Best Budgeting Apps in the UK

Updated On: Jun 16, 2021
Best Budgeting Apps UK

Contents:

Best Budgeting Apps

We've compiled a list of some of the best budgeting apps in the UK. These are open banking budgeting apps that help you keep track of your spending, categorise your expenses and cancel wasteful subscriptions.


Compare some of the best budgeting apps in the UK below.


All the apps listed here are available on Android and iOS, and regulated by the Financial Conduct Authority (FCA).


Money Dashboard - Analytics; Forecasted cashflows; Reminders

Money Dashboard Logo
Cost
Free
Green Check Mark
Connect Bank Accounts

Money Dashboard is a personal finance and budgeting app that keeps track of your spending and lets you view all your accounts in one place. It connects to your accounts in minutes and manages all of your transactions in one place, which means you can track your online current accounts, savings accounts, credit cards, and crypto wallets at once. Money Dashboard also has a Spending Plan tool that encourages effective money management through forecasted cashflows. By deducting your upcoming bills from your balance at any time, you’ll know exactly how much money you have left to spend or save.

Download the Money Dashboard app for web, iOS, or Android.

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Emma - Spending tracker; Expenses categorisation; Reminders

Emma Logo
Cost
Free
Green Check Mark
Connect Bank Accounts

Emma is a money management app that automatically categorises your expenses to help set budgets, cancel wasteful subscriptions, and save you money in the long run. Emma analyses your finances in one place, giving you a clearer insight into your spending behaviour, as well as a host of tools to help you make smarter decisions with your money. With Emma, you can track your bank accounts, savings and investments, credit cards, cryptocurrencies, and pensions in one place. Emma will also sync your personal budgets to your pay period and use the ‘Emma reports’ feature to let you know if you’re on track or if you need to slow down your spending.

You can upgrade to Emma Pro for £4.99 a month (or £29.99 a year) to access more advanced features.

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Plum - Spending analysis; Expenses categorisation; Auto-saving

Plum Logo
Cost
Free
Green Check Mark
Connect Bank Accounts

Plum builds a complete picture of your finances to save you money and help you budget. The app shows you an overview of your finances and analyses your spending to help you keep track of your money. Plum also automates your deposits and investments and automatically switches your utilities. It's free to download the Plum app, set money aside using automatic deposits and Round Ups, withdraw as often as you like, and switch your bills with Plum. If you're interested in automatic investments or want to earn interest on your savings, Plum Plus or Plum Pro might be for you.

Plum Plus: £1/month (first month free)
‍Plum Pro: £2.99/month (first month free)

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Yolt - Spending analysis; Payment reminders

Yolt logo
Cost
Free
Green Check Mark
Connect Bank Accounts

Yolt allows you to connect all your bank accounts and view them together in one place. You also get access to payment reminders, personalised insights into your spending and detailed breakdowns of your outgoings.

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Monzo - Spending analysis; Expenses categorisation

Monzo logo
Cost
Free
Green Check Mark
Connect Bank Accounts

Monzo bank is not a budgeting app per se, but it has put a lot of work into building a great budgeting offering. It allows you to categorise your spending, view detailed spending reports, move money around, and open separate savings pots.

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What is a budget

A budget is a financial plan for your income and expenses over a particular period of time.


Consider the following example - suppose your monthly net income (after tax and national insurance contributions) is £2,000. You need to ensure that at the end of each month, you have spent less than £2,000 as spending more could lead to severe financial and mental health problems.


A budget helps you make a spending plan for that £2,000. A plan that ensures you never run out of money before your next payday. If you do it right, you might even have some money left over for long-term saving and investing.


How to create a budget

There are many ways to create a budget. For example, if you have your own method of estimating your income and expenses, making a plan to keep your costs below your income, paying your debt when due and saving a little for the future, you already have a budget.


At Koody, we recommend using the 50-30-20 budget rule. It's a brilliant budgeting technique that suggests spending 50% of your income on your needs, 30% on wants and 20% on savings and extra debt.


Let's continue with the £2,000 monthly net income example we used above. Using the 50-30-20 budget rule, you allocate £1,000 to your needs, £600 to your wants and £400 to your savings and extra debt. 


To make it easy for you to understand, we have included a simple budget calculator below. Use the budget calculator to quickly estimate how much of your monthly income to allocate to needs, wants and savings.


Budget Calculator 

The 50-30-20 budget rule helps you categorise your spending and make long term plans for savings and investing, but it does not work in every circumstance. There are situations where you need to be a bit flexible with the rule, and it makes perfect sense to adjust the ratios to suit your needs.


For instance, if you are struggling with debt and can barely afford to meet your monthly repayment obligations, allocating 30% of your income to wants and 20% to savings and extra debt might not work for you. 


Consider your own financial situation before deciding on what budget rule to use. 


