Welcome to NerdWallet’s Smart Money podcast, where we answer your real-world money questions. 

This week’s episode starts with a discussion about who is hurt the most by the Federal Reserve’s rate hikes.  

Then we pivot to this week’s money question from a listener who left this voicemail: 

“My question is, what do you think is the best app or best way to get a handle on where all your money is going and also budget at the same time? Do all of that in one app or do you think you need more than one app, like You Need a Budget and something else like a Mint? Or is there an app that does both things efficiently for you? Thanks.”

Check out this episode on any of these platforms:

Our take on the impact of the Fed’s rate hikes

The Federal Reserve seems poised to raise the federal funds rate for the seventh time this year as it tries to bring inflation under control. As was the case with previous rate hikes, there are winners and losers. Among those hurt the most by ballooning interest rates are prospective home buyers and car buyers. 

On the housing front, mortgage rates average around 6.5% for a 30-year fixed-rate mortgage, which may drive consumers out of the market. Those shopping for a car loan can also expect higher monthly payments. The average APR is 6.3% for a new car loan and 9.6% for a used car loan. And monthly payments as high as $1,000 are becoming increasingly common. 

Higher interest rates can also be troublesome for consumers on fixed incomes, such as retirees. They’re already dealing with reduced buying power due to inflation. And if they hope to downsize or move, high mortgage rates could derail those plans.

Our take on the best budgeting tools

Budgeting can be as simple as checking after-tax income (your pay stub is useful if you have regular income) and assessing your spending. If you want help, a variety of online tools are available for free: templates and spreadsheets, calculators and personal finance websites like NerdWallet. 

Budgeting apps can supplement other budgeting tools or replace them completely by helping you track spending, save money and meet financial goals.

Popular apps include Mint, which is free and allows users to sync many types of accounts, automatically categorize expenses and set spending alerts. You Need a Budget, or YNAB, is more goals-focused and charges a fee. It uses the zero-based budgeting method, where every dollar is allocated for a specific purpose. And Personal Capital has some standard budgeting capabilities, but its primary function is to help users track balances in their retirement accounts and investment portfolio. 

Of course, there’s no rule against using multiple personal finance apps. But having too many can be hard to keep up with, and expensive if the apps carry a fee.  

Our tips

  • Start with the basics. Look at your bank and credit card statements to know how much you have coming in and how much you spend each month. 
  • Try out different options. When you’re new to budgeting, play around with using a spreadsheet, different apps or even a pen and paper to find the system that works best for you. 
  • Know why you’re budgeting. Getting a grip on your finances is a good starting point. From there, set short-, medium- and long-term goals and use your budget to meet them.

Have a money question? Text or call us at 901-730-6373. Or you can email us at podcast@nerdwallet.com. To hear previous episodes, go to the podcast homepage.