Have you ever found yourself standing at the register, about to make a purchase, and then suddenly have this moment where you ask yourself: “can I really spend money right now?” If you find yourself in this situation more often than not, the PocketGuard app offers an easy way to answer that question. To see what the app is all about and how it will help you spend smarter and save more, read on in my full PocketGuard review.
PocketGuard overview
PocketGuard is one of the newer personal finance apps on the market right now, and it has a clear goal – it wants to show you your full financial picture to help you make better spending decisions. It’s also very millennial-friendly.
Just like most budgeting apps, you start using PocketGuard by creating an account and then linking your checking, savings, bills, investments accounts, and loans. Once you’ve linked your accounts, PocketGuard syncs your transactions to create a budget, help you set savings goals, and show you what you have left to spend.
I think that last part is really where PocketGuard shines. I mean, that’s often what you really want to know more than anything. You want to know if it’s okay to buy that latte, a new pair of running shoes, or go out for an unplanned dinner. I’ll explain how this works farther down in my PocketGuard review, but the idea is that you know what you have leftover so you don’t end up taking money away from your savings goals or add any debt.
PocketGuard does have a web version, but it’s currently in beta mode, so I will be focusing on their mobile app (available for both Apple and Android devices) in my PocketGuard review.
Using the PocketGuard app
Linking your income
Before you can do anything with PocketGuard, you’ll need to start tagging transactions as income. The app automatically recognizes and tags some transactions as income, but if it doesn’t, it’s easy to tag them on your own. You can do this by opening the Transaction page and hitting the “recurring income” button. You can also do this through the Plan tab where you can see your income, then choosing a transaction to tag and setting the frequency.
You’ll want to make sure that any and all recurring income is tagged. These could be things like your paycheck, rental income, pension, and alimony payments. PocketGuard will post your incoming income at the first of every month.
I’d say that PocketGuard really offers more here for those who have a stable income, meaning freelancers might find it difficult to get the most out of the app.
Linking and classifying transactions
For any other transactions that come through PocketGuard, the app will automatically categorize them into certain spending categories, which PocketGuard calls “pockets.” These are things like transportation, groceries, bills, savings, etc. PocketGuard will automatically set up a budget for you based on your habits.
Budgeting with PocketGuard
Like I said, rather than calling them categories, PocketGuard uses the term “pockets.” To help you budget, you can set spending limits for each area, and you will receive notifications when you are close to overspending in each of those areas.
Savings goals
PocketGuard wants you to create better financial habits, and one of the most important ones is learning to save money. To create savings goals, you will need to link a dedicated savings account, like a money market account. PocketGuard won’t let you link a checking account to your savings goal because “checking accounts are not designed for savings and don’t pay interest.”
As you start moving money to your linked savings account, PocketGuard will show you how close you are to meeting your savings goal.
“In My Pocket”
Okay, so here’s the coolest part of PocketGuard. To take the guesswork out of knowing how much extra money you have to spend, it analyzes your income, bills, savings goals, and ongoing spending to show you what’s leftover. This amount will show up on your Overview page along with your net worth and net income.
Here’s a simple way of thinking of that amount:
Income – Bills – Savings Goal – Ongoing Spending = In My Pocket
My only concern here is that you really need to make sure you are fully utilizing the app, linking everything you can, before knowing that you can trust that number.
The cost of PocketGuard
There are two plan options, free and PocketGuard Plus, which is either $3.99 per month or $34.99 for the year. You pay for PocketGuard Plus through iTunes or Google Play. I honestly think the free version alone is great, and I’ll explain the paid option further down in my PocketGuard review.
M$M tip: If you like the old school approach of using Excel Spreadsheets, you can find my favorite spreadsheets and reader favorites here. Bonus – they’re all free!
Getting to know the PocketGuard features
One of the things I noticed as I explored the app for this PocketGuard review is that they seem very focused on a making a millennial-friendly user experience, from just the look of the app to how you can categorize your transactions with hashtags. I really like this because it means it will be easy to integrate this app into your daily life.
