Behavioral science explains why
Yes, by hand.
Sounds old-school? Today’s Budget never connects to your bank. You add each purchase yourself. Here is what research says about that.
Card research
2×
Card payers were willing to pay up to twice as much, and remembered their spending less clearly.
The studies
Paying by card: up to twice as much
At MIT, Drazen Prelec and Duncan Simester ran real auctions for tickets to Boston Celtics and Red Sox games. Some bidders were told they would pay by card, others in cash. For the same tickets, the card bidders offered up to about twice as much.
Paying by card: harder to remember
Dilip Soman stopped 41 students leaving a campus bookstore and asked what they had just spent. Two in three cash payers knew the exact amount. Only one in three card payers did. In a second study, 30 people guessed their spending before opening their card bill. Every one of them guessed too low, by 29 percent on average. For cash and checks, they were only 7 percent off.
In Today’s Budget
Tap-to-pay feels like even less.
These studies are from before tap-to-pay, which makes paying faster still. When you log a purchase, you type the amount yourself and watch today’s number go down. For a moment, card money feels like real money again.
138 studies
Logging by hand works.
You remember more, and you reach your goals more often.
The studies
Writing the amount out helps you remember
In Soman’s lab studies, people paid for a series of purchases in different ways. When they had to write the amount out, as you do on a check, they remembered their spending better. They were also less keen to spend more on the same kind of thing.
Tracking helps you reach your goals
Benjamin Harkin and his colleagues pulled together 138 studies with almost 20,000 people. In each one, some people were asked to keep track of how they were doing on a goal, and others weren’t. The ones who kept track were more likely to reach their goal. It worked best when they recorded their progress instead of keeping it in their head, or when they shared it. Most of the goals were about health, like eating or exercise.
In Today’s Budget
Bank apps show where money went. Logging changes where it goes.
A bank app sorts your spending after it’s done. In Today’s Budget, you log each purchase by hand: you type the amount yourself while it’s still fresh, so you remember it, and you see right away what’s left for today. Every entry is a small check-in on one goal: staying within today’s number.
Why daily
A monthly budget feels far away.
Today’s number feels real.
The app divides your money by the days and spreads it out evenly, so you only ever look at today. Piggy does the dividing. You just do today.
Sources
- Prelec and Simester, 2001. Always leave home without it: A further investigation of the credit-card effect on willingness to pay. Marketing Letters 12, 5–12. doi:10.1023/A:1008196717017
- Soman, 2001. Effects of payment mechanism on spending behavior: The role of rehearsal and immediacy of payments. Journal of Consumer Research 27(4), 460–474. doi:10.1086/319621
- Harkin et al., 2016. Does monitoring goal progress promote goal attainment? A meta-analysis of the experimental evidence. Psychological Bulletin 142(2), 198–229. doi:10.1037/bul0000025