The Best Australian Budget App to Track, Spend and Summarise the Aussie Way

Most budgeting tools make you choose. Either you plan ahead and guess what you are going to spend, or you look back at your spending and try to work out where it all went. Rarely do you get both, and almost never do they talk to each other.

Then, when you do finally find an app that does both, it will probably drown you in too much detail and complexity, with transactions, categories and numbers all over the place, leaving you more confused than you started.

So when you are managing a household budget looking for the perfect app, the question isn't do I budget, or do I do a spending review?

You need both. You also need it to be simple, with a high level summary giving you an instant picture, backed up by the details on demand when you need to dive into them. Oh, and all automated would be nice too, after all, life's too busy to waste on maintaining budgets.

But first, let's look at some of the common budgeting problems you need to avoid.

A budget is a plan. It is your best guess at what you think you are going to spend. Done well, it gives you a clear picture of your income versus your expenses and tells you if you are heading in the right direction.

But a budget on its own is just a guess. Don't get me wrong, any budget is better than no budget, as just by thinking through your expenses is a great way to start.

However, there are two common problems.

The first is that while it is easy to start with a spreadsheet or an online budget tool to capture all your planned expenses, you can set up this perfect looking budget, frame it, stick it on the wall, and then ... nothing.

Creating your first budget is a starting point, and the mistake many make is not updating it to their changing circumstances. It is a living plan. Picking a tool that automatically works with you from the start, to help keep your budget up to date as life changes, give you a much better chance of keeping it realistic.

The second problem is without comparing it to what you actually spent, you have no idea if it is working.

A spending review looks at your spending history. It tells you where your money actually went, which can be a sobering experience ("I spent how much on coffee?!?!").

You go through your statements and work out where your money went. Like budgeting, there are low tech options, like getting out the coloured highlighters and printed bank statement and manually working through three months and adding it all up.

As a first pass this can be a good learning exercise, but you are unlikely to do it twice. So like budgeting, doing it once is great, but success comes from constantly reviewing as life changes.

Also, with the safety of Open Banking these days and category matching tools in budget apps like MoneyFormula, you really don't have to slog it out manually any more. Link things up, point it at your spending and make the whole review exercise a breeze.

And not just the first time to give you your initial spending review, but ongoing as new spending transactions automatically drop into the categories and you get an instant picture of your progress.

But knowing what you spent last month does not help you plan for next month. You need both pieces of the puzzle working together, the planned budget and the spending review.

Budgeting is important, it's your 'best guess' at what you think you are spending and a plan to help you move forward.

A spending review is important, it's 'based on facts', not guesses, letting you discover your spending habits.

You get the best results by using the two together. By comparing your spending to your budget you can instantly see where you need to make changes.

If you put down in your budget, $5 a week on coffee, and you are spending $50, go back and update your budget, which will also force you to find the money somewhere to keep it all balanced.

This is a really important step. It is not about having a nice looking budget, it is about having a realistic one you can work with, flaws and all.

So, put together your budget, do a spending review, compare the two and make sure your budget and spending is realistic. Keep updating things until they balance.

Before we dive into the easiest way of tracking spending habits against budgets, a quick word of warning. It is easy to get lost in the details, with parent spending categories, child spending categories, budget line items, transactions, spending frequencies, etc, etc so it is really important to have a summary view with the key facts.

The details do have their place, especially if you are trying to get to the bottom of money mysteriously vanishing (like the high number of transactions against the essential spending categories "red wine fund" and "chocolate fund").

But make sure you have a summary and can see the overall plan, how you are tracking, and recent spending so you can quickly see if you are going off track. If expenses are going up, are they still covered by your available income, with a small safety buffer, or will you be overallocating and need to adjust the budget and cut back somewhere else?

The quicker you can get this information, the quicker you can make a couple of simple changes, instead of waiting a few months to find out you are in a financial ditch and having to work hard to get back on track.

So ultimately what you need is a budget with your planned expenses and that is easy to maintain as life changes. You need the tools to review your past spending to understand your spending habits, that is automated going forward so as money comes in you can see what is happening, and you need to be able to compare it to your budget, to make sure things are on track.

And on top of all that detail, you want a simple summary, so that once you have set things up, it automatically updates and gives you a clear picture of your recent spending so you can see things are on track or take action if they aren't.

Personally, I love the Australian made MoneyFormula app as it automatically does all of the above (and so much more, like mortgage and offset planning, goal tracking, debt crushing and it even gives you a complete net worth view - but more on those in other articles!), so I will refer to it below as I go into more detail on how all of the above work together and can help you level-up your finances in very simple ways.

