Budgeting just plain sucks.
When people ask me what I use to manage my money or the latest budgeting software I’d recommend, I tell them I don’t budget.
To be honest, budgets aren’t good for you. Yes, they can work for many people, but I can’t be bothered putting my energy into one. Besides, budgets can’t keep you accountable for your actions, especially when you’re the type that really needs it. As well, budgets are too passive for my liking.
What does passive mean in the budgeting sense? For one, creating a budget is great for giving you guidelines, but it only tracks what you spent, not help you make decisions right when you’re in the middle of a buying decision. Yes, you can log into your budgeting app or bank account, but can you honestly tell me if you’re making an impulse purchase you’re really going to do that?
Enter the new app ProActive. I’m actually really excited to be doing a review on this product because it offers a level of accountability I haven’t seen in other budgeting apps.
What is ProActive Budgeting?
This is an app that works much like the cash envelope budgeting system.
If you don’t know what that is, the concept is simple: You take out the amount of cash you want to spend for the month (your budget) and put in varying amounts of money in different envelopes meant to represent certain categories. Whenever you spend money, you simply take out the amount you need. The idea here is that you don’t overspend because once the cash runs out, you’re outta luck.
Now back to ProActive. The cool thing is that they use the same principles as the cash envelope budgeting method but turned it into a digital product. All you do is download the app and the company will give you a Visa Debit card.
You then link your bank accounts and you place the money into an “envelope” before you can go and spend it. It can take a little as 15 minutes to download and set everything up.
Here’s where the accountability or “active” part comes in: Whenever you go out shopping, the app can detect when you’re about to make a purchase. You have to choose the category you’re spending on before you’re even allowed to use the card. If you don’t do that, your card will get declined.
Same goes if you don’t have enough money in a certain category. If you’re making a purchase that costs $30 for example, and you only have $29 left, Proactive will not let you purchase it. The app will not do any overdrafts for you and all transactions are in real-time, so you know how much you have left at all times.
The cool thing is also that you can also categorize savings in this app. The category is literally locked so you cannot take money out until it’s approved. That means if you and your partner are both using the card, both you and your partner have approved it.
You can even get extra cards so you and your partner (or child) are in sync with the budget.
Speaking With the Founder
I was a bit skeptical of the whole idea, so I decided to speak with the founder before I got on board with talking about this product. I can honestly say that Ryan is a really nice guy and genuinely wants to help people.
In fact, the whole point of creating this app was to help his existing clients (he’s also a financial planner). He and I talked for quite a bit about how budgeting stresses people out and it would be great to find a way for people to be more conscious about their spending choices. And if you’re a long time reader at High Fiving Dollars, you know I’m all about that.
So the focus isn’t just to budget, but ultimately help you stop emotional or impulsive spending. Like I’ve said time and time again (and Ryan agrees with me on this one), simply taking a minute to assess a purchase before you make it is key to making better decisions. I know if I did that sooner than later, I would have stopped many of my spending triggers and probably not gotten into debt.
Here’s a video demonstrating the app as well as showing you hypothetical situations on how someone would use it:
Using this app will set you back about $7 a month or $60 a year (you do get to try it free for 45 days). Actually, Ryan is so excited about just releasing a newer and shinier version that he’s giving you a super special offer (if you can’t wait, scroll to the end to see it).
How cool is that?
How Will This Work if I Want to Earn Points with My Rewards Card?
Ryan told me that the app actually recognizes purchases made with rewards cards as long as you confirm the category on the app. It then will put the money in another category and you use that amount at the end of the month to pay your card off.
What if I Don’t Want to Use the App Anymore?
I get it, you may like it one day and decide on a different system that works better for you. I’m totally the same way. If you’re on the paid plan and decide you don’t want to use it anymore, the money you’ve categorized on the app goes back into your account.
Can I Use This Card Like a Regular Credit or Debit Card?
Yes! There are literally no restrictions on where you can use this, as long as where you’re shopping accepts Visa cards. As well, you can withdraw cash at ATMs. You just need to pick the category you’re taking cash out from. Be aware though that you might be charged ATM fees.
I’m Scared the Card Won’t Work or I’ll Lose It
This was my first thought, but Ryan assured me that if your card gets lost, it literally becomes a piece of plastic at that point. No money is actually stored on the card until you authorize it, so if you don’t have the card on you, then the person who has it can’t access your funds.
I think this is a cool app and can definitely help people with changing their spending habits and savings goals. I’m a bit bummed they don’t have an Android version out yet (only on iOS at this point), but Ryan assures me they’ve got a prototype 70% done which means it’ll be out in a few months. It’s also only available to people in the US, though there are plans to expand to other places in the world.
The only other mini gripe I have is if you don’t have good data or wifi connection, you won’t be able to use the card. So I definitely recommend having a backup source (another card or cash) just in case that happens. I usually have a bit of cash on hand and two cards just in case something happens.
To be honest, anything that can help you assess a purchase before you make it is darn good in my books. It took me years to develop a good system to stop many impulse purchases and I seriously wish I had this app when I first started getting better with my money.
Ryan really believes in this product and his mission is to have as many people use it to hopefully change their financial futures. Go ahead and click here to try it out for free for 45 days. If you do purchase the product and have any questions or concerns, he’s providing a satisfaction guarantee on this app.
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