These are the things you should look for in an expense tracking app

Tracking expenses is a crucial step towards financial independence. Find out how to choose the expense tracking app that suits you best.

As we outlined in a previous post, it's paramount that you're as disciplined as possible and track every – EVERY – income and expense item in your life. No excuses. This method will help you:

- Gain an overview of where you're spending money and where you could save

- Reflect on your consumption decisions more carefully at the point-of-sale

- Uncover hidden truths in your spending behaviour

- Categorise what matters to you and what doesn't

Instead of using spreadsheets or notes, many people – including us – refer to smartphone apps to consistently track daily expenses and income streams. In fact, there are countless apps out there these days that crave for your attention. Unfortunately, not all of them are worth your while. But how to separate the good from the bad?

Generally speaking, there are five aspects to evaluate an expense tracking app:

1) User-friendliness. Remember that you will be tracking many transactions every day – maybe up to 20-30 expenses. Hence, the easiness with which the app can be used is key. You don't wanna lose valuable time, but quickly input your cashflow streams.

2) Number of categories. Just tracking income and expense streams is useless unless you make sense of the data and categorise the cashflows into brackets. Popular categories include «health», «restaurants», «groceries», «utilities» and «travel». Choose an app that has a wide variety of such categorisation brackets, ideally with the option to create your own categories.

3) Multi-currency functionality. The world is getting ever more globalised, and so does our lifestyle. We might be working in the US for some time, then live in Denmark for a few years before eventually settling down in Singapore. Consequently, a good expense tracking app comes with an integrated currency converter that updates whenever your smartphone is online. You should be able to input individual income streams and expenses in various currencies, without having to change your base currency all the time. Trust us – this is an important point. It will save you a ton of headache on your next travel or study/work-abroad assignment.

4) Powerful visuals and export option. Nothing beats a good chart depicting where you spend your money and where it comes from. You should also check that you can export your data to text or excel files, so that you can import your expense tracking history to other applications.

5) Cost. This aspect often gets forgotten. After all, we are using expense trackers to optimise our spending and reduce expenses. Choose an app that is free or only costs a small one-time premium fee; avoid apps that only really work with a premium subscription plan that will set you back a few dollars every month.

With these five considerations in mind, you will be able to choose the right expense tracking app much more effectively. In this post, we tell you which trackers we personally use for our daily transactions.

Last but not least: Don't forget to transfer your daily recorded expenses to our tool at the end of every month. This will help you gain insights on where you stand in your FIRE journey, and how your income streams, expenses, and assets develop over time.