Review of: Penny App
Reviewed by: Christine C. Renee
Last modified: December 13, 2017
The app is a messaging-like service that enables you to aggregate, summarize, analyze and track all of your expenses on one platform. It can also help get you started with investing. The downside is that the free version of the app is pretty limited. However, it's easy to use and is a great way to view all of your accounts and transactions in one place.
Penny is a unique app that operates like a financial assistant. She tracks your money and provides insight into your spending habits. She can remind you of upcoming bills, alert you to transactions and help you find ways to save and invest your money. She’s basically your very own finance butler.
What Is Penny?
“Born” in May 2015, Penny was co-founded by her minions (her words, not mine), Mitchell Lee and Alex Quach, who wanted to help users “spend smarter, save more, and live happier.” Today, Penny is managed by a small group of minions operating under the name Friendly Finances based in San Francisco, CA.
The mobile app was custom made and designed to operate like a chatbot, with which your responses are pre-formatted. You pick your reply from a list of options instead of typing in your own words. While this limits your interaction with Penny, it keeps the conversation focused on your money.
Penny is perfect for people who don’t like to use budgets. Conversely, if you’re a budget master, don’t be too quick to dismiss this app, because she can show you spending trends and month-to-month comparisons that most budgeting apps can’t.
Penny App Features
|Access||iOS App, Android App|
|Credit Score Monitoring|
|Import QFX, QIF Files|
- Help With Beginning to Invest — Throughout the course of your Penny conversations, the app will ask questions and examine your financial situation to suggest that you start investing through an online platform. Depending on your comfort level and the amount of money you have to begin with — along with a few other factors — the app will recommend that you start with Wealthfront or Acorns.
- Site Security — Penny uses bank-grade security in the app. But it’s also important to remember Penny functions only in an advisory capacity — you are the one who is always in control of your money. In addition, Penny does not store your bank login information, so it can never be compromised. Also, Penny does not sell personal data to third parties.
- Analyze Spending Habits — Penny’s algorithm analyzes purchases and reveals spending trends by category, merchant and/or daily average. She can also give you month-to-month comparisons, along with tips on how to save money in the upcoming month.
- End-of-Month Projections — Once Penny gets an idea of your spending habits, she can start giving you end-of-month projections so you can plan next month. For example, if you spent $3,000 last month, she will tell you that spending less than $100 a day will bring your spending down from the previous month.
- Where You Spend Your Money — The free version of Penny will break down your spending into five categories (food, transportation, bills, other purchases and income) and show trends in each. The Penny+ version allows you to track even more categories and subcategories.
- Set Spending Goals — The free version of Penny lets you work on one goal at a time (and she picks when you start that goal). You can choose from a pre-selected set of money goals, the most popular one being food spending. Just tell Penny how much less you want to spend on food in the next 30 days, and she will track your spending and update you throughout the month.
- Monitoring Transactions — As soon as your bank posts a transaction, Penny will alert you (you can choose to turn off this notification). I like this feature because I can see all my credit card and banking transactions in one place instead of logging into the individual apps. And Penny is excellent at identifying where your transactions came from. (She actually does a better job of this than my regular bank.) She has a long list of charges that she can automatically identify for you.
- Fun Facts and Trivia — Penny is not a stuffy chatbot; she’s designed to be friendly and fun to chat with. It’s hard not to smile at her money trivia and cheerful greetings whenever you open the app.
Earlier this year, Penny’s minions started offering a pro version that gives you more flexibility and features:
- More Categories — Penny+ allows you to track more categories and subcategories.
- Set Multiple Goals — You’ll be able to set multiple goals for Penny to track.
- Custom Bill Reminders — The free version of Penny may not alert you to every upcoming bill, but the pro version allows you to set custom reminders, so you don’t miss any.
- Edit Transactions — With Penny+, you can change the names and dates of your transactions.
- Unlimited Balance Refresh — Free Penny will update you whenever a transaction posts to your bank account, but sometimes that could take a few days depending on your bank. Free Penny allows you to request refresh updates from your bank but only gives you three per month. With the Penny+ version, you can request as many refresh updates and reconnects as you’d like.
