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App of the month – PocketSmith

If you’ve ever watched one of the Mortgage Lab’s webinars or Facebook livestreams, you will most likely have heard us rave about this app of the month.  It’s one of our favourites – PocketSmith.com.  Their company website is here and the app is available on Apple and Android.

⭐ ⭐ ⭐ ⭐ ⭐ 5 stars

What does the PocketSmith app do?

PocketSmith does for budgeting what Xero did for accounting.  It makes categorising your expenses simple which means you know where the “holes in your bucket are”.  It also has a beautiful user experience.  No spreadsheet that eventually tell you the bad news.  This website generates your budget by categorising your spending and telling you what you have actually achieved.

Who is PocketSmith for?

In our opinion, absolutely everyone should at least sign up and complete one month’s budget with PocketSmith. Whether you are saving for a new home, looking for your next investment property or living paycheck-to-paycheck, you need to know what your expenses are.

Pocketsmith Setup
The setup process for Pocketsmith is smooth and a step-by-step process.

How much does PocketSmith cost?

There is a free option which is still very powerful. It requires you to manually upload your bank statements but you can still produce a good budget which will help most people. An upgrade to ~$10 per month means automatic importing of your bank statements which is great for continually monitoring your expenses.

And if that didn’t make it easy enough, PocketSmith emails you every week to give you an income vs expenses tally.  At this point, you will have no excuse for not looking at your budget.

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Does PocketSmith work in NZ?

One of the downsides to living in the land under the land-down-under, is that we often are excluded from things like awesome software.  Take, for example, how long it has taken for Amazon or Netflix to recognise that the dispersed and savage population of NZ are worthy of attention.

Well, with PocketSmith, most of the major New Zealand banks are included.  So the question has to be asked, how did we get so lucky that this brilliant bit of software included New Zealand?  It caters to Canada, UK, Australia as well as other global banks.  But why NZ?

Well, the answer is that this collection of beautiful code is based right here.  Well not here, for most of us.  Dunedin.  It shouldn't come as a surprise given Xero's rise to fame.

And frankly, starting an affordable budgeting app in a town represented mainly by students spending 60% of their income at the pub, is little short of genius.

Pocketsmith Dashboard preview
Pocketsmith's dashboard is clear and easy to read

Why now is so important to know where you are spending your money

Recent changes to the way you get a mortgage has meant the banks are now looking at your expenses in detail. Gone are the days of spending $300 per month on Uber Eats but promising the banks that, in the future, you will be more conservative with your money. The banks must adhere to the Responsible Lending Code and the CCCFA which puts a significant burden on them proving that you can afford your mortgage going forward.

Your past 3 month's expenses are what the banks will use as your future expenses.

The bank or mortgage adviser will need to run your expenses through some categorisation software to see how you're spending so it's important that you do too. Take 20 minutes to upload your bank statements to Pocketsmith and get an idea, before you go to the bank, where your money is going.

The best part of being one step ahead of the banks is that you can note which expenses were one-off. Maybe you purchased a $200 present for your partner - an expense that won't occur every month. Make a note of this. Or perhaps you still have a subscription to a TV streaming service that you no longer use. Cancel it and keep a copy of the cancellation email. Get ahead of the banks before they assume your expenses.

Summary:

In short, Pocketsmith is for everyone.  It doesn't matter if you're just beginning to save for a house, already own or are about to retire.  It's never too late to look at your cashflow and to date, I haven't seen a better website or application than PocketSmith.

*Note: Mortgage Lab may receive a referral payment if sign up for the subscription with PocketSmith however we encourage you to try the free (Basic) plan first to make sure Pocketsmith is right for you.

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