The Best Budgeting Apps (UK)
Updated: Sep 27, 2024
Contents:
- The Best Budgeting Apps in the UK
- What Is a Budget?
- How to Create a Budget
- The Three Main Budget Categories
- Top Budgeting Methods
- FAQs
The Best Budgeting Apps in the UK
The best budgeting apps in the UK are Budget by Koody, PocketSmith and Plum. Budget by Koody offers manual budgeting without the need to connect to your bank accounts, PocketSmith offers bank connections with detailed reporting and future projections, and Plum offers smart budgeting.
Beyond these three, we've rounded up most of the best budgeting apps available in the UK, designed to help you manage your money more effectively. These apps allow you to track spending, categorise expenses, organise your finances, and even spot wasteful subscriptions. You can choose between manual budgeting apps, where you input your own data, or Open Banking apps, which link directly to your bank accounts to automatically display transactions.
Open Banking apps, regulated by the Financial Conduct Authority (FCA), provide a real-time view of all your financial activities in one place, while manual apps give you full control over inputting and categorising your expenses. Whether you're single, part of a couple, or a student, these apps are suitable for a wide range of users and are available on both Android and iOS platforms. Some even have a web or desktop interface for those who prefer to budget on a bigger screen.
Here are the best budgeting apps in the UK:
1. Budget by Koody - Manual budgeting, no bank connection required
Free to £1/month
iOS and Android
Budget by Koody is a simple, manual budgeting app that doesn't require linking
your bank account, so your money stays safe. With it, you can track spending, set budgets, and monitor
multiple accounts (including savings, investments, and pensions) without sharing sensitive data. It is
perfect for those who prefer a hands-on approach to managing finances. While the basic version is free,
the Pro version, with extra features, costs £1/month or £10/year.
2. PocketSmith - Detailed reporting and future projections
£9.99 to £26.66/month (billed annually)
Desktop, iOS, and Android
PocketSmith is a powerful personal finance software that lets you connect
multiple accounts, including multi-currency ones, and track cash manually. It offers detailed insights
into your spending habits and helps you forecast your finances, showing you what your money might look
like in the future. Whether you're planning for the next few months or the next 10 years, PocketSmith
helps you make informed financial decisions. Plans range from free to £39.95/month, depending on your
needs.
3. Plum - Smart budgeting and automated savings
Free to £9.99/month
iOS and Android
Plum makes budgeting and saving easy by automatically analysing your spending
and setting money aside. It connects all your accounts, tracks your spending, and even helps you find
better deals on household bills. If you opt for the paid Money Maximiser feature, Plum moves your idle
money into a savings account that earns interest, adjusting it based on your spending habits. Basic
features are free, but more advanced options range from £2.99 to £9.99/month.
4. Moneyhub - Comprehensive financial insights and payday budgeting
Free to £1.49/month
Desktop, iOS, and Android
Moneyhub brings all your financial information into one place, from current and
savings accounts to crypto and pensions. You can set budgets, track spending, and even get insights into
your income and investments. It's great for keeping an eye on all your finances, whether you're tracking
your payday budget or reviewing your pension plans. Moneyhub offers a six-month free trial, after which
it costs £1.49/month or £14.99/year.
5. Emma - Spending tracker and net worth calculator
Free to £14.99/month
iOS and Android
Emma helps you manage your finances by automatically categorising expenses,
tracking subscriptions, and showing you a clear picture of your net worth. You can link all your
accounts, including investments and pensions, and see everything in one place. Emma is free for basic
features, but for extras like cashback, bank transfers, and more detailed budgeting tools, you'll need
to subscribe to one of their paid plans, starting from £4.99/month.
6. Monzo - Full banking service with budgeting features
Free to £15/month
iOS and Android
Monzo is a UK bank that also offers a handy budgeting app. With Monzo, you can
track spending, save money in "Pots" (a type of digital envelope budgeting), split bills with friends,
and even round up your spare change. It also offers payday budgeting tools and lets you pay bills
directly from your Pots. Monzo's basic features are free, but for more advanced budgeting tools and
other perks like interest-bearing accounts, you can upgrade to Monzo Plus (£5/month) or Monzo Premium
(£15/month).
