Budgeting apps have become a popular option for those looking for a digital way to manage their money. Two popular apps are Mvelopes and YNAB. If you are deciding between the two, you may be curious which one is the best budgeting app.
Both budgeting apps have their pros and cons and provide a full-scale budget, so you can skip having to figure out a template, do math, or work with excel spreadsheets.
Take a deep dive into these budgeting apps before deciding which one is the right option for your personal finances.
How To Get Started With YNAB
Download the YNAB budgeting app on a phone or desktop. From here, setting up an account isn’t time-consuming and will take around 20 to 30 minutes.
Having the login info for all your bank accounts, credit accounts and loan balances (personal loans, car loans, etc.), savings (including automated savings), and other financial institutions will be helpful before beginning. Once allowing access to these accounts and financial transactions, the app can calculate all the income coming in and the money going out.
The primary method of YNAB’s budgeting system is the zero-based budgeting option. Zero-based budgeting is a spending plan where you must allocate every dollar you make to an expense.
Once your bank accounts, credit card accounts, and savings accounts are all set up, YNAB will provide you with categories (called targets in the app). From here, you will need to assign funds to these targets. Once done, your Ready to Assign number will be zero. This number means you have assigned your entire income and the first round of money management with this budgeting app is complete!
How the Budgeting App Mvelopes Works
Just like YNAB, you can download The Mvelopes app onto a desktop or smartphone. You will then have to provide some basic personal information, link to a bank account and other personal financial statements. This link ensures accurate income and expense information. Once set up, the app makes automated payments to each category.
Mvelopes’ budgeting method digitizes and adds more features to the envelope budgeting system. The envelope budgeting system allocates all your income into envelopes with different spending categories. For example, you may label one envelope as monthly bills, while another labeled as food and groceries.
The envelope budgeting system is like the zero-based budgeting system. In that, it requires categorizing funds into expense categories and designed specifically to make spending pre-planned. This way, you don’t have to think about where your money is going each month and prevent overspending.
Once you link all your financial accounts and financial information to your Mvelopes account, the app will get a larger picture of your income and expenses. Eventually, you will be able to see exactly how much money you have coming in and going out. They recommend creating digital envelopes based on the following categories: Account-specific money, bills, living expenses, and extras.
Advantages and Disadvantages Unique to YNAB
YNAB has a few pros and cons, and you may want to look at them before deciding on this budgeting app over Mvelopes.
A few advantages that are unique to YNAB is their proven method—new users save an average of $600 in the first two months.
Their mobile app is highly user-friendly, and they have a ton of guidance on their website. And one of their significant advantages is that it offers more than a “set up and let the app take care of it,” type mobile app. YNAB offers feedback and helps you set priorities to learn all the essential factors of managing money.
You can also share your budget with another person, add multiple accounts, access/update your budget, or create goals at any time. Lastly, you can split up your income however you like (monthly, bi-weekly, or whenever you’re paid).
A few disadvantages of this budgeting software/app are that YNAB does not offer investment tracking. And the service can be more expensive than other financial apps/tools. YNAB starting Dec. 1st, 2021, will be $11.99 as a monthly payment or $98.99 a year. In comparison, many paid budgeting apps start around $8.00 a month and range from $30.00-$80.00 a year.
Benefits and Drawbacks Unique to Mvelopes
A few benefits of Mvelopes include a visual dashboard with digital envelopes to see precisely how much money you have in each. Mvelopes offers a variety of financial courses and tools to help learn better spending habits. After you add your accounts to the app, the software can automatically import transactions from them. With certain subscriptions to this app, you can receive the help from a financial advisor and an array of debt reduction tools.
Drawbacks of Mvelopes include a time-consuming process for setting up. Navigating through the app is not as user-friendly, and many users have reported a significant learning curve.
Many of the additional features are only available when you spend more money for the premier account subscription ($9.97 a month or $99 a year) or the Plus subscription that costs a monthly fee of $19.97 or $199 if you pay annually. And so, the basic plan may not have all the helpful features such as independent financial advice.
The Bottom Line of Deciding Between Mvelopes or YNAB as Your Budgeting App
The bottom line is that budgeting is an essential tool to reach financial freedom. It can help you set financial goals, get an idea of your true expenses, save money for a rainy day or future months, and build an emergency fund. A paper budget can be time-consuming and may not work for everyone, especially if they do not have the best money habits.
Budgeting apps make sense, as everything in our world turns digital—a bank account, savings, investing, and all things finances are primarily online. Because of this switch, digital budgeting is just a streamlined process to manage and save money. And best of all, many budgeting apps are secure and safe.
Budgeting apps like YNAB and Mvelopes work with basic personal information such as your primary bank account balance, personal capital information, and monthly expenses.
Once they have that information, they make it easy to see how much you are making and spending. These budgeting apps do the hard work of automatically assigning any income to upcoming bills, living expenses, recreational costs, savings into an emergency fund, and other monthly expenses. They can also help you avoid common budgeting mistakes. And so, regardless of what type of budgeting app or combination of apps you choose, it is crucial to learn money management from either product. Overtime you can improve your personal finance habits!
You may be a little hesitant to make a monthly or annual commitment to a budgeting app that you haven’t used yet. If you are still on the fence deciding between Mvelopes or YNAB, you’ll be happy to hear that each budget app offers free trials for a month! And so, you can test both out before spending any money on them! So, decide for yourself which budget app is right for you!
As a final tip, you should be aware that these budgeting apps are not the only ones out there. Many user-friendly budgeting apps offer a free basic plan that you check out to save money on a monthly fee or subscription costs.
If you’re currently struggling to budget and not sure how to calculate all of your payments for things like online no-credit-check loans, or credit card bills, then a budgeting app is probably a good idea.