If I asked you to give me some of your money to hold onto for a short time, chances you wouldn’t let me. I’m not a bank, and you can’t trust that I’ll give you back your money when you want it. Even if I sign an agreement with you, you need to trust that I’ll operate with your best interests at heart. With that in mind, why would you trust a personal finance app to offer you what it says it’ll offer? That all depends on what you expect to get out of your personal finance app. If you’re planning to learn essential saving habits, you’ll easily manage to get them sorted out. If you’re looking to save enough for replacement income or retirement, you may be in for a shock.
They Don’t Help You Save
According to CNBC, budgeting apps don’t actually help you save. While they are great to start you off with savings, they’re no good at allowing you to scale up your savings or achieve anything long-term. Despite their lack of long-term viability, they are pretty prominent in my age group. As many as one-third of Millennials have at least one financial app on their phone. If these budgeting apps don’t help you save, what are they really doing?
The Personal Finance Hustle
People like seeing progress. Whether it’s a gym or a savings account, seeing numbers move makes people think they’re progressing. When you sign up with a personal finance app, you get some essential saving advice that you can actually use. Some force you to stash away some of your income and use that as their basis for existing on your phone. But few of them actually give you helpful money management advice. Unfortunately, you only get that by learning from those who understand the basic rules of finance. And before you start saying, “They should have taught us this in school,” it might not have made a difference as not all kids are receptive to things like financial literacy education, especially if their parents weren’t. No, we only pay attention to things like finances and savings when we start understanding the value of money.