7. Monese - Spending analysis and savings pots
Free to £14.95/month
Desktop, iOS, and Android
Monese offers a budgeting app that helps you set budgets, track spending, and save money through "pots." While the basic app is free and includes a GBP, EUR, and RON account, Monese also offers more advanced features like insurance and bill protection through its paid plans (£5.95 or £14.95/month). You can also open savings accounts that earn interest with Monese's partner banks, giving you even more control over your financial planning.
What Is a Budget?
A budget is essentially a financial plan that helps you manage your income and expenses over a period of time, usually monthly. Think of it as a roadmap for your money. Just like you wouldn't go on a long journey without a map (or a GPS!), having a budget keeps you on track with your financial goals and helps ensure you're not spending more than you're bringing in.
Creating a budget means looking at how much money you have coming in (your income) and where it's going (your expenses). This process makes it easy to spot areas where you might be overspending or places where you could save a bit more. With this knowledge, you can make adjustments that bring you closer to achieving important financial milestones—whether that's paying off debt, saving for a house deposit, or building up an emergency fund for life's surprises.
For example, let's say you take home £2,000 a month after taxes, National Insurance, and other statutory payments. You'll want to make sure that your total spending doesn't go above that amount. Spending more than you earn can lead to financial stress and problems that affect not only your wallet but also your mental health. A good budget helps you plan your spending so you don't run out of money before your next payday. And if you stick to it, you might even have some left over for savings or investing in your future.
How to Create a Budget
There are many ways to create a budget, and it is important to find what works best for you. If you already keep track of your earnings and spending, you're already on your way to having a budget. However, if you're new to budgeting, it might help to follow a simple rule or guideline.
At ISACalculator.com, we suggest using the 50/30/20 rule as a starting point. This method divides your monthly income into three categories:
50% goes toward your needs (rent, groceries, utilities, and other essentials).
30% is for wants (dining out, entertainment, shopping—things that make life fun but aren't strictly necessary).
20% is allocated to savings and debt repayment (this is where you build your future by saving for goals and paying off debts).
To make this clearer, let's continue with the example of earning £2,000 a month. Under the 50/30/20 rule, you'd put £1,000 towards your essential needs, £600 towards your wants, and £400 into savings or paying off debt. This balanced approach ensures that you're living within your means while still enjoying life and preparing for the future. Have a play with our 50/30/20 budget calculator to see your income categorised based on the 50/3020 rule. Our calculator lets you compare your monthly and annual 50/30/20 budget breakdowns.
The Three Main Budget Categories
When building a budget, it is helpful to break your spending into three main categories:
Needs (50%)
Needs are the essentials—things you can't live without. These include:
- Groceries
- Rent or mortgage payments
- Utilities (electricity, water, broadband, phone bills)
- Transport costs
- Healthcare
- Insurance
- Minimum debt repayments (anything extra goes into the "savings and debt" category)
Allocating 50% of your income to these necessities helps ensure you're covering the basics without stretching yourself too thin.
Wants (30%)
Wants are the extras that make life more enjoyable but aren't strictly necessary. These could be:
- Going out to eat or ordering takeaways
- Gym memberships
- Travel and holidays
- Shopping for non-essential items like party clothes, gadgets, or entertainment
It is important to spend money on things that bring joy, but setting a 30% limit helps keep things in check. Depending on your situation, you may find that 30% is too high, and that's fine—this is a flexible framework.
Savings and Debt (20%)
This is the category that prepares you for the future. It covers:
- Building an emergency fund
- Saving for long-term goals like retirement, buying a home, or even big expenses like weddings
- Paying down debt faster than the minimum payments require
Life is unpredictable, and emergencies happen, so having an emergency fund that covers at least three months of living expenses is crucial. Start small by allocating 10% of your income to this fund until it grows. The remaining 10% can go toward paying off debts or saving for specific goals.
Top Budgeting Methods
While the 50/30/20 rule is a great starting point, it's not the only way to manage your money. Different people find success with different methods:
- Zero-Based Budgeting: This method involves allocating every pound of your income to a specific category, leaving nothing unaccounted for by the end of the month. It is great for people who like a detailed, structured plan, but it can take time and discipline to maintain.
- Envelope System: Popular in a more cash-based world, this method involves setting aside money for specific categories (e.g., rent, groceries, entertainment) in physical envelopes. Once an envelope is empty, you can't spend more in that category until next month. Today, many digital banking apps allow you to replicate this method virtually.
