Pocketbook is a free App developed in Australia that people can use to understand and monitor their spending patterns.
Recently, we have outlined how Banks look at applicants’ monthly expenditure in granular detail, when assessing home loan affordability. They do this by going through your Bank and Credit Card Statements.
Banks now also load the interest rates on existing and proposed credit facilities. This is to ensure applicants will be able to service the debt in the event of future interest rate rises.
Against this background, if you are thinking of applying for a Home or Property Investment loan, Pocketbook is a terrific tool you can use to get Home Loan ready!
How does Pocket Book work?
Pocketbook works in a similar way to modern accounting packages like Xero and QuickBooks. However, it has been designed specifically for personal budgeting!
Like the accounting packages, you connect the App to your Bank Accounts and Credit Cards.
You can access the Bank feeds on your mobile device and/or desktop. Then allocate you’re spending into a wide range of predetermined categories or sub-categories.
If needed, you can create new categories.
The Analysis Functionality is Powerful
At any time, you can click on the Analysis Tab to see how much you have spent in each category (Last 7 days, 14 days, 30 days, last 3 months etc)
Although Pocketbook is free, to activate the Analysis Functionality you either:
- Need to pay $9.00
- Or send an email to someone inviting them to use the product
Confession – In the digital age when we pay so much by subscription, or tapping cards, it can be scary when you see how much you spend in different categories every week!
Pocketbook is a powerful tool to help you get your spending back under control.
Pocketbook makes it easy to get started
Once you have linked your Bank Accounts, (which only takes a couple of minutes), Pocketbook will automatically place your expenditure into categories based on the Bank feed information.
You can then go through and change categories where needed.
You can do this either on your mobile device or desktop. (However, we found for categorisation the desktop version was faster).
Future transactions from that same provider will automatically allocated to that particular category! Simple!
For items, which haven’t had a category allocated, you will be asked to create a category.
Never miss a bill – Know when they are due
One of the great features of Pocketbook is that it allows you to “Create a Bill” for reoccurring expenditure.
The App then forecasts what reoccurring expenditure you will have coming up next week and month!
This means you can ensure funds are always in the different accounts when needed. No embarrassing returned payments!
If you miss a scheduled payment, you will receive an email notification from Pocketbook!
Set a budget and avoid over spending
Another great feature of Pocketbook is that you can create a Budget:
- Enter your weekly/ monthly income
- Set an overall spending limit to ensure you save
- Create limits for certain categories of expenditure
- Establish a budget period (weekly/monthly etc.)
Once you have set the Budget – when you login to Pocketbook, you will see what the Budget is and how much you have spent to date!
What about security?
Pocketbook use the same level of encryption as Banks to help keep your financial information secure.
They also use CloudFare, to help protect the App from viruses and other cyber risks.
That said, like any web based application, it is important to do your own research and be satisfied as to the level of risk involved.
How to use the data to support your Home Loan application
One of the major challenges many people face is setting a monthly budget in their Home Loan application which will stand up when bankers compare it to Bank and Credit Card Statements.
Pocketbook makes this process easy as it is using exactly the same information!
To make it easy, you can download your Expenditure for whatever period you desire as a CSV file – or take a screen of the Analyse section of the website.
Summary
Whilst there are many Apps available to assist with budgeting, I like Pocketbook simply because it works logically and is so easy to use.
In an environment where the details of expenditure are heavily scrutinised, Pocketbook is a powerful tool to help get your finances under control!
If you would like to learn more about planning for a Home Loan or Property Investment Loan, and what is involved, don’t hesitate to give me a call.
