Problem Statement

The average adult spends approximately $1,497 monthly on nonessential items in the United States, totaling roughly $18,000 annually. This figure becomes even more significant, considering that the annual average wage in 2023 was $59,384. Spending $18,000 on nonessential items translates to a substantial 30% of an individual's yearly income. This considerable expenditure highlights a widespread issue: a lack of financial literacy and limited access to financial services.  Consequently, millions of individuals are dissatisfied with their financial wellness, hindering their ability to manage their finances and secure their future effectively.

Addressing this challenge requires the development of a budgeting platform tailored to alleviate the barriers these individuals face, thereby enhancing financial accessibility and literacy and, ultimately, improving overall livelihoods. BudgetBuddy, with its comprehensive features and user-centric design, has the potential to inspire and motivate individuals to take control of their financial futures, leading to a significant improvement in their overall livelihoods.

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Problem Background  

Despite being one of the world's largest economies, the United States is grappling with a pervasive issue of financial illiteracy among individuals. This is not just a personal struggle; it has far-reaching implications for the economy as a whole. A significant portion of the population, from all walks of life, is struggling with managing their finances effectively. This lack of financial literacy not only affects individuals' financial well-being but also hampers economic growth and stability.

1. Limited Understanding of Basic Financial Concepts:

Many individuals need a fundamental understanding of basic financial concepts such as budgeting, saving, investing, and debt management. As a result, they often make uninformed decisions regarding their money, leading to financial instability and stress.

2. High Levels of Debt:

The prevalence of debt, particularly consumer debt such as credit card debt and student loans, is alarmingly high in the U.S. Many individuals accumulate debt without fully comprehending its long-term consequences, often leading to financial distress and bankruptcy.

3. Inadequate Retirement Planning:

A significant portion of the population needs to plan for retirement adequately. They may need help understanding the importance of starting to save early or the various retirement savings options available to them, such as employer-sponsored retirement plans (e.g., 401(k) accounts) or individual retirement accounts (IRAs).

4. Lack of Effective Budgeting Practices:

Individuals struggle to track their income and expenses without proper budgeting skills. They may overspend, live paycheck to paycheck, and fail to build emergency savings or achieve their financial goals.

5. Limited Access to Financial Education:

Formal financial education is lacking in many schools, leaving individuals to navigate complex financial matters on their own. Additionally, there's a lack of accessible, comprehensive, and engaging resources for adults to improve their financial literacy.

6. Psychological Barriers to Financial Management:

Psychological factors such as fear, shame, and procrastination often hinder individuals from addressing their financial challenges. Without proper guidance and support, they may avoid confronting their financial issues, exacerbating their situation over time.

7. Impact on Socioeconomic Disparities:

The lack of financial literacy disproportionately affects marginalized communities, worsening existing socioeconomic disparities. Without the necessary knowledge and skills to build wealth and manage money effectively, these communities face more significant financial stability and upward mobility barriers.

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Research Insights

Using Discord and LinkedIn, 25 individuals were surveyed & 10 individuals were interviewed about their primary financial goals, current and past experiences with Budgeting apps, and their confidence in their financial literacy skills.  All interviewees expressed pain points and concerns about the features they would like to see in a budgeting platform, such as a current lack of financial and educational resources, challenges they face when managing finances effectively, challenges with financial terminology, their motivation in using a budgeting platform, their preferred way of consuming financial education, and much more. 

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User Pain Points

• “My biggest challenge when it comes to managing my finances is reducing unnecessary spending.”
• “I struggle with the discipline needed to stick to a plan.”
• “I am currently stressed about my job change due to the pay transition being month to month. I am currently biweekly.”
• “I find it hard to understand/remember tax code and other high-level financial jargon.” 
• “I would like to begin to save for a house and pay off credit card bills.”
• “When seeking financial educational resources, I lose interest or get bored of the material, or I do not use the material and forget it.”
• “Unforeseen expenses will wipe out savings we have built (ex: taxes).”
• “Challenge is learning how to best spend money. Where could money in savings go to make more money? How to properly use a credit card. Maximize money”
• “I find sticking to a budget or financial plan overwhelming as there’s so much information.”
• “I want to know how to purchase a home and turn it into an investment property.”
• “unplanned spending messed up my credit card payoff plan; now I have to re-figure it out.”

