What Is Level Money?
Level Money is a free app for Android and iOS that helps you know how much money you can spend every day based on your income and your bills/expenses.
While Level Money isn’t a traditional budgeting tool, it does operate on the principle that makes budgeting successful: spending less than you earn.
Level Money launched its app in 2013 and was eventually bought by Capital One in 2015. TechCrunch said the bank acquired Level to contribute to its mission to provide comprehensive banking solutions for its customers.
Here’s how TechCrunch described Level:
“The appeal of the app … is not only the insight it delivers but also the presentation,” the site wrote. “In a simplified, easy-to-read interface, Level Money offers data visualizations that help you better picture your current cash management situation.”
How does Level Money help you manage your money? That’s something we’ll dig into over the next few minutes. We’re going to take a look at what Level Money does, how it does it and what people are saying about it.
What Does Level Money Do?
Level Money approaches budgeting from a very basic perspective. The app calculates how much you make, earn and spend on a daily basis, including how much you want to save.
Once it crunches those numbers, it calculates how much money you’re “allowed” to spend every day in order to meet your savings goals.
It Tells You How Much You’re Allowed to Spend
You can view how much spending you have left in the app’s “Spending” tab, where it shows you three circles, each one representing the current day, week and year.
Within those circles is a dollar amount equivalent to what you’re allowed to spend for the day in order to reach your savings goal, or just to make sure you have enough money to cover your spending.
These dollar amounts take into account bills you’ve already paid and income you’ve already earned, not bills in the future or income you will earn.
This method of budgeting is similar to the envelope method of budgeting, where you have multiple envelopes with money in them.
Each envelope is a spending category and the money inside is the budgeted money for that category. Once that money is gone, then you can’t spend any more money in that category.
Level Money takes that concept and basically divides the amount of extra money you have by the number of days in the month. Each day is like its own envelope, and these digital envelopes tell you how much you can spend and alert you if you’ve overspent or underspent.
It Tells You How Much You’re Spending and Earning
Level Money also keeps track of the balances you have in your connected accounts (checking, savings and credit cards), as well as recurring expenses, income, saving and tracking.
The first four are pretty straightforward. The app sifts through your connected accounts and identifies which bills are recurring. Level Money also finds income sources in your accounts.
Identifying the money you’ve saved only works if you connect a savings account. When that account is connected, you can see how much you’re racking up on a day-to-day basis.
The final tool in the Level Money toolbox is crucial to your success with this app. While Level Money isn’t a traditional budgeting app like Mint or YNAB, it does offer a decent tool for tracking spending.
Level Money’s “Tracking” feature allows you to add categories of spending, much like you would a normal budget. However, you’ll have to tell Level Money which stores you want to be included in that category.
So, if you buy your groceries at Walmart, you’ll have to go to tracking, add “Groceries” and then add Walmart as a merchant in that category.
Then, as your Walmart purchases roll in, Level Money adds those transactions to your Groceries tracker.
As a budgeting tool and spending tracker, we think Level Money is more like Mint than YNAB because Mint automatically downloads your bank activity just like Level Money does.
However, it’s important to remember that Level Money isn’t a pure budgeting tool like Mint because you can’t set spending limits for specific categories.
How do you know how much you can spend in a certain category? In theory, you’re supposed to know your limit in that category and stick with the daily spending limit that Level Money gives you.
How Does Level Money Do What It Does?
Level Money would be pretty much useless if you didn’t give it access to your bank accounts and credit cards.
You’ll be asked to connect at least one account, which is really easy to do since Level Money offers quick access through many different banking partners. Each one of these partners is visible on their account connection page during sign up.
Links to Checking and Credit Card Accounts
I wanted to see how the app worked, so I downloaded it and went through the sign-up process. It was really easy to set up my Level Money account, and even easier to connect my Bank of America account to Level Money.
I clicked the Bank of America icon, entered my username and password and seconds later I was connected.
The nice thing about Level Money is that it accesses all accounts when it connects to your bank; you don’t’ have to set up each individual account.
For instance, I’ve got a checking account and credit card with Bank of America. Once my account was connected, Level Money tracked spending in my checking and credit card accounts.
Level Money will also ask you how much you earn each month, what your overall budget is and how much (if any) you want to save.
Once you fill out all this information, the app automatically pulls up all transactions for the current month. It also calculates how much you can spend the rest of the month in order to cover your budget and meet savings goals.
When you’re setting this up, make sure that you enter your net income and not your gross, or Level Money will think you have a lot more to spend each month than you actually do.
Pro tip: The app uses 128-bit encryption, which is the same level of security your banking apps use.
Consumer Opinions About Level Money
There are plenty of reviews about Level Money from consumers like you and me on Google and Apple’s app stores.
Google Play Reviews of Level Money
At the time of publishing, Level Money had more than 7,000 reviews in the Google Play store.
More than 5,300 of those reviews were 5 stars or 4 stars, while more than 1,400 reviews were 1 star or 2 stars.
The most recent reviews of Level Money are a split between really good and really bad. For example, one reviewer, Connor S., gave the app 4 stars:
“Does exactly what it says. Addicting to use, love to keep track of itemization. I find myself looking forward to transactions so I can see monthly totals. Would highly recommend to people on a budget. Thank you for the app!
