Is a budgeting app worth it? Short answer: yes if you're not where you want to be financially. Let's start the PocketSmith review where I demonstrate how I use it, so you can see how it helps you be better with money. There's also a 50% off discount code at the end of the review!
PocketSmith: A smart budgeting & personal finance software
PocketSmith allows you to have a free account to start with, but I recommend upgrading to the premium version. The plan I use is only $9.95 a month (about 30 cents a day) and lets you automatically import your bank feeds.
This is helpful if you're a frequent shopper like myself.
Once the feeds are imported into PocketSmith, you can categorise your purchases and expenses. These are then displayed as a graph depending on the timeframe selected.
PocketSmith: A visual representation of where my money went this week.
I always like to compare this week compared to last week as I'm working on cutting down my spending on snacks and takeaways.
The graphs help you to visualise where your money is going.
Before using PocketSmith I had no idea how much I was actually spending on lunches, takeaways and snacks. It absolutely shocked me once I saw. So much so that I thought PocketSmith had to have it wrong, so I went and checked every transaction it had imported and categorised.
Nope, it was bang on.
Even just tracking your spending for a month or two helps you build a baseline. Once you start analysing your spending, you can start to set some goals around your finances.
Maybe you discover you're spending $2k a month on your credit card, $1k a month on food, or an insane amount on Amazon ebooks.
Whatever it is, PocketSmith gives you a place to start.
Using PocketSmith to track spending
Because PocketSmith imports feeds daily, I check it each day to categorise my purchases and expenses. You don't need to do this, it will do it automatically (on the Premium plans) but sometimes it can categorise the purchase incorrectly.
For example, when I purchased something from Farmers (a department store), PocketSmith categorised it as groceries. It will try to guess the best category based on the words used in the transaction.
You can also set rules.
Such as, 'if transaction includes the word 'farmers', categorise as 'retail therapy' (not groceries!).
Your net worth and forecast
I thought nothing of this feature at first, but the longer I've used PocketSmith, the more I can see how much my spending and saving habits have improved.
PocketSmith: A glance at my spending habits over the last couple of months. Yay for progress!
Take a look at that first little green hill.
That was as high as my bank account got at my last job. I was living pay to pay every fortnight.
Then I quit (the red areas) and had no income for a few weeks. Then I got my final pay beginning of June, followed by my first pay from the new job late-June.
But, the new job pays monthly, rather than the fortnightly cycle I was comfortable with...
You can see after my first pay, it drops pretty quickly and dramatically. Around mid-July I did some extra work (designing/scheduling social media posts for a local company) which helped tide me over until the next pay day.
From the second pay you can see a much more steady decline (this is good). I also picked up more extra work (designing websites) near the end of July, which helped with my cash flow. (It disappeared quickly because I threw it into another bank account that isn't connected with PocketSmith - the goal is to keep that one out of sight, out of mind).
And right before my next pay, you can see I still had a decent amount of cash still in the bank, so I wasn't counting down the hours til payday, because I still had plenty to keep me afloat.
It's amazing to see how you've progressed in just a couple of months time.
The big drop after the most recent pay? Read the next section to see where it went...
The scary side of tracking your spending
After a weekend away with friends to Ohakune, I estimated that I'd spend around $200 or so. I didn't feel bad about that, that seems like a reasonable figure. We were even planning to do these little getaways every 2 weeks...
However, upon my return, I opened up PocketSmith and categorised all purchases made in Ohakune.
The total? $598.26.
PocketSmith: Tracking your spending can be scary. My god. $600 in 2.5 days? I didn't even go skiing!
The scary part of tracking your spending is to see what you're actually spending your money on. It also came as a shock to see that I was spending $300 on food every week. For one person.
But as terrifying as it is - it's the perfect place to start to do things differently.
If you'd like to give PocketSmith a go, use the code '50OFFPREMIUM-F4RG' to get 50% off your first two months. (I highly recommend the $9.95 option - it's the one I use).
To use the discount coupon:
1. Go to the plans page and set up a free PocketSmith account
2. When you’ve signed in, go to Settings > Subscriptions > Enter Coupon
3. Then, go to Account Overview where you will be prompted to enter your payment details.