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  • Jazgul Ismailova

Why is budgeting broken?

Uppdaterad: 23 sep 2020


Budgeting is the backbone of personal finance, but why is it so hard? Here are some common barriers:

1. There is a lack of hassle-free tools.

The search for a budgeting app often leads to cumbersome Excel templates or time-consuming apps where the users have to fill in their incomes and expenses manually. There are new personal finance apps, such as Zlantar, Tink (who pivoted to serve business customers), and Spiir, which connects banking accounts and cards to collect transactions automatically. For some customers, using these tools brings more hassle than having an Excel template. They drown in data and charts, getting frustrated over incorrect classifications of expenses. Those expense trackers, when used correctly, give an overview of spending, but they do not provide an answer to the question, ‘So what? What is my remedy?’ Budgeting is an extra feature in neobanks like P.F.C., with a function of setting a weekly or category budget and quickly adjusting it if you spend over the limit. What this feature doesn’t do is solve the underlying problem of how you keep to the budget goals. 


2. It is a behavior-change business.

There is mounting evidence that when it comes to money, fitness, and diet, we face the same problem: a gap between intentions and actions. The problem is not a shortage of willpower, but a lack of the proper conditions and context that enable behavior change. The apps should incorporate nudging mechanisms and gamification to raise financial awareness, unlock motivations, and make people feel proud of their journey.

3. Budgeting is boring.

Budgeting is thought to be for Excel nerds or those with money troubles since historically, the tools were cumbersome and time-consuming. However, nowadays, regulations and technologies provide an essential opportunity to build financial tools for a broader audience. The appetite for personal finance management apps should only grow due to rising consumer credits, new types of loans fueled by ‘buy now, pay later’ business models, and information overload. Notably, the new generation, who uses apps relentlessly, will demand new types of customer experiences than what the market offers today.


Sparla solution.

We are building Sparla to overcome these frustrations. Our app will minimize cognitive overload and use machine-learning technologies to give actionable insights and help customers to rein in their spending. Most importantly, we will weld together nudging mechanisms to build better financial habits. Sparla will include a ‘guilt-free’ daily budget that can be spent without worrying. Intrinsic and extrinsic motivators, such as financial fitness scores, challenges, and proactive alerts, will be implemented to boost customer engagement.


Finally, we are bringing a higher meaning to spending less - breaking the curse of overconsumption both for the wallet and our planet. We will partner with circular brands to promote a circular economy.


Sparla is launching in Sweden in 2020. We are looking for cooperation with circular brands. Please contact us at hello@sparla.co. If you want to be among the first to test Sparla, please sign-up at sparla.co.


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