Why are spreadsheets used 20x more than personal finance apps?
Spreadsheets require a lot of manual entry. Why do all that work instead of an app? What are budgeting apps missing that a budgeting spreadsheet solves for you?
Spreadsheets require a lot of manual entry. Why do all that work instead of an app? What are budgeting apps missing that a budgeting spreadsheet solves for you?
I deleted my mint.com account because I wasn't comfortable sharing my bank info with an app.
Also, at least when I was using it, auditability was an issue. How do I know that it is bucketing transactions into the right category?
Customizability and control is also an issue.
If I need a quick read on recent spending, I'll just look at my monthly bank statements, maybe use a spreadsheet for some quick calculations. I used to enter all my expenses into a spreadsheet but found that my expenses were stable enough over time that I didn't need transaction-level resolution.
Spreadsheets win in the short term because they are instantly useful. You get value (and feel good about making it happen yourself) the moment you type in some numbers and do a calculation.
Tools that replace spreadsheets need to provide a quicker setup experience for a well-defined problem. That is, the person going to their spreadsheet or app needs to know the exact question they are asking. A mortgage calculator is the perfect example here. Whilst many people can rock the IPMT calcs in a spreadsheet, it's just way simpler to get the answer from an online calculator.
When it comes to more complex applications like tracking spend and income, and making predictions, personal finance apps have a world view that matches only a certain number of people. One of my frustrations when I've used these apps before is that they never account for the fact that my business income is my personal income, if I want it to be. They always freak out when I don't have a consistent salary and ask how these big lump sums jump into my account. Putting that aside, I hold earnings in different currencies and spend in different currencies for both business and personal expenses.
This is actually kinda simple in a spreadsheet, but awfully difficult to generalise in software. I'm sure other people have their own quirks to their finances that push them to spreadsheets too.
I hear you. Having income that's both not reoccurring and not a fixed amount is a huge short coming of apps.
The instant feedback is great point. I've been considering reworking my onboarding from its current flow of create account > connect bank > set income/bills. Maybe it should start with asking for the next income amount + date and rough monthly bills.
We could then show how much discretionary cash they have a day/week/month before asking if they want connect their bank to automate the process. Maybe even having various calculators pre-account-creation would give some of those quick answers before getting the added bonus of automatically importing transactions.
Dig deep into why your customers are there in the first place. Is it to relieve anxiety about real inflows/outflows, or just a quick rule of thumb to let them get back to life?
I've always been a fan of products that give me the beer first (what I want) and then make it obvious that I should keep going back for the water (what I need). Making me do a lot of work for what I need might make digging my head in the sand (ie walking away and not using the app) a little too compelling.
Thanks! I'll look to bring that value to the front more instead of gating behind an account creation.
From my little experience in the banking sector, I can single out the following points:
1)Spreadsheets are custom tailored 2)You can build your custom report in spreadsheets. For example, you need some money ratios, which are especially important for you like liquid net worth. 3)Apps can disappear, change or get acquired. Platform risk )) 4)In spreadsheets it you can write notes, any, absolutely any size, etc. 5)Also, when you write finances manually in cells you do it consciously, mindfully and it allows you to better control your finances 6) And of course - data security
The customization is a big point. Maybe being able to share and crowd source functions/charts would be a way people could have the flexibility to create and share with others new ways of looking at their finances.
The platform risk is interesting. It seems to come from apps/companies treating it like it's their data, not yours. For instance people don't feel that way with Github. You can easily take your code elsewhere but there's a lot of value-add in Github that others don't have.
On the data security point. I do wonder about that. Most people are using Google Sheets not fully offline Excel. My app uses that same Google auth, uses encryption. But it also adds a lot better security with two-factor auth, cert-pinned network encryption and double encryption of data at rest. Is perception that using Google directly is safer, or that your data might be sold or just sharing your bank login (even if it's read-only access) what feels risky to people?
In my perception, yes, sharing data with Google is more secure than with someone else, but it’s very difficult to say something about this without quality custDev interviews.
You also mentioned that Most people are using Google Sheets not fully offline Excel. This led me to hypothesis that maybe it’s not that Google sheets are better, but they’re just more familiar(habitual) as people are used to managing their finances in tables, at least I can say so about myself.
The ultimate personal finance tool is the one that bends to your needs, not the other way around. In that sense, spreadsheets are the only option. And then there is also the concept of learning a new tool, security and overall saving of your valuable time.
N.B if you launch a site that provides spreadsheet templates for personal finance even that would be an instant hit. That's how functional and popular spreadsheets are.
They’re infinitely customisable. I haven’t found a personal finance app yet that meets my needs. Regarding frequency, I like to check in a couple of times a week to see how I’m tracking towards my budget knowing that I have automated payments coming out between now and end of the month and some fixed expenses such as commuting. I currently do the maths in my head while scrolling through my calendar - there must be a better way!
