During interviews, many people didn’t know how compounding interest worked or different between a 401(k) and an IRA. Their eyes glazed over when I would try to explain it to them, and would eventually admit that they didn’t want to learn. One said, “I don’t want to learn the vagaries of personal finance. Just tell me what to do.”
Problem Statement:How might we allow users to reach their financial goals without having to define them themselves?
The Big Idea: Don't Ask What They Want, Give Them a Plan
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For my initial set of test users, I customized this “Goals Checklist” according to my analysis of their financial situation and sent it to them as a PDF during the Concierge version of the service. They found the sequential aspect satisfying, but the most telling response I got was “That’s great, but can you just do it for me?”. I realized there’s a whole segment of the population who doesn’t want empowerment per se, they want automation.
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Our users didn’t want to choose their goals, learn about money, or discuss their finances, they just wanted the best practices of Personal Finance applied to their situation. I took the checklist from the Concierge version and sketched out a few designs for an interface that displayed (1) the entire list of goals, (2) which goals they had achieved, (3) and what their progress was in the current goal.
Explorations: Partial Stacks
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Once I had decided to represent money with the stack graphic, I needed a way to show progress towards a goal using the stack. The idea of showing a clear or vacant portion of the stack was moderately successful in testing, but it it was the dotted-line approach that best communicated something that was not yet there. This is also used in the Bills section to represent bill money that is only partially earmarked.
Lesson Learned: Sometimes You Can Reduce Too Much
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In a misguided attempt at simplicity, I gave up on presenting the user with specific Goals. Instead, I just took any money above and beyond a user’s Bills and Spending budgets and split it so that 1/3 was “short-term savings” (capped at $1,000) and 2/3 was “long-term savings”. Short-term savings was for “splurges and mistakes”—think a fancy diner or a parking ticket. Long-term savings was intended to be used for more substantial goals such as debt payoff, emergency savings, and investment. But people complained that they didn’t know what to do with their Long-term savings and in what sequence—pay off debt? save en emergency fund? invest?
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After feedback from users, I found a way to reintroduce Goals in an simplified and automatic capacity. Simply put, it’s (1) Pay off high-interest debt, (2) Save up a 3-month emergency fund, then (3) Invest. For debt, we prioritize the user’s smallest credit card debt, using the Debt Snowball methodology. Once all credit cards are paid off, we calculate what the user’s 3-month Emergency Fund should be and have them move it to their Savings account. Once they reach that goal, we direct the user to a short survey where we ask a few questions before telling them whether they can invest in an Roth IRA or a taxable brokerage account.
At the top you can see money that has left the account to go into Savings or to pay off debt. Below are money earmarked for those same goals that has not yet left the account.