- Pay Yourself First: With this approach, you prioritise savings by setting aside a specific amount as soon as you get paid before covering other expenses. It's a great way to ensure your savings grow, but it requires a bit of flexibility to handle unexpected costs.
- Value-Based Budgeting: This method helps align your spending with what truly matters to you. It is less about rigid categories and more about making sure your money supports your personal values, whether that's travel, education, or investing in hobbies.
The key to successful budgeting is finding the method that best suits your lifestyle and financial goals. There's no "one-size-fits-all" solution.
Frequently Asked Questions
- Are budgeting apps safe to use in the UK?
- What are the best free budgeting apps in the UK?
- How does Open Banking work with budgeting apps?
- How should a beginner start saving money with a budgeting app?
- What is the best budgeting app for couples or families in the UK?
- Why do some budgets fail?
- How can I avoid going over budget?
- Which budgeting app is best for tracking investments in the UK?
- Can budgeting apps help with debt management?
- Which budgeting apps are best for saving on bills in the UK?
1. Are budgeting apps safe to use in the UK?
Yes, most budgeting apps in the UK, especially those using Open Banking technology, are highly secure. They typically employ bank-level encryption, and many are regulated by the Financial Conduct Authority (FCA), ensuring your personal and financial data is protected. Additionally, these apps usually operate in "read-only" mode, meaning they can view but not move or change your money.
2. What are the best free budgeting apps in the UK?
Some of the top free budgeting apps in the UK include Budget by Koody, Plum, and Monzo. Each app offers various features, such as spending tracking, budget creation, and even investment options, depending on the plan. Budget by Koody is praised for its manual budgeting feature, while Plum excels in automatic saving, and Monzo is known for its seamless budget categorisation and bill-splitting features.
3. How does Open Banking work with budgeting apps?
Open Banking allows you to link your bank accounts to budgeting apps, giving them access to your financial data to provide an overview of your spending and financial habits. Apps like Plum and Moneyhub use Open Banking to pull transaction data from your bank and help you manage your finances in one place.
4. How should a beginner start saving money with a budgeting app?
To start saving money, use a budgeting app that tracks your spending and suggests where you can cut back. Set clear financial goals, create savings categories, and automate your savings using a standing order or direct debit. Alternatively, you can use an app like Plum, which can automatically move money into a savings pot based on your spending patterns.
5. What is the best budgeting app for couples or families in the UK?
Budget by Koody is an excellent option for couples and families who prefer manual control over their budgeting without linking their bank accounts. It allows users to manually input transactions, categorise expenses, and track multiple accounts like savings and pensions. This feature can be particularly useful for managing shared household expenses. Additionally, its flexibility in creating custom categories makes it easy for families to organise their spending according to their unique needs. By setting up budgets for groceries, bills, or other expenses, families can keep on top of their finances without needing to share sensitive banking data.
6. Why do some budgets fail?
Budgets can fail for several reasons, including setting unrealistic goals, not accounting for unexpected expenses, and choosing a budgeting tool that's too complicated or time-consuming. It's important to set manageable financial goals, track both regular and ad-hoc expenses, and use a user-friendly app that works for your lifestyle.
7. How can I avoid going over budget?
To avoid going over budget, start by setting realistic and achievable goals, such as saving 10% of your income and gradually increasing it. Many banks allow you to separate your funds into different accounts or "pots" for specific expenses, which makes tracking easier. Automating your savings on payday ensures you're putting money aside without effort. It is also important to tackle high-interest debts first, freeing up more money to save. Building an emergency fund for unexpected expenses can prevent financial setbacks, and tracking your progress with a budgeting app helps you stay accountable to your financial plan.
8. Which budgeting app is best for tracking investments in the UK?
Emma and Plum are great for users interested in tracking investments. Emma allows you to connect various investment accounts, including cryptocurrency and pensions, while Plum offers options for investing in stocks and ISAs through its premium features.
9. Can budgeting apps help with debt management?
Yes, many budgeting apps offer features that help manage and track debt. PocketSmith and Budget by Koody are particularly helpful for this. They allow you to set goals for paying down debt and track your progress over time.
10. Which budgeting apps are best for saving on bills in the UK?
Apps like Plum and Monzo offer tools to help reduce household bills. Plum, for instance, can analyse your current bills and suggest cheaper alternatives, helping you switch to better deals and save money on utilities.