Reducing your monthly expenses is by far the easiest way to immediately improve your financial situation and save money. If you reduce your monthly spending by R3 000, that cash is immediately on hand with minimal effort. To achieve the same financial impact through income, you would need to earn R4,000 if you’re taxed at 33% (or more if your marginal tax rate is higher).

But if you’re anything like me, you probably hate budgeting, so spending time on that isn’t really a practical option. As an accountant it’s shocking how sloppy I’ve been with budgeting over the years. I just didn’t have the desire to work on a spreadsheet and never got to it.

22 Seven

The Benefits of an Automated Budgeting App

The cool thing about having an automated view of your spending is that it causes you to naturally improve your spending habits. Before you even start strictly sticking to some sort of budget your expenses decrease because you realise how much you’re wasting on certain items each month. Before you know it you manage to reduce your debt by using the extra money to make credit card payments and the extra money can be used for savings and investing so that you become more on track with your financial goals.

The advantage of cutting costs is that it creates a habit of discipline in your life. When you’re less irresponsible with your finances your quality of life improves because more order is created in your life. It’s similar to the way that one feels after doing a bit of spring cleaning. Your motivation and energy levels start increasing and you just find that you have more capacity to spend time on beneficial things. So the habit is just as important as the financial effect.

How 22seven Works

Once you’ve signed up for 22seven, you just link your bank accounts, investments and loans. It integrates with pretty much everyone you would need it to such as all the big banks and other relevant companies such as Allan Gray, eBucks, Old Mutual, Easy Equities and the list goes on.

Once these accounts are linked, it’s pretty much up and running. 22seven then pulls the last 3 months’ transactions and going forward it automatically updates daily or every time you log in. All transactions are automatically put into categories such as groceries, transport and fuel, medical etc. It’s possible to customise this and you can also review your transactions and recategorize them for exceptions. The website / app also calculates your net worth and displays graphically to you how that changes over time.

You can then see exactly what you’ve been spending in each category over time and it shows you your average spending. You can use this to help you capture a budget which you can tweak as you go along. It’s then possible to compare your actual spending and income to your budget, so you can quickly see where things are going wrong in your spending!

There’s also a report section which shows useful data graphically such as your top 5 merchants, money in vs money out and insights into your variable spending. 22seven gives you random “nudges” based on your data which give you insights into a trend you might be following in the month that you need to watch out for or comparisons of how your spending compares to people in similar income brackets.

What I really like about this App is that you really don’t have to spend much time on it at all. Even if you don’t log in for 2 or 3 months, the data still flows, so you can just pick up where you last left off.

Security

The only catch to this App is that you need to share your banking passwords with it in order for it to integrate. Sharing that kind of information initially turned me off it, but I am a bit paranoid. For example when online banking first came around I took a while before I started using it because of security concerns. But that was ridiculous. We’re living in the 21st century, so we can’t be doing things manually when technology like this exists.

So after doing a bit of research on 22 Seven I learnt that it uses the same technology for passwords that the financial institutions use globally. There are a few articles about it like this one. And there are already 580 000 South Africans who trust 22 Seven enough to use it. But do your own research until you feel comfortable enough to become one of these users. A potential R3 000 or more per month is worth the effort.

In my opinion there isn’t a better budgeting app in South Africa. For some reason it’s 100% free, which is strange as I’d be more than willing to pay for it.

If you enjoyed this, you might also like finding out how to earn R1 000 per month using the eBucks calculator.