There’s a lot of financial software out there I think of as “Tamagotchi software.” If you don’t remember Tamagotchi, it was a late-90s toy fad. Kids carried around small, egg-shaped electronic toys that showed a deranged mutant bunny on screen. The deranged mutant bunnies would grow into other forms of mutant bunny if their owners played with them regularly; otherwise, they would die.
There was something brilliant about Tamagotchi. The designers did a great job of rewarding kids for small actions, and yet making it hard for them to get to the top levels of mutant bunnydom. The result was addictive — sometimes I couldn’t help but wonder, when I saw a kid seemingly about to break out a personal day-planner just to schedule their Tamagotchi activities, which was the toy and which was the owner. Eventually, though, the game got old, and even the most devoted owners would send their mutant bunnies to the dump.
I always think of existing personal finance software as falling into the same category. If you’re really devoted, and play with it every day, your spending pie charts will get very colorful. If you walk away for too long, though, they fall over and die. Two of my fundamental beliefs about the failure of personal finance software to date are that: (1) less than 1% of all consumers are willing to put up with that model; and (2) even if you are willing to put in the work, all you get at the end of the day is a picture of where the money went, which is very different than getting actual help.