“Update: My bank was taken off the list unfortunately, customer service is very professional, it did take a day to get back to me. Other than that, I would definitely recommend this app still.”
The mentioned of a bank account disappearing is, according to our research, something that wasn’t unique to this user. Many Level Money users, it seems, endured some bugs that took place after Level Money updated its app.
A review from a user named “Yordy” reflects some of the frustrations users were feeling:
“Update: it wants me to reconnect my account...Which I can't do because their site has been down for maintenance for days. Totally useless now. Twice now all of my bills and spending trackers have disappeared. Really question the effort to put it all in a third time.”
We wanted to find out if iPhone users were experiencing the same frustrations, so we went to iTunes to read reviews.
iTunes Reviews of Level Money
Level Money gets the Editor’s Choice award from iTunes, but we’re a bit skeptical of that recognition because the app gets an average of 2.9 stars from its users.
We read many of the same complaints we saw on Google Play. Here’s a review from “JustPlainCaity” that sums up user frustration over Level Money’s great user interface but buggy function:
“I have no idea what happened in the past several months. I used Level religiously last year but since the new year it’s been useless. None of my transactions post anymore so nothing works. I have no clue why all of a sudden there’s a week-long lag, but because of it, I can’t really use this app anymore.”
How Level Money Compares to Mint and YNAB
Level Money has brought an interesting concept to the personal finance world.
The popular apps like Mint and YNAB focus on budgeting out every category and tracking spending in each of those categories.
The main difference between the two is that Mint automatically downloads all your purchases when you make them, and, in that sense, it shares common ground with Level Money.
Where Level Money departs from these budgeting apps is that it takes a day-to-day view of what you can spend, not what you’ve already spent.
A good way to think about what Level Money does is to imagine yourself preparing to go on a six-hour hike. You put six granola bars and 72 ounces of water in your backpack.
You know the food and water are supposed to last the entire hike, but you aren’t sure how to make it last.
So, you decide the best way to make sure you’ve got enough is to eat one granola bar and drink 12 ounces of water every hour.
Level Money works the same way – it tells you how much you can spend each day to make it through the month.
While it’s not a pure budgeting app like Mint and YNAB, we think it can be really helpful in teaching you how to be disciplined on a daily basis.
The daily spending limits ration out your money so you aren’t penniless at the end of the month, whereas Mint and YNAB are more concerned about where your money is going and not how much is left.
Now, you could argue that Mint and YNAB are concerned about how much money you’ll have left because that’s what budgeting apps are for.
We’re talking about the pure user experience, though, and Level Money emphasizes how much you have left to spend through it’s clear, easy-to-understand Spending page.
Mint and YNAB, on the other hand, focus their user experience on what’s been spent in various categories.
Our Final Thoughts About Level Money
Based on our research, we think that Level Money can fill a gap left by Mint and YNAB. As we just mentioned, those apps do a good job of tracking day-to-day expenses, but that’s only one part of the budgeting big-picture.
Consumers like you and I need to know how to ration out our spending to meet our goals at the end of the month.
Good Way to Control Spending
Level Money provides a way to do that by setting a daily spending limit based on your monthly budget, income, and savings goals.
We see it as a useful and simple way to manage your spending while having a very clear goal in mind: to cut back today so you can save tomorrow, so to speak.
Daily Spending Goal Might Not Be Practical
A possible issue with Level Money’s daily spending limit is confusion over what your spending limit is for.
Based on our experience, that spending limit is for purchases outside of your normal budget – many people call this “miscellaneous spending”.
On the one hand, this makes sense because the app is taking the difference between income and bills and spreading that extra money across the entire month.
So, if you have a $1000 margin in March and you want to save $400, then Level Money will tell you that you can spend about $20 a day. If you spend that much each day, your end-of-the-month miscellaneous spending will be $600, leaving you with $400 to put in savings.
However, on the flip side of this, it would be really hard to spend only $20 a day, especially if you have an emergency pop up and you have to fork over $1,000 for a car repair. At that point, your entire margin is blown and you won’t hit your goal.
App Bugs Could Be Frustrating
Recent reviews point out some issues with the app – we can see how it could be really frustrating to use it, especially if you have trouble connecting your bank accounts.
Users also complained that the app didn’t save changes to income, which can be annoying if you’re a freelancer whose earnings are sporadic and uneven.
However, these reviews are a small slice of the experience of, according to Level Money, more than 800,000 users who’ve downloaded the app.
Good for Simpler Situations
If you’re single and don’t have a lot of variable expenses and extra spending, this app could be great for you. It will help you keep your beer/booze money under control and will rein in your weekend spending when you go out with friends.
However, if you’re a family and unforeseen expenses are commonplace, you might be better off using a budgeting app like Mint or YNAB.
More Reading on Budgeting:
Budgeting, whether you’re using an app or not, can be really tough. However, it’s our opinion that a budget is always worth the trouble.
A budget is also a great way to calibrate spending in order to save up for a vacation or big expense you know is coming.