Financial Wellness for the Masses: Getting Personal Financial Management Right

Personal financial management tools can make a significant impact for the average consumer, and financial providers who get PFM right will win, serve, and retain consumers for the long-term.

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Do a quick search for “hate budgeting” and you’ll find nearly 7 million results. Consumers point to a myriad of reasons why budgets aren’t for them — they hate spreadsheets. They’re not good at math. They don’t like the emotional stress or guilt that comes with missing a budget number. They think budgets are too rigid. They don’t have time. 

The reality is that only a relatively small portion of consumers actually like taking a hands-on approach to managing their finances. According to Fintech Takes Author Alex Johnson, “roughly 15% of the population (including most people working in tech) love to do detailed budget categorization and analysis. These are the same folks who love trying out the latest note taking and productivity apps. They are also usually very proficient in Excel….

The problem is crossing the chasm and getting to the other 85%. That's the majority of the market. They want help improving their finances and making better decisions with their money, but they don't have the interest and/or available cognitive capacity to do the work necessary to make these personal financial management (PFM) apps really sing. They're busy! They want automation. They want nudges. They want to end up in a better place without necessarily remembering exactly how they got there.”

So how do we create a PFM tool that appeals to the super users AND helps the majority become financially stronger? Let’s break it down. 

Four PFM Imperatives

Recognize Anxiety is the Norm

Managing money is messy. It’s stressful. It’s personal. It’s emotional. Money is consistently rated a top source of stress for consumers — with no signs of that changing. CNBC’s Financial Confidence Survey shows 70% of Americans admit to being stressed about their personal finances and a majority (52%) of U.S. adults said their financial stress has increased since before the COVID-19 pandemic began in March 2020. 

Some PFM tools fail to take this anxiety into account, delivering data that the consumer doesn’t know how to act on or pushing alerts and notifications in an impersonal or incessant way that can make people feel annoyed, exhausted, or just worse. Sometimes, it causes them to simply shut down or turn off the constant anxiety drip. In fact, the Wall Street Journal shared that the youngest generation of adult consumers’ preferred method of facing mounting debt is to ignore it. Psychologists call this “financial avoidance” and has led to an increase of 29% year-over-year for average credit card debt among Millennials and an increase of 40% for Gen Z, according to the article. 

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. Changing behaviors is hard and without actionable guidance, consumers often don’t even know where to start. 

In addition to reassurance and positive reinforcement, financial providers shouldn’t assume that consumers know what to do — and that they’ll actually do it. It’s not just about reporting account balances but influencing behaviors. 

Get Good at the Basics

Consumers are looking for help staying on top of their finances. And, it’s the basics they want to understand. MX’s most recent survey of 1,000+ U.S. consumers found that when asked what question is most important for them to be able to answer when managing their finances, the top questions to answer are: 

  • How much can I put towards debt or savings? 22%
  • Am I spending more than I should? 21%
  • How can I cut expenses? 17%

This shows an important distinction between “nice to have'' features that enhance the money experience and “must have” insights that can create lasting engagement and loyalty. 

Further, it’s about making sure consumers know what they need to know, when they need to know and act on it. MX research shows 79% of respondents expect their financial provider to proactively alert them to issues related to their finances (such as upcoming payments due, low account balances, etc.). In addition, 70% of consumers expect their financial services providers to give them personalized notifications and insights

Focus on Utility, Not Novelty

Our research already confirms that consumers want help answering basic questions about their finances. But what about the user experience itself? Again, reliable functionality should trump flashy features to deliver a truly great money experience. Billy Gast, senior product director at MX, recently shared that there is a difference between novelty and utility, and the engagement curve for each is drastically different. He illustrates this with a great example: 

“I always look back to when Alexa came out and everyone was rushing to add an app to Alexa. You could connect your bank account and get the balance, you could ask for a readout of your current business metrics, ask how your portfolio was performing, or even play a version of Skyrim… Where are we now? The largest use case is "set a timer", followed by "play a song" and "read the news." 

After all the hype, Alexa is now primarily a hands-free timer and music player. For those functions, it was a utility that performed well. The other novel functions may have been cool or compelling but didn’t consistently perform well. And when that happens, consumers will rarely re-engage because it lacks reliable utility.

The point is to avoid getting trapped by shiny innovations that cannot reliably perform well yet and that, ultimately, disappoint more than they delight. Instead of focusing on novel ideas, focus on consistently delivering value around the core jobs to be done in the best way possible. This goes back to those core questions consumers want help answering: How am I tracking? Do I have enough cash to pay my bills? How much money can I put toward debt or savings? How and where can I cut expenses? 

Minimize the Effort 

In the same way that we should simplify the experience to focus on core mainstream jobs, we also need to make the experience as easy as possible for them to understand and manage their finances. Here’s a few ways to do this: 

When consumers come to a site or app, they want data that’s insightful and understandable — with the least amount of effort required on their part. If an institution is presenting them with uncleansed data, it makes things more difficult and consumers will likely not truly engage with the digital solution. Transaction data should be cleansed and classified into simple, understandable descriptions, making it easy for consumers to identify, organize, and act on their financial data.

  • Make it Obvious. Consumers have less patience than ever for sub-par experiences and overly complicated processes. Minimizing the steps — or searching — required to find information or take action is essential to driving high adoption and engagement. For instance, customer abandonment rates can exceed 50% if the digital account opening process takes more than three to five minutes. While this isn’t specific to PFM, the same rules apply. The longer it takes for customers to find what they need, the more likely they are to abandon the experience. Institutions with the highest adoption rates place the most sought-after information and common actions in multiple prominent locations within the digital user experience. 

This also means focusing on embedded experiences versus separate PFM tools. By placing insights and opportunities in the flow-of-life tasks or habits that consumers have already adopted, financial providers can drive higher engagement.

  • Make it Predictable and Repeatable. We’ve all heard the adage and read the statistics that people need to see something 3 to 5 times before they remember it. Repetition builds memory. Repetition builds understanding. Repetition builds habits. By delivering insights in a predictable and repeatable manner — and if the content is obviously and reliably valuable and actionable — PFM solutions can create lasting engagement and healthier financial habits. If the insights don’t do this, consumers will get in the habit of ignoring instead of engaging.


Personal financial management tools and insights have the potential to become a significant differentiator for the average consumer. Our research shows more than half of consumers agree they want their financial provider to help them better manage their finances (57%) and believe financial providers have a responsibility to teach them to be financially strong (54%). 

But, one-third of consumers agree they feel financial providers don’t do enough to support their financial needs. According to a recent conversation with Jennifer White, senior director of banking and payments intelligence at J.D. Power, from The Financial Brand, “consumers of all ages have gaps in understanding key aspects of their personal finances.” She continues, “they are seeking out more help with closing this knowledge gap.” 

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.