Penny+ costs just $5 per month and if you’re interested in the app, is definitely worth it.
How Does Penny Work?
Penny is a purely mobile app. She has a website where you can learn more about how she works and who her minions are, but to use her features, you’ll need to download the app to your smartphone.
Signing up takes less than five minutes, and the Penny app is available for both Android and iPhone. The app is free to download and free to use.
Once you download the app, Penny will ask you to sign up with an email address and password. You will have to confirm your email address before your account is activated.
Once your account is activated, Penny will help you link your spending accounts securely from within the app. She uses Plaid to securely connect to your accounts (more on that later).
Penny can link to more than 10,000 banks and credit card companies across the U.S., so you’re likely to find your bank and seamlessly connect it to the app.
Once you’ve linked your accounts, just let Penny learn your spending habits while she monitors your accounts. After a few days or weeks (depending on how you spend), she’ll have enough data to show you trends and offer helpful advice.
To get the most out of Penny, link her to your busiest spending accounts (checking and credit card accounts). The longer you use Penny, the better she gets at projecting monthly trends and reminding you about upcoming bills.
When I first tried Penny in early 2016, I was skeptical that she could give me better advice than the budgeting app I was using at the time. After a few months of using Penny, I was surprised (and a little embarrassed) about my spending habits (something I didn’t catch with the budgeting app I was using).
I also found it very convenient that Penny would alert me to any transactions that occurred within a 24–48 hour window (depending on the day of the week).
One time, she alerted me to an upcoming bill that I forgot about. I was able to avoid an overdraft fee by transferring money before the bill was paid by my bank. This was when I knew I liked the app.
Penny App Alternatives
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Penny Security —
Is It Safe?
Penny partners with Plaid, a financial aggregator that allows money apps to securely link to users’ bank accounts. If you already use apps Betterment, Qapital, Wealthfront, or Acorns, then you’ve used this system.
Because of this partnership, Penny and her minions never see your financial login data, nor will this data be stored on their servers. All of your bank information displayed on Penny is read-only, and no one can move money into or out of your account.
The information that Penny does use to identify you is kept secure with bank-grade encryption and security.
Should you decide to cancel your Penny account, you can do so easily inside the app. When you close your account, Penny erases all your information, so if you decide to try Penny again later, you will have to sign up all over again.
Penny does not have two-factor authentication or a PIN to access the app, it usually remains open until you manually log out. I suggest you secure your Penny app with an app-lock PIN or activate a PIN lock feature on your smartphone in case you lose it.
Overall, I find Penny to be just as safe as the other financial apps I use on my phone.
Pros and Cons
- Easy to Use — The Penny app is free to download and very simple to use.
- View Everything in One Place — It's a great way to view all of your account balances and transactions in one place.
- Purchase Alert — Penny alerts you to new purchases as soon as they post with your bank or credit card company.
- Handy Tools — Penny provides month-to-month comparisons, spending trends and advice.
- Secure Link to Banks — Penny is able to link to banks with two-factor authentication enabled.
- Email-Only Customer Service — There is no direct access to human support from within the app.
- Pre-formatted Responses — Your interaction with Penny is only through pre-formatted responses.
- Time Lag — Sometimes transactions can take a few days before Penny reports them.
- Limited Free Version — The free version allows you to manage only five categories.
As far as mobile financial apps go, Penny offers unique features such as spending analysis, daily-average breakdowns, spending/savings advice and pleasant chats. And while Personal Capital and Mint provide similar spending and month-to-month analysis, those features don’t report your daily averages, give advice or alert you to new transactions (unless you visit the app every day).
If you don’t like budgets or haven’t started one yet, Penny is perfect. She helps you manage your spending through updates and friendly conversation. You could even benefit from using Penny+.
On the other hand, if you’re already a budgeting master, free Penny could add to your money management routine by revealing insights into your spending in ways other budgeting and finance apps can’t.
Penny’s minions said they are working hard to bring new features, better synchronization and more in-depth analysis to the app in the new year. So she can only get better as time goes on.
Since this app has been going strong since 2015, it doesn’t hurt to try the free version that’s offered for both iPhone and Android smartphones.
Have you tried Penny yet? Let us know what you think in the comments!