation usually draws from historical data, or at least data updated on a periodic basis.
A budget can be as simple as saving ten percent monthly. And it can be for an individual, or a group of people, family-household, corporation, government, even a nation – any entity that spends and earns cash.
On the other hand, savings are whatever remains after expenses are deducted from disposable revenue. It’s your indisposable net worth.
Importance of each
While budgets give you a financial plan, typically a year, savings become the result of this practice. Using both massively amplifies the likelihood of success of any financial undertaking. In short, budgeting eases saving and tells you exactly how much cash-flow will go into each savings bucket.
Strategies for amplifying both
Once you are in the habit of using overdrafts or other forms of credit, to stay afloat (one example of this phenomenon is the ‘Buy Now, Pay Later’ that companies like PayPal offer), debt will eventually compound and eat into any savings space. Which exponentially decreases how much you can magnify your income through investment channels. We’re seeing this happen at the international scale.
Whether it’s a corporate budget to run at peak efficiency, or personal budget to manage individual or household finances, the following tips are a way to start, with adjustment for circumstances:
Budgeting Tips - “The Seven Baby Steps” 🐤
There is no budgeting, business, or journey without a mission. The following are common-sense tips based on down to earth money saving expert Dave Ramsey – while his ‘EveryDollar app’ may not be the utmost-best budgeting app you can find, use his Seven Baby Steps to get a good foundation as your first steps to budgeting.
- ☑️ Baby Step 1: Have at least £1000 saved in your Your Starter Emergency Fund - this first basic step gets you to save a grand as quickly as possible. Your emergency fund will insulate you from unpredictable life events that can’t be foreseen. These always occur. Avoid getting slowed down right from the start!
- ☑️ Baby Step 2: Get rid of all debt (not the house) via the ‘Debt Snowball’ - Next up is to payoff auto-financing, credit card debt, and any student loans. Create a list of every debt minus the mortgage. Stack according to volume, ignoring interest rates. Pay as much as you can on the smallest debt, opt for minimum payments for the rest. Once again: pay as much as you can for the new smallest debt - rinse and repeat, until it’s all paid off. Don’t worry about interest rates on the big debts, consistency will win out. Now the snowball is starting.
- ☑️ Baby Step 3: Now start to save between three and six months of expenses, which recorded the Fully Funded Emergency Fund - Once all of the debts cleared, repurpose that snowballing flow of money into a fully funded emergency fund that covers up to half a year of your expenses. Which will insure you against larger unexpected life events, such as losing a job, or something experience breaking down, without collapsing into debt again.
- ☑️ Baby Step 4: Channel a quarter of your household’s total income into retirement - Now that debt and large financial life surprises are accounted for, you can look ahead to investing 15% of your total income into retirement. So that you can work in later life if you want to, NOT because you have to. Professional investors can help you to build a robust strategy.
- ☑️ Baby Step 5: Make savings for your Save for your children’s university fund - By now, would that of the house is paid off, retirement savings are underway. So the next step is to begin saving for your kid’s university or other expenses.
- ☑️ Baby Step 6: Pay off the mortgage early - Bringing everything on home. Baby Step 6 is the real manoeuvre. Your mortgage is the big thing separating you and a life that is completely free of debt. Just think of a life with zero house payments? Clearing your mortgage off early also has a secondary consequence of saving between tens and hundreds of thousands of pounds in averted interest.
- ☑️ Baby Step 7: Start to build wealth and give back - Wealthy people can actually do what they want with their time! So baby step seven is to both crank up investments to grow wealth, also how much you give back to others who have less. Seeing as your children are already provisioned for, you can now leave as deep a legacy as possible!
How Does Open Banking Improve Your Budget?
If a third-party app has access to your accounts, this increases how many ways it can streamline your money’s management, and how easily-visible this all is. The simplest (and most practical) example of this is being able to see all your account balances in a single figure, seen on your dashboard – which can be further compiled to show balances after expenses, across time.
Leading cybersecurity companies today use the same principle to optimise how efficiently cloud using organisations can counteract ransomware and malware threats from bad actors operating from multiple sources and endpoints.
Overall, the main aim of these apps is to squirrel away as much of your money as possible, without it becoming unaffordable, so accurate data helps this process. Open banking keeps you up-to-speed with the pace of modern life.