PocketGuard Review: 5 Things To Know About the Budgeting Tool

If you’re thinking about trying out a free budgeting app, PocketGuard is one option to consider. 

In this article, I’ll take a close look at five things to know about PocketGuard before you download the app.

I set up a budget on PocketGuard, checked out the resources it offers and compared it to other online budgeting tools.

This article was updated in January 2024 and I review it every 12 months. Detailed notes on all updates can be found here.

5 Things To Know About PocketGuard

Whether you’re trying to watch your spending or meet financial goals, budgeting is a crucial step. It’s important to know how you’re spending your money each month in order to determine areas where you can save. While you can set up a budget on your own, there are tons of budgeting apps and websites that can set one up for you. PocketGuard is one to consider. 

It’s free to download the PocketGuard app and to create an account. There’s an optional subscription available for premium features that costs $12.99 per month or $74.99 per year. But the free version of the app has everything you’ll need to start watching your spending. 

When I downloaded the app again in January 2024, I did have to choose a free trial of a premium membership to get started. However, according to support, you can cancel your 7-day free trial at any time and use the free version of PocketGuard.

If you’re thinking about signing up for PocketGuard online or downloading the app, here are five things to know: 

1. What Is PocketGuard?
2. How Does PocketGuard Work?
3. How Does PocketGuard Compare?
4. How To Get the Most Out of PocketGuard
5. Final Thoughts: Pros and Cons

Below, you’ll find detailed information on PocketGuard including how to start budgeting for free and what to expect once you’ve created an account.

1. What Is PocketGuard?

PocketGuard is a personal finance app and website that launched in 2015. Its goal is to help you take control of your money, optimize your spending and grow your savings automatically. 

PocketGuard stands apart from competitors like Empower and YNAB for its helpful features for people who struggle with overspending. 

You can link your bank accounts to the app and manually enter your cash budget. PocketGuard will then automatically calculate how much spendable money you have after setting aside enough for bills, goals and necessities. From there, you can keep track of your spending through personalized reports, see all of your accounts in one place and track your bills. 

What’s great about PocketGuard is that it clearly displays how much money you have available to spend once your bills are paid. Then you can create a budget with your remaining balance. As you spend money, you’ll get alerts to keep you under budget in each category. The app also provides monthly insights on your spending, which could help you find areas for improvement. 

2. How Does PocketGuard Work?

PocketGuard works by having you link all of your checking, credit and savings accounts. According to the website, your data is secured with 256-bit SSL encryption, which is the same level of security as major banks have. The app also uses PIN code and biometrics as additional security layers, so it’s safe to link your accounts. 

Once you’ve linked your accounts, PocketGuard will automatically calculate your income and monthly bills based on recent transactions. Then you’ll be able to set up your budget, and PocketGuard can help you stick to it. 

Getting Started

To get started, visit PocketGuard’s website or download the app for iPhone or Android. When I tried out PocketGuard, I downloaded the iPhone app to create my account and set up my budget.

After you create an account, you’ll click on “Start Now” to begin. You’ll have to enter an email address and password to proceed. Then you’ll have to create a four-digit PIN to use for additional protection. You can also allow face ID and push notifications for additional convenience and alerts on upcoming bills and/or overspending. 

Once you’re signed in, you’ll be able to connect your banks and credit cards in order to get a complete picture of your finances with all of your accounts in one place. According to the app, PocketGuard supports 18,000 banks. I was able to find my banks easily and enter my login credentials to link them. 

PocketGuard will then automatically build a budget for you by dividing your income into bills that are coming up, savings goals contributions and other spending categories such as food, clothing or transportation. The remaining amount is what’s safe to spend. It’s called “In My Pocket.”

When I first saw this page, my “In My Pocket” amount was negative because of a few miscalculations on the app’s part. You’ll likely have to adjust your estimated income and upcoming bills when you first sign in to get an accurate picture of your finances. 

You can do this easily by clicking on the “Estimated Income” tab. There, you can choose from recent deposits in your account and indicate how often those payments come through. You can also add your income manually. Then you can do the same thing in the “Upcoming Bills” category: choose from recent charges or add bills manually. 

How To Set Up Your Budget

Once you have your estimated income and upcoming bills set up, you can begin creating your budget. Click on “Spending & Budgets” to start. 

