Micro-investment app Acorns has developed an auto-budgeting feature they’ve named ‘My Finances’, which uses machine learning to track your monthly spending and keep you updated on how you’re going for the month.
It will be able to notify you if it looks like you’re going to overspend for the month, as well as categorising transactions to make it easier for you to see where your money is going on a monthly basis.
Source: Acorns Grow Australia
A cut above the rest?
Acorns Australia CEO George Lucas is excited about the ‘My Finances’ feature, saying that, compared to other budgeting apps, “something that is real-time and notifying you… is probably a better approach”.
“For most of the budgeting apps that exist now, you have to enter a budget,” he said.
“With Acorns, it actually goes back through your transactional history and will work out, based on your previous spending habits, what your spending habits are going forward.
“We can make the experience as easy as possible because part of saving is also learning about where you’re spending your money and seeing if you can pick up where you may be wasting your money to therefore help you save more.”
The budgeting feature will work as part of the pre-existing Acorns app, which allows you to invest small amounts of money in shares directly from your bank account.
Acorns will be relatively good at categorising your various transactions to begin with; however, Mr Lucas cautions that it may need some initial help.
“It will get better with time,” he said.
“If you want to improve the categorisation, you have the ability to go and re-categorise things or categorise items that it hasn’t been able to work out.”
This ability to categorise and analyse transactions means the app will be able to present the user with a report that details where their money is going, and in what proportions.
Mr Lucas thinks this will prove invaluable to people who need help tracking their spending.
“It can start giving tips to customers about ways they can adjust their spending automatically, and make them aware of how they are spending money.”
Millennials and budgeting: a partnership that needs work
Along with this new feature, Acorns Australia has released new research into millennial spending habits and how they budget.
The findings from their survey of 1,000 Australian millennials challenge the ‘spendthrift’ stigma that Gen Y are often labelled with.
- More than half of millennials (54%) choose to eat cheaply so they can have more money for other aspects of their budget, leaving them open to potential nutrition issues depending on what they’re eating.
- While 70% of our millennials claim to have a budget in place, about half (49%) actually manage to stick to it.
- Three quarters of millennials (75%) have to regularly make sacrifices to make ends meet on a monthly basis. The research doesn’t elaborate on what they’re sacrificing, but it’s a grim prospect nevertheless.
Mr Lucas says that while the ‘My Finances’ feature is a strong start, there’s more to come from the Acorns app over the next year or so.
“When we built this capability, we built it so that we were able to link natural language processors and chat machines into it…
“One day you might be able to Facebook message the app and ask it if you can go out for dinner that night and it will look at your expenses and say, ‘No, you can only go to the golden arches.’ ”