Problem: New and existing couples usually lack financial education to discuss and run household finances, that leads to money being No.1 reason for divorces.
Solution: a Virtual Household Treasurer app that will walk the couple through complicated decisions with simple questions, automate the majority of bookkeeping, and educate the couple to set healthy financial goals.
Money is the No.1 reason for divorces. Here in Latvia we don't teach basic household or even personal "financial hygiene" in schools, the legacy of post-soviet times has left a skewed understanding of what money is, and money somehow still is a taboo topic.
Once two people form a household, they are forced to deal with Question of Finances but face various problems:
- lack of vocabulary to communicate
- lack of understanding (or even misunderstanding)
- inability to separate personal finances from household finances
- misapplication by analogy of personal finances to household finances
What it does
We will create a Product is a Virtual Household Treasurer app with an ultimate goal to have both partners personally content with the financial side of their joint household. It has many aspects, and the critical ones are:
- Mediation - first and foremost, initiate a conversation about Question of Finances. When one of the partners learns about the app, equip it with vocabulary, basic knowledge and courage, to enable him to introduce the app to the other partner. Introduce various use-cases to kickstart brainstorming about what principles they would like to choose. Teach basic vocabulary and principles to facilitate the discussion.
- Bootstrap - once decision about principles is made, walk through initial bookkeeping and educate about details.
- Routine - routinely, one or both partners will make some inputs, will look at some reports, and will seek advice on some decisions. We will automate what's possible, and utilize BigData to provide context where possible.
- Adjust - principles are flexible, can be changed and transition procedures are in place. From personal experience, we've pivoted the principles every year.
- Educate - track situations and proactively suggest personalized advice.
Our competitors are:
- Expense tracking tools: Mint, Clarify Money, Toshl, and internal tools within Revolut and some banks (e.g. Swedbank)
- Budgeting tools: YNAB, EveryDollar, PocketGuard and Goodbudget
Expense tracking tools are simple to use (or rather hard not to use in case of Revolut & banks), but mere tracking doesn’t fix bad financial habits.
Budgeting tools are of high commitment but also teaches to spend within means.
Competitors lack meaningful shared ledger functionality that has some workarounds (e.g. create separate 3rd account) but at a cost of high inconvenience (e.g. duplicate entries). None of them addresses the problem of decision making around the two most central questions in households: “how to split (income) money”, and “how to spend (expense) money“.
The Unique Selling Point (USP) of our app is to be household-first: start with principles about how to split and spend money, build one shared ledger around those agreed-on principles, and allow to adjust them anytime.
How I built it
Architecture is going to be a standard backend (python3 & django), API (json) and frontend (TS & NativeReact for mobile). The core backend library is beancount (Double-Entry Accounting from Text Files) that’s very flexible and covers all our bookkeeping needs. Later we will add a BigData stack on top of it.
Challenges I ran into
A simple way to onboard and teach users about finances, given that there are so many different people.
Accomplishments that I'm proud of
Kalvis was unsatisfied with existing tools and started custom wealth-tracking personal accounting 7 years ago. Later he started to use beancount, and has also contributed several popular plugins to it since then. Then the personal ledger was maintained in parallel with a household ledger together with Rota, until it was merged in one. Furthermore, most of the major possible hiccups have been experienced - extended periods of inactivity, change of accounting principles on average each year, as well all diverse types of income forms: unemployment, random freelancer income, stable salary, and proceeds from personal business.
We have found an ideal backbone for the product - beancount - that has survived everything we threw to it, and we understand it inside out. But it is ugly text-based program that’s even challenging to install.
We enjoy financial contentment, and after learning that so many couples don’t have it, all we wish that they would enjoy contentment too. Judging by their interest, this application is what would help them!
What I learned
Recently we have shared our experience with friends and acquaintances about personal finance, and found out that every couple at some level are not content with their household finance, have tried “to count money” but soon aborted due various reasons. More than half of them volunteer for future user tests when asked after hearing our experience, if and only if it was a convenient application, not what beancount currently is.
What's next for Viho
Next milestone is an online Quiz for a couple to determine a Income splitting model best for them.