How are Finance Management Apps Different from Banks & Credit Unions?

By Courtney Dodson

When people need help managing their money, investments, or credit score, there are several places they can turn.  Many banks and credit unions offer tools to help with money management, including mobile apps that offer ATM locators, mobile transfers and deposits, and more. Financial technology (also known as “FinTech”) offers a variety of mobile apps as well, with cutting-edge features that can analyze your spending across multiple platforms and automatically transfer money to your savings.

In January 2021, only 39% of Americans surveyed by Bankrate said they could cover an unexpected $1,000 expense with their savings. People turn to money management tools in an effort to improve their financial security and to build a personal emergency fund. When unexpected costs occur—like a medical bill, flat tire, or emergency trip to the vet—you’ll be better equipped if you’re familiar with your finances. 

Digital options for money management

When searching for a money management app to help organize your finances, you’ll find a wide variety of options. Some of the most commonly used apps include the following: 

MoneyLion 

One popular platform that helps users manage their money, track their credit score, and even take out personal loans is MoneyLion—a banking and money management app that offers a free basic membership or an option to pay monthly for added features. It also offers a points and rewards program with an easy-to-use dashboard that keeps your financial information in one place. 

Dave

Dave is a mobile banking and management app that can give you an interest-free advance of up to $100 from your upcoming paycheck. It features user-friendly budgeting tools and spending alerts, helping users save an average of up to $500 a year. Plus, for every percent of a tip you leave in the app, Dave helps the planet by planting a tree. This platform charges a minimal monthly subscription fee. 

Chime

One of the prime features offered by Chime is the ability to receive your paycheck up to two days early through direct deposit. This mobile banking app also promises no hidden fees, overdraft fees, monthly charges, or minimum balance requirements. It can help you manage your money with transaction notifications, daily balance alerts, and more. 

Mint

A well-known budgeting app and website, Mint can help you easily access investment accounts while also providing detailed budgeting tools. The app pulls transactions from all of your bank accounts and credit cards into one place, giving you a clear picture of your finances. It also reminds you when upcoming bills are due and allows you to pay bills within the app. Mint is free to use, and it also gives you a free, annual credit report.

Acorns

Acorns approaches savings differently, collecting your digital “loose change” to help you save. The app rounds your purchases up to the nearest dollar amount, automatically transferring the difference into a portfolio selected by you. (If you make a purchase of $10.25, then $0.75 is transferred to the portfolio.) This can help establish retirement or investment accounts with minimal effort in increments you won’t notice missing. The app has different membership tiers that cost $1, $3, or $5 per month, and it’s free for college students.

Benefits and disadvantages

Most finance management apps are straightforward and easy to use, making them a practical way to keep tabs on your spending and start building up savings. Keeping your budget on your phone means having access to it everywhere you go—so as long as you remember to check it, your finances should be easily manageable. 

However, a money management app will only work if you do. If you don’t regularly use the platform, your money won’t manage itself. As with any type of budget, it needs to be regularly updated to provide you with an accurate picture of your finances. Another potential concern with money management apps is a security breach. While most apps use high-level encryption to protect your information, there is always a level of risk involved with storing sensitive information. Since FinTech apps integrate with your bank and other lenders, security is a factor to consider. 

You may find that using a mixture of tools from your bank, credit union, and a finance management app is the most beneficial way to look after your money. The best budget is the one you’ll actually use, so it’s important to find a method that makes you feel comfortable and confident. 

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