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Feedback 

Our preliminary user research, conducted with individuals between the ages of 20 and 50, has provided valuable insights. We found that these individuals have no knowledge of Investments and retirement, Loans and mortgages, and Building Credit. This comprehensive understanding of their financial literacy gaps has guided us in developing a budgeting platform that meets their needs and expectations. We also found that individuals wanted a budgeting platform that was easy to use and allowed them to sync bank accounts as well as P2P payment apps (e.g., Venmo, CashApp, Zelle). This thorough research instills confidence in the effectiveness of our proposed solution. 

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Solution Explanation

To solve the problems and challenges discovered during user interviews and surveys, the proposed solutions are as follows: 

• Integrate a “daily trivia financial fact of the day” onto the platform so that users can become financially literate and financially stable. 
• Include an “Investment/Retirement” section on the platform where individuals can learn common terminology (i.e., 401k, Roth IRA, etc.) and learn about investments and retirement by watching videos, reading articles, and connecting to common investment platforms. 
• Include a “Loans and Mortgages” section on the platform where individuals can learn common terminology, learn how to pay off debt, apply for loans, and learn the ins and outs of purchasing a home through different types of home loans offered by watching videos, reading articles, and connecting to standard Loans and Mortgages platforms. 
• Include a “Building Credit” section on the platform where individuals can learn how to build credit, manage credit, etc., by watching videos, reading articles, and connecting to common building credit platforms. 
• Include an expense tracker section where individuals can visualize their expenses. 
• Include an “Account” section where individuals can add their bank & credit card accounts, as well as P2P payment apps (Venmo, CashApp, Apple Pay, Google Pay) by using a third-party app such as (Plaid) 

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Lofi & Hifi Mockups

Lo-Fi & Hi-Fi Design - Home Page

Lo-Fi & Hi-Fi Design - Investments Page

Hi-Fi Design - Dashboard

Hi-Fi Design - Quiz Flow 

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Iterative Design Learnings

After we showcased our prototype to some users, we learned that our budgeting platform, BudgetBuddy, was easy to navigate; it included precisely what they were looking for a financial library of resources where they can learn about Investments & Retirement, Loans & Mortgages, and lastly, Building Credit. Some of the users stated the following: 

• “How do I know my financial information is secured if I sync my bank accounts?”
• “I love the idea of integrating a “Quiz me” section.”
• “Wouldn’t it be better if once you click on the “Quiz me” link on the homepage, you are taken to the sign-in page and then take the quiz instead of going straight to the quiz without signing in? That way, we could record what we’ve done.”
• “This task was really easy to follow”
• “It took me a minute to try to find the quiz button”

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Technical implementation

• ‍Where is it hosted?  It is hosted on Vercel.‍
• What is your tech stack?‍
  • Backend framework, frontend framework, CSS frameworks, database choice, and other tools and technologies used.
  • We are using Tailwind and React with Typescript. We do not have a database as we have not created a backend or connected an API. 

‍High-level journey of a request

• Talk about why you chose the tools used and how you can improve the application's design. 
  • We chose to use Tailwind as a team and, based on experience, continued to use React and Typescript. We can improve the design by making it mobile-friendly and connecting to the API.
• If you can, provide a walkthrough of the application functionality, including Creating/Retrieving/Updating/Deleting data in the application.
  • Users can sign in/up. From there, they are taken to the dashboard.
  • The dashboard provides them with the option to look through the ‘Learn Section' and learn a bit about their finances. There are also links to other websites that can further their knowledge. 
  • Users are then able to navigate to the ‘Sync Account Page.’ Here, they would connect to our third-party app ‘Plaid’ and choose to sign up using their bank account or other financial systems. Once selected, they are navigated to the 
  • Bank Sync page. This allows them to input an account number and CVC codes and choose whether it's checking or savings. 

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Technical Challenges

• ‍What was the hardest part of development?  Flex-boxes and spacing‍
• Does your app have any scaling issues? Yes, not mobile-responsive
• What are some key takeaways? Focus on being mobile responsive from the beginning. Try to get the API implemented early. 

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Future Steps 

Even though Co.Lab has wrapped up, our journey with BudgetBuddy is far from over! Thanks to the awesome feedback we've received, our whole crew is hoping to continue working on our MVP to keep improving BudgetBuddy! Our big dream? We want BudgetBuddy to be the go-to solution for tackling financial illiteracy and helping folks budget like pros.

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