That's an interesting idea. We have a balance prediction we could do make a private calendar for iOS/Google that just has a snapshot of your bank balance for that day. Is that what you're thinking?
Entering data into a spreadsheet makes me think about every transaction, apps are too automated and don't require me to think about my spending.
They also allow me to splice and dice the data as much as I need.
Spreadsheets are:
I have simply not found a budgeting app that works with all my personal and company bank accounts, tracks investments, and visualizes things the way we want.
Spreadsheets run the finances of both the world's largest companies and the simplest grandmother's monthly budget.
It sounds like you have a pretty robust system. How often do you update it? Would it be useful to have it updated more often, maybe by an AI accountant that can show tax breaks or other tricks to keep more of your money?
Big company finance has moved from spreadsheets to BI tools (like Tableau) that give them a lot of power features. Wondering if there’s a similar set of power features for personal finance.
We update daily, if not several times a day.
No, I can't imagine I would want an automated assistant, or that it would be very good. I don't mean to be a debbie downer, but it's almost impossible to automate things or use a bot when there are several LLCs, multiple vehicles, properties in more than one jurisdiction, etc.
I can only think of downsides of going to an app (and we've tried several) with no benefits. A spreadsheet is bulletproof, and takes about 5 seconds to update.
You're right. One of the big problems is that everyone has their own unique mix of features they need. If you have multiple LLCs it's more outside the normal of a personal finance and closer to small business needs.
As for the AI Accountant, maybe just start with thinking of a human accountant. Especially for non-salary people, a lot of times they don't take advantage of pre-tax money. This can easily give you an extra $600 more a month. Between commuter benefits, HSA/FSA, daycare/nannies/day camps, 401k it can add up quickly.
Even a basic question people ask all the time is "How much would this mortgage payment"? But the calculators don't go into property tax, mortgage insurance (some do), or if/how it can reduce your taxes. That wholistic picture is lost quickly but can easily be plus or minus a few thousand dollars a month.
If had your spreadsheet but with a real account to suggest optimizations for free/a few bucks a month, would it be useful?
Perhaps I could see it being very valuable to someone who isn't very in touch with their money & perhaps just has a simple W2 income, but for me it wouldn't really make sense.
Initially I used a spreadsheet to note down my monthly expenses and do some basic analysis .
The good
It felt good to enter data and some some basic calculations. It was a like a feel good factor playing around with numbers.
I had the full view of my expenses, the rows and columns in spreadheet helps us see lot more numbers before having to scroll.
It's also easy to compare month to month expenses in a single view. Row A and row But will have this last month's expenses. Row C and D will have this month's expenses.
The bad
I like to enter my expenses on the go while I'm out. Spreadsheet on mobile isn't very user friendly.
After spreadsheet I started using spendee which served my purpose well but I've stopped using it too since I've started lacking the discipline of tracking expenses.
The manual only mode seems like either people put in a lot of sunk cost and love it or they drop off because it's a hard habit to keep up. A lot of banks have really good encrypted, tokenized, read-only access to transactions. Do you think people are concerned about connecting their bank to automate the transaction entry part?
Also for seeing your monthly expenses side-by-side did you do anything differently after seeing the data? Or was it more about knowing there's a bigger plan and seeing how close you could follow the plan each month?
Personally I am not comfortable connecting my bank card to an expense management system early on. If I start using a system which I really like then I might have the confidence to link it.
I usually do some small analysis to see why there was an increased or decreased expense for a particular item for example the total expense of eating out the whole month etc.
Haven't found a personal finance app that does what I want yet.
Mint was cool, but has really gone downhill. Haven't found something that is as good as Mint was, and Mint still didn't do some of the things I wanted.
What was really great about Mint? Was there something on the mobile app or was it the website?
Convenience and familiarity would be my guess.
Seeing the full context. A table of data is greatly clarified through a table format.
I wonder if having 'as you go' visual representations of data could possibley out perform a table.
That's an interesting insight. The full screen view of all the data has a lot of value. Do you think people just use it in frequently? Are their questions you have day-to-day that you'd want to know about your budget?
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So being familiar already with a solid versatile tool is a core reason they use it. It sounds a little bit of customization/ownership might be part of it.
A lot of business/finance professionals have moved from Excel to MS Access and now everyone (who can afford it) use custom BI tools like Tableau. Now they rely on features like automatic data updates, predictive analysis and create live customizable charts.
Would you assume the evolution of spreadsheets would be more custom tools/views? Or I assume spreadsheets are only used a couple of times a month. Is there something they need answers for or access to more frequently?