A budgeting app that tracks, categorises, and analyses your spending could help you better understand how much to allocate to wants, needs and savings.

Most of these budgeting apps are entirely free to download and use. Additionally, many banks now offer a spending tracking and categorisation feature on current accounts free of charge.


The three main budget categories

The three main budget categories are needs, wants and savings.


Needs (50%)

These are things you cannot do without - your absolute necessities, such as:

  1. Groceries
  2. Essential clothing
  3. Mortgage payments
  4. Rent
  5. Car payments
  6. Utilities - energy, water, broadband, phone bill and TV licence
  7. Transportation
  8. Healthcare and Insurance
  9. Childcare
  10. Minimum loan payments. Anything above the minimum should go into the savings and extra debt category.

Using the 50-30-20 budget rule, allocate 50% of your income to your needs.


Wants (30%)

These are the extra things you spend money on that make life more enjoyable, such as:

  1. Dinner and drinks out
  2. New handbag
  3. Organising a party
  4. Travel
  5. Gym membership
  6. Tickets to sporting events
  7. Latest gadget
  8. Shopping


Using the 50-30-20 budget rule, allocate 30% of your income to your wants. 


Since our wants make life more enjoyable, it's important to spend money on them. But be careful not to spend too much. Allocating 30% of your net income to your wants is just about reasonable. And, depending on your personal circumstance, 30% might even be too much. 


Savings and debt (20%)

This category is all about planning for the future. There are two critical future events to plan for:

  1. Emergencies 
  2. Long-term goals, e.g., retirement, wedding or house deposit


If there's anything we've learnt from the Coronavirus pandemic, it is that emergencies happen, and it pays to be prepared. 


At Koody, we strongly recommend building an emergency fund to cater to unforeseen financial shocks like a job loss, major health issue or massive car repair.


Your emergency fund should be equal to at least three month's living expenses. This would serve as a buffer preventing you from making poor financial decisions in a time of crisis. You can start by allocating 10% of your net income to your emergency fund. Read more about building an emergency fund here.


The second category under Savings and Debt is long-term goals. We all have long-term goals. For some, it could be living comfortably in retirement. For others, it could be buying a home or getting married. Whatever your goals, without adequate planning, you might struggle to achieve them.


Allocate the remaining 10% of your net income to saving towards your long-term goals and overpaying your debts (if you think it's necessary to do so). 


Read our Investing for Beginners guide to learn more about investing and financial planning for your future.

How to stop going over your budget

  1. Set realistic goals
    Setting goals in budgeting can take several forms. For example, one goal could be to save for a house deposit. Another could be to ensure that you spend only 30% of your income on your wants. Setting clear and realistic goals makes it easier to stop going over your budget.
  2. Automate everything
    If it can be automated, automate it. Spreadsheets are lovely and might provide you with some value.

    Still, many people fail to stick to their budgets because they can be time-consuming and strenuous to create and manage. If spreadsheets work for you, that's fine. If they don't, use smart budgeting apps that connect to your bank account, so you never have to worry about manually inputting your transactions.

    Before you connect anything to your bank account, double-check that the FCA regulates the app or service. All the apps listed here are regulated and authorised by the FCA.
  3. Keep track of your progress
    If you use an automated service, it'll be easy to see if you are meeting your targets for spending on needs, wants and savings. You should be able to see that on a spreadsheet, too, if it is properly designed

Are budgeting apps safe?

Modern budgeting apps like Emma and Money Dashboard claim to use the same encryption technology as all major banks to protect your personal information. They don't store your banking credentials and can only access your data in read-only mode. This means that your account can't be breached, and the money in it can't be touched. These apps are also regulated by the FCA.


Is there an app that keeps track of your spending?

Most modern budgeting apps like Emma, Money Dashboard and Plum keep track of your spending to give you a clearer picture of your spending habits. Banks like Monzo and Starling also help you keep track of your spending.


How do I stop living paycheque to paycheque?

Here are our recommendations for the best ways to stop living paycheque to paycheque:

  1. Create a budget
  2. Reduce your spending
  3. Improve your skills
  4. Build an emergency fund
  5. Sell old items you no longer need
  6. Get a side hustle
  7. Stay away from payday loans

Why do budgets fail?

Here a few reasons why budgets fail:

  1. You set unrealistic goals
  2. Your budgeting tool is manual and time-consuming
  3. You didn't plan for ad hoc spending or emergencies
  4. You forget you have a budget
  5. Your expenses are higher than your income
  6. You are over-indebted

What is the best free budgeting app?

Here are some of the best free budgeting apps in the UK:

  1. Emma - Spending tracker; Expenses categorisation; Reminders
  2. Money Dashboard - Analytics; Forecasted cashflows; Reminders
  3. Plum - Spending analysis; Expenses categorisation; Auto-saving
  4. Yolt - Spending analysis; Payment reminders
  5. Monzo - Spending analysis; Expenses categorisation


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