Hashtags
I think this is probably the most millennial-friendly function of PocketGuard, and it’s actually a pretty cool tool overall. While the app will categorize transactions into different pockets, you can take it a step farther with hashtags.
Say you want to know how much you spent on vacation. You can add something like #epicbahamastrip2019 to any transaction associated with that vacation to see what your total trip spending was.
If I wanted to see how much Cora and I were spending on each of our cars, I could use #bobbysyukon and #corasboujeemercedes to separate what we each spend on fuel, maintenance, etc.
Your accounts page
This is where you’ll get the best overview of your financial picture, and it shows where you stand in each of your linked accounts. It can show your credit card balances, your student loan balance, your savings balance, investment balance, and more. For any of these that are bills, it shows your total balance and when the next payment is due.
Insights
As new transactions are synced to PocketGuard, this page gives you the option to see your total monthly spending in an easy to read pie chart, letting you easily swipe through to see previous and upcoming months.
You can also see a list of your transactions and your hashtags.
Overview + Ads
This page gives you a broad look at your finances, from your net worth, your income, and where you’ll see what’s left in your pocket. This is also the page that lets you “find savings,” but that’s just code for ads that they say will help you save more money. These could offer legit ways to renegotiate your bills and lower your monthly payments, but remember that they are all third party companies.
Your Plan
This is another way to look at your monthly overview, giving you a simple breakdown of your income, bills, savings goal, and spending limits. If you have any spending alerts, like if you’re about to go over in an area, this is where those alerts are listed.
More things to know about using PocketGuard
Categorizing credit card transactions
One of the different things about PocketGuard compared to other personal finance apps is how it treats credit card transactions. This is important because you won’t want to categorize your credit card payments as bills – PocketGuard calls them “transfers.”
To understand this, here’s what PocketGuard has to say about credit cards:
“Every time you swipe your credit card to make a general purchase, that amount is debited from your ‘In My Pocket.’ In PocketGuard’s eyes, you have just paid for the item. In reality, your credit card company is floating you the money and you technically have not paid for it.
Therefore, the ‘payment’ to your credit card company is just a transfer. You are transferring funds from an account with a positive balance to an account with a negative balance.”
You can read more about their stance on credit card bills here.
The overall look of PocketGuard
I was really impressed with how clean the PocketGuard app looks. It’s unfussy and focused on what they’ve set out to do. I think the design keeps their target audience in mind, which I’m guessing are millennials.
PocketGuard Plus
Like I’ve already mentioned, the free version alone is great, but the paid version gives you the following options:
- Tracking cash payments and transactions
- Lets you plan cash payments for bills
- Records ATM withdrawals
- The option to add even more pockets, like fast food, public transportation, etc.
To offset the cost of the paid version, when you refer people to the app, they give you points that can be used to cover the monthly cost of PocketGuard Plus.
Investments
Unfortunately, PocketGuard doesn’t go any farther with investments than showing you what you have invested. Because there aren’t any analysis tools, I highly recommend using Personal Capital if you want more insights. It’s what I use to track my investments, see my net worth, and plan for retirement. Plus, it’s free.
You can read my full Personal Capital review here.
Customer service
PocketGuard runs its customer service through the app or via email. There isn’t the option to call and speak to anyone about issues. From what I’ve read, it sounds like most people are pretty happy with how responsive the app is to issues or questions.
The final word in my M$M PocketGuard review
PocketGuard is doing something really different from how they’re answering that basic question of “do I really have any extra money to spend?” I like this idea a lot, and I do think it might prevent overspending. But like I’ve already said, you’ll want to make sure you have everything linked to trust the amount the amount that’s shown in your pocket.
Questions for you:
Have you tried PocketGuard? Do you like it?
What’s your top budgeting app pick?
Millennial Money Man – we need these exact features implemented in a checking account. It would be a perfect all-in-one solution to budgeting. I would be in heaven!
Agreed!