Broker Check

Choosing the Best Budgeting Software

| November 24, 2017

The toughest question that we get as planners is, “How do I budget?” The reason for its difficulty lies in several facets. First, everyone is different, and the most productive way for one person may be a fruitless exercise for another. Thus, the individual must be prepared to potentially try several different forms of budgeting.

Second, for most Americans, they have not been taught even the most elementary budgeting basics (more on this in a minute). More advanced budgeting is a very meticulous and time consuming exercise, and planners simply cannot teach all of the skills of budgeting within the scope of comprehensive financial planning – this actually requires the help of someone whose entire practice is devoted to financial budget coaching (and if a planner tells you otherwise, your skepticism should rise). This is definitely one of my issues with our education system – we teach our children a variety of subjects, but not basic financial literacy.

Third, because it is a meticulous and time consuming exercise, the client may start the process and then simply abandon it after a few months. This bears out in the numbers. In a 2014 Gallup poll, 55% of Americans were found to follow a “strict budget.” That sounds good, right? That’s more than half the US! But the devil is in the details – in the Gallup poll from the year earlier (2013), less than 1/3 of Americans (32%) prepare a monthly written budget. Also, of those who do in fact prepare a written budget, only 30% compare what they actually spent against what they had budgeted, or just under 10%.

This is not to say that the only proper way to prepare a monthly budget is to write it down and do a month by month reconciliation. In fact, both of us would be in the 90% above. But we also do not believe that you can simply run the numbers in your head periodically and feel confident that you are doing yourself right. This is actually where the wonderful world of technology comes into play. In this article, we are going to explain how a few different types of budgeting software can help you manage your monthly expenses (including the three best options in our opinion, (YNAB, Mint and LearnVest), along with the costs of each product (if any). We should note, we are not tied to any of these products; we just want to give you our opinion on the best software available.


YNAB, or “You Need a Budget,” is a budgeting software which earmarks dollars for expenses before they are incurred. Thus, YNAB starts with your income and asks you to give every dollar a job. Every dollar should be assigned to either a spending category or savings. In the first few days, you invest a lot of time thinking through what categories you'll need, though a few dozen are provided to help you get started. They also have a category of “Stuff I Forgot to Budget For,” which acts as a buffer.

The entire goal of this software is to get you to balance your budget in real time, and provides a very granular way for you to see where you are overspending. Since the app makes you plan your budget in advance, it forces you to think about where you are spending money before you actually spend it, and thus you can work towards a particular goal in mind. This can potentially change your behavior in real time, instead of most types of budgeting software on the market (which we will get to), which tend to look backward.

This type of forward-looking software does have a cost – time. Since you need to meticulously plan for your future expenses and categorize each expense in real time, utilizing this app can be a tedious undertaking. Also, there is a $5 per month cost of utilizing the app, a cost that you will not have with several other free budgeting software you can find online. However, if you can take the time to utilize the app, YNAB may be a fantastic option for those that truly embrace the ideals of future planning.


Mint represents the juggernaut in the personal finance industry and provides a stark contrast to YNAB. Our clients may be very familiar with how Mint’s budgeting features work, since our eWorth Client Portal’s budgeting feature is quite similar to Mint’s. You first connect all of your accounts/credit cards/mortgage (if you have one). Similar to our software, Mint does not have the access to make transactions from your accounts – they only have the ability to view previous transactions. Once you connect your bank accounts/credit cards, it will try to categorize all of your expenditures based on the names of the vendors on your statement (for instance, if you made a purchase of ITunes, it may be automatically categorized under Entertainment – Music). Mint is approximately 70-80% accurate, so you may have to re-categorize certain expenses. You may see the main philosophical difference between Mint and YNAB, which is either:

a) you make a complete budget based on how much money you expect to earn and how much you think you will need, in YNAB, or

b) you set spending limits on yourself based on your past history of spending, regardless of where the rest of your money goes, in Mint.

Mint’s main benefit is its simplicity and ease of use – it is not nearly as time consuming as YNAB. In fact, one of the best aspects of Mint is that within moments of setting up an account, it already sees habits and trends in your spending since it's pulling several months' worth of data from the past to analyze. In other words, you get insight into your financial health right away. Once you have done the initial re-categorization, the software takes up very little of your time (aside from analyzing its output, of course). You can input budgeted amounts for each category, and each month (or whichever timeframe you desire), Mint will provide you with spending trends based on your history, and you can see where you are overspending for each category. Mint even provides you with a quarterly credit score (which you can see on your Mint dashboard) – you can see not only details on your current credit score but also what you can do to improve it.

The only potential downside of a software such as Mint’s (or our own eWorth Client Portal) is that it is completely backward looking; this type of budgeting software does not help you plan on a going forward basis, or help you reflect on your expenses in real time. If this is important to you, YNAB may be a better option (or software to utilize in conjunction with ours or Mint’s). However, those who are time crunched may find the ease of use and simplicity conducive to their fast paced lives (also, the fact that it’s free doesn’t hurt).


While Mint and YNAB are two of the biggest players in the personal software business, there are a few others. One in particular that is worth mentioning is a company called LearnVest, a personal finance company that is very similar to Mint.

Similar to Mint, you can connect your bank accounts/credit cards, and LearnVest will track your expenses against a budget. Mint is significantly more polished overall and has more features, but the one thing we really liked about this software is its debt management tool. For instance, if you have a credit card with a high balance, LearnVest will pull the balance of the debt along with the interest rate. You can then input the minimum payment, and LearnVest will tell you how long it will take to pay off the debt. You can then utilize the slider to increase the payment, which will then update the remaining term. There is also a feature to compare investing in the market vs. paying down debt, so you can compare which makes better sense based on parameters you input.

LearnVest is free, but they will try to sell you on their financial planners, but aside from some minor soft selling, there is enough here to make it worth considering.

There are a ton of minor players in the industry, but these we feel are the top three we would recommend overall. If you have any questions about any of these, please feel free to reach out to either of us.

Karen DeRose and Anthony DeRose are registered representatives of Lincoln Financial Advisors.

Securities and advisory services offered through Lincoln Financial Advisors Corp., a broker/dealer (Member SIPC) and registered investment advisor. Insurance offered through Lincoln affiliates and other fine companies. DeRose Financial Planning Group is not an affiliate of Lincoln Financial Advisors.