Budgeting is much easier said than done. Whether you've jumped in and built an Excel spreadsheet with your receipts scattered across your kitchen table or you've freshly downloaded the newest budgeting app, chances are you've at least attempted to wrangle your finances. Chances are also high that you've thrown your hands up in frustration and moved on.
No need to worry, you're not alone. There are many reasons people flare out when it comes to budgeting. Perhaps it's because...
1. Too much happens between start-of-the-month planning and end-of-the-month reconciliation
Today, you're probably handling your budgeting after the spending has already occurred. Perhaps you're the spreadsheet budgeter mentioned above. Each month, you sit down, calculate your spending, adjust your spreadsheet, and see if you met the goals you set on the first of the month.
The problem here is that, even if you did, you don't know that until the cash has already left your account. Without that context, you can't adjust your habits mid-month if you see an increase, or decrease, in your spending for a given category.
Even if you are part of the 17% of folks with a dedicated budgeting app installed on their phone, the same may be true for you. You likely are sent emails updating you on spending habits or congratulatory emails at the end of the month, but, unless you frequently open the app, it may be too late to stay on top of things.
2. Budgeting apps don't actually truly helpful limit your spending
Let's say you've set a limit of $250 on clothing from a large retailer for the month. However, you walk into the store and see a wonderful new coat that you just need to have. Unless you have your budget in mind all of the time, current apps don’t remind you that you are going to exceed your budget allotment.
This can cause all sorts of issues down the line with impacts not just on your monthly spend within any given category, but also on your long-term financial prospects. Overages that occur here and there can add up to large sums of money over time.
3. Budgeting apps are just too complicated, and they aren't very smart
The average American makes 70 transactions a month. It hardly makes sense, unless you make it a personal mission, to spend your time fully understanding, categorizing, and assigning that spending. That seems like a task more suited to an app or an algorithm.
That said, if you've used a budgeting app, you are likely familiar with miscategorized spend. You stopped for gas, spent $30, but the app recognized it as a "fast food" vendor. Or, you go out for a meal and it flags your purchase as "bars and alcohol." Enough of these algorithm errors and your budgeting goes out the window.
There is an opportunity for users in identifying vendors where they spend large sums of money like large brick-and-mortar retailers, online e-commerce sites, or grocery stores. By narrowing your targeted saving areas to these vendors, a user could build a super clear picture of their spending there and realize much more effective savings, rather than piecing together spending categories with dozens of transactions.
StashUp aims to address some of these issues with our app. Join our mailing list to stay up-to-date on the status of our development.