Making—and sticking to—a monthly budget can be critical to your financial success. Especially when you’re just starting out, knowing how much money enters and exits your household on a regular basis is a habit you want to develop.
As with making any habit stick, it can help to have the right support. The best budget tool for you is the one you’ll actually use, whether that’s a full-featured app, a tricked-out spreadsheet or more manual means. To help in your search for the right budgeting app, Forbes Advisor Canada has ranked the best budgeting apps available in Canada for May 2024 and narrowed it down to our top three.
1
Simplii HISA
APY
0.40% – 5.50% for eligible deposits
Minimum Deposit Requirement
$0
Other Features
No maintenance or monthly fees. Set up automatic deposits. From May 1st to July 31st, 2024. Get a special interest rate – Earn 5.90% interest for 5 months on your first Simplii Financial High Interest Savings Account. Limits apply.
For the purposes of this list, Forbes Advisor focused on apps that are available to Canadian consumers. The apps shown on this list offer a variety of useful features and tools that can meet varied personal finance and money management needs.
App details are accurate as of December 1, 2023.
To create this list, Forbes Advisor analyzed 15 budgeting apps. We ranked each budgeting app on 18 data points within the categories of consumer ratings, costs associated with the app, security and encryption of consumers’ data, desktop availability and the ability to share the app with someone else.
The following is the weighting assigned to each category:
Budgeting apps with a higher overall rating relative to their number of reviews ranked higher on our list, as did those that are completely free. We also prioritized mobile apps with advanced security features, like biometric authentication, multifactor authentication and encryption. Apps that allow the ability to connect an unlimited number of accounts moved toward the top of our list, as did apps that also have a website version and allow for sharing with family or friends.
To learn more about our rating and review methodology and editorial process, check out our guide on How Forbes Advisor Reviews Banks.
Having no financial plan or budget in place can cause stress and overwhelm you, leading to increased spending, living beyond one’s means and perpetuating destructive cycles. But having a solid budget in place as part of your overall money mindfulness can make a huge difference—not only by helping you achieve your financial goals but also by reducing stress and anxiety and improving your overall quality of life.
Creating and managing a successful monthly budget is all about knowing how much money you bring in and how you actually spend it. Your income should be greater than your expenses, and you should have enough wiggle room to set money aside each month for savings and retirement. If your balance isn’t where you want it to be, it’s time to create a budget plan.
Build in breathing room. Rounding up your expenses to the nearest dollar or five dollars can provide a comfortable pad, so one math mistake doesn’t result in an overdraft fee. Another way to do this is to set a false bottom threshold in your account—instead of considering $0 the bottom of your checking account, consider $200 the bottom. This approach can serve as a safety net in a worst-case scenario.
To get started on a budget plan, list your income and expenses. Connecting your bank accounts to your favorite budgeting app is the easiest way to do this, but you can also do it manually with a pen and paper or spreadsheet program.
Next, separate your fixed expenses from your variable expenses. Fixed expenses are those that don’t change from month to month, such as housing, utilities, insurance, child care and loan payments, including automobiles, student loans or credit card payments. Variable expenses include groceries, entertainment, dining out, vacations and streaming services. Finally, consider factoring in monthly contributions to savings goals like retirement or an emergency fund.
If your expenses exceed your income, look at your variable expenses first to see where you might trim the budget. After that, you can consider ways to cut back on fixed expenses, such as moving to a neighborhood with lower rent or refinancing your debt.
Budgeting for groceries can be tricky—everyone needs to eat. If you’re unsure how much to budget for groceries, compare your spending to the USDA’s food plan. Keep in mind that special dietary restrictions may push your grocery bill higher.
If you want to cut back on your grocery bill, meal planning can help. Create a weekly plan to make recipes that share ingredients or use pantry staples. Meat is a significant expense, so adopting a meatless Monday meal can also help lower grocery costs. Buying in bulk rather than single-use packaging can also save you some cash.
A vacation can be an exciting savings goal if you have some breathing room in your budget. The first step to budgeting for a vacation is to decide how much you want to spend and when you want to go. If you’re eyeing a $5,000 beach vacation one year from now, you can break that up into a monthly savings goal of around $420.
Not sure you want to commit to an expensive trip? Consider lower-cost options like a road trip, or keep your eyes peeled for a good deal. Budgeting for a vacation means you’ll have the funds ready when airfares drop or that aspirational ski lodge becomes available for booking.
To determine how much you should spend on rent, use the 28/36 rule. This budgeting principle says that you should spend no more than 28% of your total pre-tax income on housing or 36% of your total income on debt in general—which can include housing and a car payment or student loans. Using this rule, if you make $3,400 per month, you can afford up to $952 in rent and $1,224 in total monthly debt payments.
Sharing an apartment or house can help reduce your housing budget, as can moving to a cheaper area. If finding more affordable accommodations isn’t an option, you might have to look to other areas of your budget to cut costs.
Aside from buying a house or car, a wedding is one of the largest expenses most people will pay for in their lives, often costing tens of thousands of dollars.
If you’re saving for a wedding, first determine who might be willing to contribute. Family members may offer to pay for one aspect of a wedding or contribute a set amount of money to use for whatever you and your future spouse see fit. Then, determine how much you and your partner can contribute.
Once you have a baseline budget, decide how you’ll allocate your funds. List typical wedding expenses and determine what’s most important to you. Some essential line items include:
Focus your spending on the elements you cherish most. If you need help breaking down costs, check out apps focused on wedding planning.
