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How much does It cost to build the best personal finance app?


Maryna Cherednychenko - June 15, 2020 - 0 comments

PSD2 and open banking have given the green light to fintech. While earlier, non-banking firms had to go through time-consuming procedures to get to users’ data, now this scheme is greatly simplified. With the consent of the user, the bank provides financial records for public use through API. Due to this, fintech apps are mushrooming the shelves of app stores offering options to fit every taste. If you want to join their ranks, you are in the right place. In this post, we will consider how to make a personal finance app and define the cost of development.

What is a personal finance app?

First of all, let’s clarify the meaning of the concept in question. A personal finance app is designed to manage private money – to track spendings and plan a budget. Sometimes such apps are called money saving apps. They allow you to borrow, lend and even invest. The target audience of personal finance apps is end-users. It means their business model is B2C. Such apps are made for personal use and not for business goals. They aim to help people manage their money wisely.

The Liftoff report says that more and more people install and deploy financial apps on their smartphones. As of 2019, users’ activity increased by 354% compared to 2014. Such popularity is not without reason. It is explained by the benefits that the app brings to users. Here are just some pros the customers get:

An efficient way to organize finances. You can see how much money you spend on certain purchases, analyze income and expenses, and make smart decisions. Besides, you can evaluate your financial behavior and, if necessary, make adjustments.

Sense of security. With the personal app, you can be more confident in the future. The service helps distribute money between the “must-buys” and purchases for the soul. Also, you can put some money aside.

Smarter decisions. The best money management app prevents you from impulse buys. Thanks to the planning and distribution of funds, you reduce the risk of spending money in the wrong place. Thus, you can save for a thing you really need.

 

Main benefits of personal finance app

Benefits of personal finance app

Core features of the best personal finance app

There are many types of mobile apps for personal finances. They differ by purpose, complexity, and variety of features. To get a rough estimate of such software, I will list the core functionality you can find in most apps. Also, I’ll define the time for the implementation of each feature.

Registration and onboarding

“The simpler, the better” is true for any mobile app. Finance apps are complex by nature. That is why it is essential to work out all the details to make users feel comfortable during the interaction with your product. Start with the registration. Make the procedure smooth and clear.

Usually, finance apps require a lot of data to verify. Except for the name, password, email, it is necessary to enter the bank details. At Softensy, we split the registration form into several steps. At each step, we ask no more than three questions. To enhance security, we use biometric authentication. The overall time for implementing registration and onboarding features depends on the app complexity and selected technologies.

Estimated time – 300-400 hours.

Managing wallets

A personal finance app is a great way to manage all money sources in one place. To make it possible, the user may create several “wallets” as per their needs. For example, “current budget,” “savings,” “easy cash,” and so on. Each time the user makes a purchase or earns income, he or she adds an item to the appropriate wallet. Based on the records, the application analyzes the user’s budget.

Estimated time – 150-200 hours.

Tracking spendings

The money management app categorizes all costs so that the user could easily navigate their expenses. Usually, you can see the following spending groups: groceries, clothing, pharmacy, restaurants, sport, education, entertainment, and others. 

In most cases, people look for the best expense tracking app because they want to reduce their costs. The app helps choose particular commodity groups and set money limits to them. If the user exceeds the limit, the app sends a notification. Thus, the user can control costs and a budget.

Estimated time – 500-700 hours.

Defining tax expenses

Sorting recipes at the end of the month to determine which purchases are taxed is not the most exciting activity. With a budget app, you can entrust this duty to smart algorithms. The service will analyze the spendings from debit and credit cards and decide whether they are tax expenses. It can also sort them out for a particular period – a year, quarter, or month. You can download a list of tax-related costs at the end of the covered period. Thus, you can get rid of the tedious paperwork. Also, you can be sure that you won’t miss the essential tax write-offs.

The time for implementation depends on the tax laws of a particular country. Here, we give an approximate estimation for one country.

Estimated time – 250-300 hours.

Smart prediction

With the help of artificial intelligence and machine learning, the personal finance app analyzes user spending and predicts future costs. Based on the analysis, the app shows the estimated balance in a month, two, three, etc. Thus, the user can calculate the amount available after deducting the required expenses in advance. Based on this information, he or she can modify current buyings and plan future purchases.

Estimated time – 300-400 hours.