Here, you can create categories to determine how you’ll spend the “In My Pocket” money. Category budgets are optional with PocketGuard, and you don’t have to assign every dollar to a category. If you want to leave some money unassigned for unexpected expenses, you can. 

PocketGuard’s free version has some default spending categories, such as “Groceries” and “Pets,” which it puts in a section called “Upcoming Bills.” You can add other recurring bills there. And you get two slots in the “Spending & Budgets” section to create your own categories for money that you might not spend every month such as “Books” or “Clothes.”

To add a category budget, click on “Spending & Budgets.” Then you can click the plus sign in the upper-right corner and choose a category to budget for. Finally, enter the amount you’d like to budget for that category and click “Save.” 

Once you create a category and budget a set amount of money, PocketGuard will deduct it from your “In My Pocket” money.

You can edit any category budget by clicking on it, clicking the three dots in the top-right corner and clicking “Edit Budget.” You can also delete a budget category the same way. 

If a budget category turns red, that means you have overspent the amount budgeted in the category and need to adjust your budget. Otherwise, the overage will be deducted from your “In My Pocket” money. If a budget category turns green, you have earned more than you spent in the category.

How To Stick to Your Budget

PocketGuard’s goal is to help you spend less than you earn. To do this, the app determines how much money you can safely spend or save after bills, budget categories and goals. This is the amount displayed as “In My Pocket” money and is what you see first each time you log in to the app or website. 

PocketGuard recommends checking your “In My Pocket” money daily or at least before you go shopping. Keeping an eye on this number after you’ve set up your PocketGuard account is really helpful to keep you from overspending.

To track your spending a little more closely, categorize your transactions and manually enter any cash transactions. PocketGuard automatically pulls transactions from your account when you link them to the app. They’re divided into various categories, but you can customize and edit categories/transactions by clicking the “Transactions” tab. 

As you spend throughout the month, be sure to check that each transaction is categorized correctly. If you do this, you’ll be able to analyze your spending effectively with the “Insights” tab. There, you’ll see a pie chart of all your transactions for the month.

You can click on each category or the “List,” “#Hashtags” or “Merchants” tabs to see more detailed breakdowns of your spending. The free version of PocketGuard allows users to see up to three months of spending history. This is a great way to determine what categories you can spend less in and motivates you to stick to the budget.

3. How Does PocketGuard Compare?

Compared to the other personal finance apps I’ve tried, I found PocketGuard to be one of the best for people who struggle with overspending. While the initial setup can take some time, the app clearly displays how much money you have available and updates in real time each time you make a transaction. 

PocketGuard is far from the only personal budgeting tool available, though. If you’ve been searching for the best budgeting tools, you’ve probably also come across Empower, YNAB, Quicken and Honeydue.

Here’s a quick highlight of the features available with each of these budgeting tools:

	Empower	YNAB	PocketGuard	Honeydue	Quicken
Best for	Investments	Budgeting	Avoiding overspending	Budgeting with a partner	Premium features
Free to use	Yes	No	Yes	Yes	No
Ad-supported	Yes	No	Yes	No	No
Track spending	Yes	Yes	Yes	Yes	Yes
Monthly budget planner	Yes	Yes	Yes	Yes	Yes
Bill payment alerts	Yes	No	Yes	Yes	Yes
Free credit score	No	No	No	No	Yes
Retirement planner	Yes	No	No	No	Yes
Investment tracking	Yes	No	No	No	Yes

As you can see, all five budgeting apps offer a variety of different features that can help you track your spending and net worth to build a practical budget. But they each specialize in different areas of your finances. 

If you’re mostly focused on watching your investments or planning for retirement, Empower may be a better budgeting tool for you. While you can link investment accounts to PocketGuard and see your net income month-to-month, you won’t find any advanced investment tracking tools on the app. 

To manage your finances with a partner, I recommend downloading Honeydue. If you’re an organized person who’s ready to commit to a strict budget, YNAB may be worth checking out.

However, if you mainly struggle with overspending and simply need a monthly budgeting tool to keep you in the black, PocketGuard could be the perfect solution. You can try it out for free with limited features. 

You can check out a more detailed comparison of these budgeting apps on our website.

