Smart Money

Financially our lives could be improved by technology.  Great things have already started to happen... (pointing at Yodlee, Mint, TurboTax, online banking + bill pay)  but the best has yet to come.  The truth is the average person doesn't like thinking about money, and why should we? For most people money is just an obstacle between us and what we would rather be doing with our lives.  Now although I can't solve any of this, I do have an idea:  let's let our computers handle it all for us.

The average person's cash flow can be a lot more automated using infrastructure that we already have in place.  Budgeting today shouldn't take any more than a self-analyzing bank account.  My bank account has all of my information, in fact it knows more than me.  (Consider all of those purchases that I've forgotten or last-call bar tabs that I signed too drunk to remember.)  My bank account knows all about them, in fact it knows to the exact penny.   It knows how much I'm paid every month and it knows exactly when those paychecks arrive.  It knows how much my mortgage or rent is and how much my bills should be on average.  And If my bank account teamed up with my credit card than it would also know on average how much I spend a week and where that money is going.

So if I'd rather not worry about money, paying bills, and trying to keep track of where all my money is going, than let me just assign all of that work to my computers.  (After all isn't that what they are for)  Here's some example dialogue I would have with my computer.

"Computer listen up, pay my mortgage and my bills every month, put $300 bucks from my paycheck into savings and keep the rest for me to spend.  Oh also when you are paying my bills, if you see anything higher than it should be, like say if Comcast is trying to screw me, please let me know. Otherwise I don't care, just make sure everything is paid on time."

Well that's easy, with the exception of making sure Comcast isn't screwing me, my online banking and yodlee can already do all this, but there's more that I want.

"Hey Computer, I also want you to keep track of my budget. Figure out how much discretionary spending money I have each month.  Then keep track of all of my expenses and let me know when I'm about to run out of money for that month.  Computer, when I'm at Fry's trying to justify my next big purchase, I'm relying on you to give me an exact figure of how much discretionary spending I have left for that month.  And oh yeah, Computer, I don't want to spend more than 5 minutes a month answering any questions you might have.  So [in the voice of my high school's baseball coach] Figure it out!"

My hypothesis is this, people would like to be responsible with their money, and they would be if it was easy to do so.  Budgeting and tracking today is still a pain, so instead people resort to estimates (which tend to be optimistic) or just choose to ignore money altogether.  In both cases, the trend is to spend first and account later which in my opinion explains our society's love for credit cards, consumerism and low savings rate.  If we all had live-updated budgets that were readily available on our phones, making the right decision would be easy.  The best part is that my bank already has all of my information so they could roll something out like this tomorrow and it wouldn't require me, the lazy American, to do anything.

This is the information age, so give us the information.