Don't Have the Time or Energy to Make a Budget? Make an App Do it For You (For Free)

The hardest part of getting started with budgeting is creating the budget and reminding yourself to stick to it. Fortunately, there are now apps that can set this up for you in 10 minutes or less. AI-driven budgeting tools can streamline the budgeting process, provide personalized insights, and help you stay on track with your financial goals. If you struggle at all with budgeting and tracking your spending, these tools can do all the heavy lifting for you and save you some time and effort.

Step 1: Assess Your Financial Situation

Gather Your Financial Data

Identify all of your relevant accounts, and get the information that you need to be able to link them to a budgeting app. Most budgeting apps will do the rest of the assessment for you!

Choose an AI Budgeting Tool

Select an AI-powered budgeting app that suits your needs. Some popular options include:

• Mint: Tracks your spending, categorizes expenses, and provides insights into your financial habits.

• You Need a Budget (YNAB): Focuses on proactive budgeting and offers personalized guidance.

• PocketGuard: Shows how much disposable income you have after accounting for bills, goals, and necessities.

• RocketMoney: Tracks your spending, categorizes expenses, and can help you set up a budget for all spending categories. (I personally prefer this one. It is free, but there is the option to pay a monthly rate if you would like to.)

Step 2: Connect Your Financial Accounts

Sync Your Accounts

Most AI budgeting tools allow you to link your bank accounts, credit cards, and investment accounts. This feature enables the app to automatically import your transactions and provide a real-time overview of your financial situation.

Security Measures

Ensure that the tool you choose uses bank-level encryption and has strong security measures in place to protect your data.

Step 3: Analyze Your Income and Expenses

Automated Categorization

AI tools automatically categorize your transactions into predefined categories (e.g., groceries, entertainment, utilities). Review these categories to ensure they accurately reflect your spending habits. You might need to manually adjust some categories initially to align with your preferences.

Insights and Trends

AI budgeting apps often provide insights into your spending trends, showing you where your money goes each month. This analysis can help you identify areas for improvement and opportunities for saving.

Step 4: Set Your Financial Goals

Define Your Goals

The app will prompt you to set specific, measurable financial goals, such as:

• Saving for a vacation

• Building an emergency fund

• Paying off credit card debt

Goal Tracking

Many AI tools allow you to set up goal tracking features that help you visualize your progress over time. This can motivate you to stay committed to your financial objectives.

Step 5: Create Your Budget

Utilize AI-Generated Recommendations

Based on your spending history and goals, many AI tools can suggest personalized budgets. These recommendations help ensure that your budget aligns with your financial situation.

Customization

Customize your budget categories to fit your lifestyle. Allocate funds based on your priorities, whether it’s saving for a trip, investing, or enjoying entertainment. I personally opted for a customized budget, but if you're not quite sure where to start with saving for a specific goal, the recommendations are great.

Step 6: Monitor and Adjust Your Budget

Real-Time Tracking

AI budgeting apps provide real-time updates on your spending and income. Monitor your transactions regularly to ensure you stay within your budget. Most of these apps have the option for a daily or weekly notification for account balances and will also let you know when you've exceeded your budget in any spending category.

Alerts and Notifications

Set up alerts for overspending in specific categories. AI tools can send notifications when you approach your budget limits, helping you make adjustments in real-time.

Step 7: Review Your Budget Regularly

Monthly Reviews

At the end of each month, review your budget using the insights provided by the app. Analyze your spending patterns and assess whether you met your financial goals. If you didn't, you don't need to beat yourself up about it. Just make a plan on how to do better with your spending next month in the areas that you can adjust your habits in.

Adjust for Future Budgets

Based on the review, adjust your budget for the upcoming month. AI tools can help you see trends over time, enabling you to make informed decisions about how to allocate your money.

Step 8: Stay Engaged with Your Finances

Financial Education

Most AI budgeting tools offer educational resources, such as articles, videos, or tips, to help you improve your financial literacy. Take advantage of these resources to enhance your understanding of personal finance. This is especially helpful if you're not sure where to start with building credit, investing or retirement planning. Another great resource if you are looking to improve your credit is the CreditKarma app (which is also free).

Conclusion

Creating a budget using AI tools can simplify the financial management process and empower you to take control of your finances. By leveraging these technologies, you can easily track your spending, set realistic goals, and adjust your budget as needed. In an age with an app for everything, there is no reason that you need to do all of the tracking and planning yourself.