on software

I started making a personal finance app. Why?

This article is a translation and adaptation of my article in Russian.

Since around 2014, I've been keeping track of my finances in Google Spreadsheets. It always went like this: 2-3 times a week, I'd sit down at the computer, gather receipts, go through the transaction history in banking apps, recall expenses from memory, and record them in a spreadsheet.

The spreadsheet had one row for each day, and columns for accounts, wallets, and a couple of calculated fields. There was also a "Notes" field where I would describe in almost free form where the money went.

An example from 2016. I have converted the original prices from Russian roubles to euros for clarity.

As you can see, I didn't exactly have a lot of money. Probably because I mostly ate and drank coffee instead of working, but the point is that I didn't want to economize on these daily things at all. Saving on everyday items and cutting back is fundamentally unnatural for me, and I've always tried to avoid it. Therefore, the question "Where does the money go?" didn't concern me at that moment, but more interesting questions did:

  • How much money do I have right now?
  • How much did I have a month/six months/a year ago? Have I become richer or poorer?
  • Can I afford to spend on a vacation/buy a new phone/go to a private clinic right now? Will I go into the red by the next paycheck?
  • What should my income be so that with my current spending, I start saving any money at all?
  • How soon will I start starving if I lose my job?

When I started the spreadsheet, for the first month or two, I just recorded expenses and income, then manually calculated the average daily expenses, entered this figure into tomorrow's "Expense" stretched the spreadsheet six months ahead, threw in the "future" planned incomes - and got a forecasting tool sufficient to answer the questions I was interested in.

Over time, the spreadsheet improved a bit, but the principle remained the same. Only the average daily expenses had to be recalculated manually from time to time because they were mercilessly increasing, and the forecasts were getting spoiled.

Around the 350th row, the spreadsheet usually started to lag, I endured it for a couple of months and then started a new one. To date, there are seven of them.

It so happened that specialized apps for managing household budgets didn't catch on with me. I remember once finding a decent app that could automatically pull all bank transactions, got inspired, set everything up, and the next day I found that one transaction was missing from the list. That is, an immediate miss with the answer to the question "How much money do I have right now?" because the synchronization there happened at an unclear time, by an unclear principle, and I still had to verify it myself.

Of course, that app, like all others, could generate some reports on expenses and possibly some forecasts, but, like all "money" and banking apps, it couldn't always guess the category of expenses. So at the end of the month, you could enjoy a beautiful chart where more than half of the expenses are listed as "Other", because you pay for your apartment monthly with a regular transfer to an individual, and about 30% of expenses couldn't be recognized, since the app doesn't understand that "The Daily Basket LLC" is the local grocery store, and "EuraLink GmbH" is an electronics store where you snagged something cheap.

Of course, it didn't come without cash outlay, so you still had to do a lot of manual work when using this app. And since almost all apps (except for Tyazhelovato) have a completely disgusting expense tracking interface that is impossible to use "on the go", you still need to collect receipts and periodically update all the data at home, at the table.

Therefore, I stayed with the spreadsheet. Its interface is simple and clear, and entering data was convenient and faster.

I'll tell you in advance that I recently tested popular "money apps" again, and in terms of interface, everything is still bad there, and adding a transaction is always something akin to a clunky accounting form.

I mean, what would it take for these guys to suggest to the user a few options for his usual spending according to the amount entered? Like, you usually buy coffee for 3-4€, and you've entered this expense into the app a hundred times, but on the hundred and first time, you still have to search for "Coffee" in the categories.

It took me about two hours to add "popular tags" (grey) and "suitable tags" (green) to my prototype, and in 90% of cases, it takes about 5 seconds to record an expense!

You might ask me: "Why did you even start making some kind of app when you have such a wonderful spreadsheet?"

The problem with the spreadsheet is that it only works if you mostly live in one country, mainly use one currency, and the times are mostly peaceful. That is, in the following situations, the spreadsheet simply can't do anything:

  • if you have money in several currencies;
  • if in different countries and on different accounts these currencies have different values;
  • if you spend a significant amount of time in another country, where there may be completely different prices and their own level of inflation;
  • if the conversion rate changes dramatically every month;
  • if you, God forbid, have some bitcoins.

2022 showed me that all this can happen simultaneously and for a long time, and for the first two fundamental questions, "How much money is there right now?" and "How much money was there a year ago?", it will no longer give an adequate answer.

So I want to make something that will give you an idea of your real situation, taking into account not only absolute numbers but also a bunch of other things that are happening in the economy and the world. Ideally, it should also throw you adequate recommendations to set you up for positive changes, rather than plunge you into deep depression. This has been my blue dream for about three years now, that instead of a dumb report with information that you spend too much on cafes, the app would throw you a link to a meal kit service, and tell you how much you would save if you cooked for yourself. Well, if you have any financial goals, of course, and if you're an ordinary person, not a rich tycoon.

Right now, I have version 0.1 of this app preparing, designed for just me. I've already completely switched to it from the spreadsheet in terms of tracking daily expenses because it's even more convenient for me in the app. It already "knows" almost all my income and expenses for the last 10 years, so there's plenty of material for experiments.

All that's left is to master a few scientific and technical areas, such as statistics, economics, data science, machine learning, and something else I don't know about yet. Maybe something will come up in a year ;-)