Budgeting without linking your bank

Since the European payment services directive PSD2, an app may read your account data with your permission. That doesn't happen directly: there is a licensed company in between that maintains the connection with your bank. You give permission, that company fetches your transactions, and the app you use receives them.

The advantage is real: you don't have to type anything and you don't miss a transaction. For someone who pays by card a lot and has little appetite for admin, that is a good deal.

Three things, and they rarely make the front page.

• A party you didn't choose is looking over your shoulder. The intermediary that runs the connection sees your full transaction history. It is regulated, and that is no small thing, but it is still an extra party with your data.
• Your transactions are commercially interesting. Where you do your shopping, which insurance you pay, whether you have a loan running: that is valuable information. With any app that has a bank connection, check what happens to that data, and whether it may be sold on in aggregated form.
• The connection breaks. Consents expire and have to be renewed periodically, banks change their systems, and then your overview stands still for a while. That isn't a disaster, but it is the moment most people give up on it.

It sounds like a shortcoming, and in terms of convenience it is. But it gives you something a connection can't.

With a connection, you see at the end of the month what happened. When you enter it yourself, you see it the moment it happens. That three-week difference is exactly the difference between a report and a decision. You type in €14 and watch your balance drop; that is feedback arriving at the right moment.

On top of that, a connection guesses a category and you correct it, whereas when you enter it yourself you choose straight away. After a month you have a breakdown that matches how you look at your money, instead of one an algorithm came up with for you.

Entering it yourself almost always fails the same way: it works for two weeks, then you skip a day, then three, and then it no longer adds up. What helps:

• Set up your fixed costs once. Rent, energy, insurance, subscriptions: that is the bulk of your spending and you only have to enter it once. See the guide on mapping out your fixed costs.
• Enter it on the spot. At the till, in the queue. It takes ten seconds. Saving it for the evening means saving it for never.
• Accept that it won't be accurate to the cent. Missing two euros isn't a problem. Stopping because two euros are missing is. The aim is a direction, not bookkeeping.
• Look once a week. Not every day, because then too little moves and you lose interest.

To be fair: if you have fifty transactions a week, or you run a business and your personal and business spending get mixed up, entering it yourself isn't a realistic way of working. In that case, take an app with a bank connection and read carefully what happens to your data.

Entering it yourself works for people who have a manageable number of expenses and want to understand where their money goes. That is most people, but not everyone.

Budgetto is built for that first group. There is no bank connection and there won't be one: the app never asks for your bank details and has no connection of any kind to your account. See also the comparison with YNAB and Spendee, where this difference shows most clearly.

Create free account