My first job after college was supporting a piece of personal finance software that helped track your spending. The job was to listen to people all day on the phone, understand their problems with the software and with their finances and solve their problems. The key issue that stood out to me was that people frequently ran out of money before the end of the month, myself included. I was living with my parents and paying them rent, had a broken engine mount on my 89’ VW GTI that needed fixing, but my credit cards were almost maxed out and I had no savings.
To get a handle on finances, I started tracking every transaction – back when you would have to enter them all manually — cash transactions, paychecks, both gross and all deductions. $33.86, what I spent at the Village Cheese House in 1993 (salami and swiss old fashioned on dutch crunch), $909.52 at Safeway in 1997, $800.47 at TJ Maxx in 2002, $978.52 on DirecTV in 2004. I have accounted for almost every penny I’ve spent since 1992, categories, memos and notes, sometimes funny, sad or angry.
For me, tracking my spending is how I have controlled my spending, saved money, knew how much house I could afford, and maximized my deductions. I have never been a budgeting person, spending is too erratic. I still haven’t met the person who spends the same amount of money on clothing each month. Cash flow, and spending within your means, having money at the end of the month is what really matters, not as much where you spent it, but what you didn’t spend.
I would compare this to diet and exercise; both finance and dieting are similar problems. You have daily decisions where the impact of those decisions isn’t felt for months or years. There are many schools of thought on how best to lose weight, but everyone can agree that if you consume fewer calories than you burn, the weight will come off. If you spend less than you make, you will save money.
With smartphones and connected devices we’ve seen a huge influx of apps that let you track your activity, or calories, even smart glasses that tell you what you are drinking and how many calories. With the Apple Watch I am excited to introduce what I feel will be the personal finance version of the activity tracker.
Tracking Your Spending
With this new feature for iPhone and Apple Watch, we are addressing the #1 feature request of Personal Capital users – tracking spending.
The team’s approach was to keep it simple, but still make it powerful. You can now set a spending target based on your average monthly spending. If you set the goal on the new Spending feature on our iPhone app it will tell you how much you could save over the course of a year vs. your current average spending.
On the Apple Watch, the default view will be for a Month of spending. We show you your current spending, your goal for the month, and the progress bar shows you where you are vs. today’s date.
If your spending is a little hot for the month the progress bar might be ahead of the current date, if you are on track for spending then you will be at or behind the current day. If you overspend then the progress bar turns red to show you’ve spent past your target for the month.
Saving Made Simple
As long as you finish the month having spent under your goal you are saving money. If you want a more granular view then you can swipe to see a weekly view of your spending vs. goal, or again to see year to date. Swipe up to see the daily detail of your spending to understand where things may have taken a turn for the worse. The beginning of the month with rent and mortgages can cause your spending to jump out in front but take until the middle of the month to focus on pulling it back in, then finish strong at the end of the month. Like dieting occasionally you slip up and binge, but know that you got a little out of hand and reel it back in.
On the iPhone the new spending feature is very similar to the Apple Watch, but it also adds in the detail of your spending. The outer ring has the same functionality of showing you your spending vs. target and the inner ring shows you the impact each spending category is having on your total spending.
Easily see where you need to cut back to reach your spending goal. In the example above you’ll see that Entertainment, Taxes and Hobbies were the culprit.
The user feedback has been great so far with suggestions on how to exclude reimbursable expenses, different monthly goals per month, and other feedback. We will continue to develop this feature as we move it to our iPad, Android and Web applications.