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4 Personal Financial Management Imperatives

August 31, 2023|0 min read
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Consumers are increasingly looking to financial service providers for help managing their money and building financial strength. There’s no shortage of personal financial management tools and budgeting apps available, so why do most consumers not use them? 

Very few consumers actually want to take a hands-on approach to managing their finances. The majority of the market wants to improve their finances and make better decisions with their money, but don't want to do the work. They want automation, not spreadsheets. They want nudges, not analysis. 

So how do we create a PFM tool that appeals to both spreadsheet-loving super users and those who want a simpler approach? 

Personal financial management (PFM) tools designed for the majority of consumers should be built with these 4 imperatives in mind:

  1. Understand consumers are already anxious. More than half of Americans (61%) are living paycheck to paycheck and 70% of Americans are stressed about their personal finances, according to CNBC. Budgeting and PFM tools shouldn’t just be a reminder of how far behind consumers may be on their financial goals. Financial institutions should focus on balancing reminders with reassurance and support to create a better experience. 
  2. Get good at the basics. What questions do consumers actually want help answering? According to MX’s most recent research, consumers want to know how much they can put toward debt or savings (22%), if they’re spending more than they should (21%), and how to cut expenses (17%). Make sure consumers know what they need to know — when they need to know it.
  3. Utility wins the race. While novelty may be tempting, it’s often short-lived. Long-term adoption relies on how useful the technology proves to be to consumers. If it doesn’t meet consumer’s essential needs – how to save, how to pay off debt, how to cut expenses – any excitement over flashy features will eventually fade, leaving consumers still looking for help.
  4. Make it easy. Minimizing the effort from consumers also increases adoption. For instance, the more cumbersome and time consuming it is for consumers to find what they need, the more likely they are to give up and not return. PFM tools should place the most common actions and information in the most prominent locations to provide a repeatable, predictable experience for consumers to understand and manage their finances.

What’s the bottom line? Financial institutions, fintechs, and big techs need to enable lasting behavior changes with easy-to-use tools and actionable insights that work for their life. Those who get PFM right will win, serve, and retain consumers for the long-term.

Check out this blog post to understand more about what is Personal Financial Management (PFM) and why it's important. 

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How do we make PFM accessible to the masses?

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