But if you are using a different app, then no problem, all the same principles apply so read on to see how to make it all work.

Ok, that's enough of the background chit-chat. Let's dive into the solutions and see how to put this all together so you can be the boss of your household finances.

Starting with your dashboard it is really handy if you have instant access to your recent spending. For example, in MoneyFormula you can pick the last 7, 14 or 28 days (depending on how often you want to track) and along with the Open Banking feeds it will automatically drop all your spending into the categories and give you a clear high level of your total spending, and the Australian parent categories the money went into.

Being able to see the recent total spend, and where it went in a few simple numbers lets you quickly check things look ok. Do I need to change anything, or am I on track?

Your snapshot should also show you your upcoming expenses, and with MoneyFormula your dashboard shows you your current and next month budget at a glance. You can see your normal monthly repeating amounts, but it also highlights any extra bills coming up. For example, the annual car insurance due in February, will show up on the radar as February approaches. You'll see the expenses coming in advance, so no more nasty bill surprises.

From the dashboard financial snapshot you can switch to a full yearly summary of the next 12 months of expenses coming up and you can then drill straight down through your parent and child spending categories to individual transactions. Or pull up your budget and see exactly how your planned expenses compare to what actually came out of your accounts.

So from summary to detail when you need answers, forward planning and historical review, linked together and always up to date.

While the dashboard gives you the next month or two at a glance, sometimes you need the bigger picture.

MoneyFormula's Next 12 Months budget report lays out every planned expense across the full year ahead, month by month - the regular bills, the irregular ones, and everything in between. The annual car registration. The insurance renewal. The council rates. The school fees. All of it, laid out so you can see exactly what is coming and when.

Use the summary view for a quick overview of the whole year at a glance, or drill down further into any individual month to see the full breakdown of what is due. Either way, you have the complete picture of your upcoming expenses without having to hold it all in your head.

No more scrambling. No more "I forgot that was coming out this month."

Looking back across the last twelve months of spending gives you a true picture of your financial habits - not just what happened last month, but the patterns and trends that reveal where your money really goes. Review the totals, or get MoneyFormula to show your average outgoings per week, per fortnight, per month all the way up to per year.

Compare any two months side by side to spot changes. Run the cash flow report for an instant income versus expenses picture. Or export the full twelve months of spending and budget data for a deeper review or end of financial year tax planning.

Once you have your budget in place, and you are tracking your actual spending, MoneyFormula lets you compare the two, category by category. See what is on track, what has gone over, and where you need to change. Adjust your budget, adjust your spending, or a combination of both depending on what works for you.

MoneyFormula tracks across Australian parent and child spending categories, so you can stay at a high level overview or drill down into the detail whenever you need it. You can even pull up budget line items and spending transactions making up totals, and link off to the spending accounts if you need more account level information.

Summary by default, details when you need them.

No two Australian households are the same, and MoneyFormula does not try to squeeze yours into a one size fits all template.

Some households like to work at high level summary (e.g. monthly Subscriptions total), others like to track the details (e.g. Netflix, Stan, Disney, Spotify). They both work, so the most important thing is to pick the one that works for you.

MoneyFormula works at all levels and lets you set individual budget items at the frequency that suits you - weekly, fortnightly, monthly or yearly. List infrequent bills in the exact months they fall due, or spread them as a monthly average across the year.

Add individual line items within categories, like listing your streaming services separately within your subscriptions, or keep it at a summary level if that works better for you.

MoneyFormula also comes with a full set of Australian spending categories built in, so you can hit the ground running. But you can also customise them to suit your household, hide the ones that do not apply, and add your own where needed.

When you set up your budget and your planned expenses are higher than your income available, MoneyFormula will instantly notify you the budget is Overallocated, so you can go back and make adjustments to bring it back in balance.

If your budget is healthy and your income covers your expenses, MoneyFormula will show you your monthly safety buffer - the breathing room you have between what comes in and what goes out.

It also tracks your Pay Yourself First progress, so you can always see how much of your income is going towards your buckets (wealth goals, savings goals and fun spending) before your expenses take over.

Ok, we have covered a lot, but before you nip off for the coffee break (or maybe it is more of a red wine and chocolate time of day), take a look at MoneyFormula's Four Simple Steps.

You will discover everything you need to budget, quickly review your spending and help put you in charge of your finances. The summary snapshot and Open Banking will keep you in the know without lifting a finger.

Give MoneyFormula a go and see what you think!