4. How To Get the Most Out of PocketGuard

If you’re signing up for PocketGuard, there are a few ways that you can set yourself up for success. Here are five tips to keep in mind while using the budgeting app: 

1. Link As Many Accounts As Possible. This is the best way for PocketGuard to get the most accurate picture of your finances. You’ll have to provide your usernames and passwords for this, but PocketGuard doesn’t store your banking credentials. Instead, it uses an encrypted system to protect your data with bank-level security. 
2. Track Cash Spending From the App. If you budget with cash, you can track your transactions manually in the PocketGuard app. In the “Accounts” tab, you can add a cash account to track these transactions manually.
3. Fix Transactions That Are Not Categorized Correctly. When PocketGuard pulls your income and spending data, it automatically categorizes your transactions. Of course, the app may make a mistake. You can fix this by clicking the “Transactions” tab, selecting the transaction and editing the details. 
4. Create a Goal and Set Up Automatic Savings. In addition to bills and budget categories, the free version of PocketGuard allows you to create one savings goal and automatically set aside a designated amount each month. You can set it up to transfer the savings out of your bank account and into your PocketGuard account, or it can simply track the saved money like an additional budget category.
5. Customize Your Alerts. Whether you’re using the PocketGuard app on your phone or visiting PocketGuard’s website to track your budget, be sure to set up notifications and alerts. This is a great way to get the most out of linking all your accounts in one place.

5. Final Thoughts: Pros and Cons

Budgeting is essential if you’re serious about reaching your financial goals, and PocketGuard provides everything you need to stay within your budget. After trying out PocketGuard myself, here are the biggest benefits and drawbacks that I’ve found.

Pros:	Cons:
Easy Tracking: You can link your accounts to have your transactions automatically imported. You can also edit transactions and create a cash account to enter transactions manually. The app makes it easy to keep track of how much you have available no matter how you spend.	Limited Features: The free version of PocketGuard allows users to set one savings goal and two budget categories. The free version tracks your spending for only the most recent three months.
Automatic Savings: With the free version of PocketGuard, you can set one savings goal in addition to your budget categories. You can have your monthly savings contribution automatically deposited to a PocketGuard savings account that’s FDIC-insured. Otherwise, the app will track your savings contributions in your own bank account and deduct the total from your “In My Pocket” money each month.	Discrepancies: The amount of money you’ll see listed as available likely won’t match the amount you have in your bank accounts. That’s because this total is based on your budget and estimated income and bills as opposed to your actual available amount. For this reason, your “In My Pocket” money may be negative when you have money in your account. Also, you’ll have to check to make sure transactions are correctly categorized.
Avoid Overspending: After you set up the app, you’ll easily be able to see how much money you have left to spend. You can also set up alerts for your budget categories to let you know when you’re getting close to overspending.	Initial Setup: While the app is really simple to use once you have your income, bills and budget set up, getting to this point can take time and patience. Linking all of your accounts, recategorizing recent transactions and setting up an in-app budget that works for you can be tedious.

Compared to other budgeting tools such as Empower, YNAB, Quicken and Honeydue, PocketGuard stands out for its ability to help you avoid overspending. It can take a while to categorize all of your income and expenses, but once you do, the “In My Pocket” feature is great. If you need an app that shows you a spending amount to stay under, PocketGuard will do just that.

After I linked my accounts and set up my budget, PocketGuard wasn’t hard to use. Still, any budgeting app comes with a learning curve. If you already have a free budgeting app or a classic spreadsheet/pen and paper budget that’s working for you, there’s no real reason to switch to PocketGuard.

I use a simple spreadsheet on Google Sheets that works well for me. After trying out PocketGuard, I’m still going to stick to my spreadsheet. PocketGuard’s app wasn’t the best fit for me because I like manually keeping track of all of my transactions and having an unlimited number of budget categories. For this reason, I felt that I was getting the same benefits with my simple spreadsheet.

Still, if you need help getting your finances under control, PocketGuard can be an effective method. If your current budget isn’t working out, check it out. For more information on how to set up a budget with PocketGuard, check out The Newbie’s Guide to PocketGuard.

Do you use PocketGuard or another personal finance tool to stay on budget? Tell us about it in the Clark.com community!