Savings purposes

I bet you faced a situation when at the end of the month or even earlier, your pocket was almost empty. When recalling your past purchases, you might have concluded that a great deal of money was frittered away, and you should postpone some big buys again. The best app for budgeting will help you in this matter.

It provides a handy visualization of spendings with charts and diagrams. Based on the data, the user can make adjustments in their financial behavior and set goals. He or she may choose to put money towards a future trip, important event, or a big purchase, such as a car or house.

Estimated time – 200-300 hours. 

Investments

It is an advanced feature powered by AI and ML. This is how it works. The app analyzes the user’s finances: income, expenses, and buying tastes. Besides, the user fills out the form about their financial goals. Based on this data, the app offers three types of investment portfolios: traditional, moderate, and aggressive. Once the user selects the portfolio, the app suggests the most appropriate investing areas.

Estimated time – 1200-1500 hours.

Credit Utilization

The credit utilization ratio shows how much credit money remains unused compared to the total sum of credit. It is calculated as an outstanding loan divided by a full credit limit and multiplied by 100. For example, if your total credit limit is $100, and your current balance is $20, the credit utilization ratio will be 20%. The optimal value of the CUR is less than 30%.

Estimated time – 350-400 hours.

 

Core features of personal finance app

Core features of personal finance app

Cost of personal finance app development

We have named the basic features of the fintech app. However, the cost of such a project includes extra costs also. They are business analysis, UI/UX design, and testing. Note that you will need a team of at least eight experts:

  • Project manager
  • Business analyst
  • UI/UX designer
  • Software architect
  • Frontend developer
  • Backend developer
  • QA engineer
  • DevOps engineer

Their average salary is $35 per hour in Ukraine. With this in mind, the total sum will be: total hours * number of team members * average hour salary.

In the table below, you can find a rough estimate of a personal finance app, including development and non-development works.

Features / types of work Hours
Registration and onboarding 300-400
Managing wallets 150-200
Tracking spendings 500-700
Defining tax expenses 250-300
Smart prediction 300-400
Savings purposes 200-300 
Investments 1200-1500
Credit Utilization 350-400
Business analysis 320
UI/UX design 240
Testing 760-950
Total (hours / $money) 4570-5710 / ~$160-200K

Best money saving apps. Examples of monetization models

Now that you know how much personal finance app costs, let’s take a look at your future competitors. Below, I have listed the best finance apps in 2020.

Mint

Mint is a serious player that entered the market in 2008. It has an extensive user base of about 14 million people. Mint mainly focuses on personal spending but has many extra features too. The most interesting ones are:

  • credit control and cost planning
  • ability to work in an offline mode
  • geotags on the places of purchases

Monetization model. Mint is a free program. It raises money through in-app advertising.

Wally

Wally is a cool app with many opportunities for customization. For example, the users can rename the categories so that the titles sound natural to them. Wally works in 52 countries of the world. The main features are:

  • monitoring costs tied to particular events
  • hints and tips based on user preferences
  • reminders of upcoming payments

Monetization model. Wally is a free app that offers some features for an extra cost. The paid options include a currency converter and advanced filtering.

Acorns

Acorns is an excellent tool for those who want to start with micro-investing. Currently, the app has almost 900 thousand users, 75% of them are millennials. The distinctive features are:

  • one-time and periodical investments
  • “found money” – an analog of cashback option
  • ability to use change for micro-investments

Monetization model. Acorns can be used for free until the user starts investing. For the investment opportunity, the app charges $1 per month.

YNAB

YNAB means You Need a Budget. It is the best budget app for planning and smart distribution of funds. The essential features are:

  • detailed transactions reports
  • easy way to set saving goals
  • accounts synchronization

Monetization model. YNAB is a paid app. It charges $50 annually. You can try it for free during the first month of usage.

Finance app monetization models

Finance app monetization models

Bottom line

Personal finance apps are now in demand. They help users do budgeting and make smart financial decisions. Thanks to intelligent algorithms, users never forget about mandatory payments. Also, they receive a notification if unplanned expenses exceed the established limit. Besides the basic functions, the app may cover investing, taxes, credit scores, and other options. It is a complex system that spreads to various aspects of financial life. The price of app development depends on the functionality and features set. If you want to make one, get in touch. We consult for free.

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