Budgeting is a process that begins with identifying your financial goals, along with observing your spending and savings habits. When you truly understand how much money is going out and coming in, you’re better prepared to handle both the expected and unexpected financial challenges life brings.
The mindset you bring to managing your money is important. Establishing a budget is a critical first step to gaining control over your finances. If you’ve never worked with a personal budget, it may take a few cycles for your habits to catch up. And, if you have money habits you need to improve, the right app can help.
A budgeting app is an app designed to help you optimize the spending and savings choices you make each month. By putting all your financial commitments and goals in one place, a budgeting app can give you better visibility into your financial choices and habits.
Similar to the apps you may use from your bank or credit union, a budgeting app may provide additional functionality such as financial goal setting and cash flow tracking across multiple financial accounts. Budgeting apps can sync with your bank and credit card accounts to provide a holistic view of your finances.
Some budgeting apps will use a specific budgeting approach—like envelope or zero-based budgeting—while others will address budgeting more generally, allowing for customization based on your needs. A fully featured budgeting app can help you track spending, manage recurring bill payments, set savings goals and manage monthly cash flow.
Budgeting apps are a great tool to help ensure you’re living your budget, not just planning one. They can provide insights into your spending habits, identifying where your money goes and where you can make improvements.
As with any app, whether or not it “works” depends largely on how you use it. A challenge with budgeting generally—whether managed with an app, a spreadsheet, or more manual means—is committing not only to having a budget but to making your financial decisions in line with it. Many people find that the interactivity and automation provided by a budgeting app help keep them motivated to stay on top of their personal finances.
Picking a budgeting app can seem like a small decision when compared to other personal finance choices. But the right budgeting app can make a big difference in your personal financial life.
When selecting a budgeting app, be sure to consider what your needs and goals are first. The right budgeting app can provide you with helpful insights and data into your expenses and savings. But before that happens, identifying your financial goals can help you refine your search for the right budgeting app for you.
Outside of your goals, here are a few features to consider before you commit to a budgeting app:
When searching for the perfect budgeting app, consider your personality first. Do you like to see how the sausage is made, or do you want to set it and forget it? Apps like YNAB help you understand where every dollar is going, while apps like Oportun help you automate budgeting so you rarely have to think about it.
Budgeting apps aren’t the only way to manage your money and track your spending. Here are some alternatives to budgeting apps to consider.
While mobile apps are convenient for day-to-day budgeting, you might prefer software for a more robust money management experience. Software programs like QuickBooks or Quicken offer expanded capabilities beyond budgeting, like tax software integration and payment management. However, these added features often come at a higher price tag than mobile apps, so consider what you can afford to spend.
Spreadsheet budgets are highly customizable, making this method ideal for anyone who needs something more hands-on than budgeting apps. With a spreadsheet, you can record your income, keep track of your expenses and see where your money goes each week or month. Excel and Google Sheets are popular choices.
The 50/30/20 budgeting method lends itself well to budgeting with a spreadsheet because you can divide expenses, discretionary spending and savings into categories within the sheet and allocate individual expenditures to each category. To get started, use our 50/30/20 budget calculator.
For some, building a detailed budget might not be necessary or might feel too advanced. When this is true, just tracking your spending could be a good place to start. You can do this by looking through your bank or credit card statements periodically or using an app. Expense tracking apps give you a snapshot of your spending by category. While you can use them to budget, you can also just use it to sync your different bank accounts and see your activity more clearly.
If a mobile app isn’t your style, you might prefer manual budgeting. Budgeting without the help of technology is a good way to hold yourself accountable for your spending. Envelope budgeting or cash stuffing is a tried-and-true system for visualizing your budget that can be done manually.
When you get paid, you’ll distribute portions of your paycheck into envelopes. Each envelope will be designated for a specific category, such as rent, food or gas. With this system, you give every penny of your paycheck a purpose and cannot spend beyond what’s in your envelopes.
1
Simplii HISA
APY
0.40% – 5.50% for eligible deposits
Minimum Deposit Requirement
$0
Other Features
No maintenance or monthly fees. Set up automatic deposits. From May 1st to July 31st, 2024. Get a special interest rate – Earn 5.90% interest for 5 months on your first Simplii Financial High Interest Savings Account. Limits apply.
The best budgeting app is the one that best suits your personal finances. Each of the apps recommended above has features to help you avoid common budgeting mistakes and that can apply to a variety of money-managing styles and financial goals. Some banks and credit unions also offer budgeting and tracking tools within their own apps.
There are several excellent free budgeting apps to choose from here that may meet your needs. However, the best free budgeting app for you is the one that will best serve your personal financial goals. To find the right app for you, don’t hesitate to download a few and test them out for yourself.
While many budgeting apps claim to have user-friendly interfaces, each person has different likes and preferences. It is difficult to say which budgeting app is easiest to use, but all of these highly ranked budgeting apps are designed to provide a positive user experience.
If you don’t want to give your bank account information to a budgeting app, YNAB allows for file-based import of transactions as well as manual and automatic tracking. Goodbudget doesn’t connect to your bank account either—instead it requires you to record each transaction manually.
Yes, especially when you understand what your financial goals are and use the right budget app to reach them. According to anecdotal reports, some budgeting apps have helped users save thousands of dollars in the first year alone. They can also help consumers make more mindful purchases.
