Peer at Your Peers: PFM with Benchmarking Twist

Article excerpt

Byline: Daniel Wolfe

Bundle Corp. wants to make financial management software more useful by making it more of a group experience.

There are plenty of companies now with tools that let people slice and dice their own financial data, but the updated Bundle application set to go live Friday will also let users compare their own spending habits against their peers'.

Jaidev Shergill, the New York financial software provider's chief executive, calls this approach "socially informed money management, which is money management, but with the context of how other people are spending well and saving well."

Shergill said having this comparative data can help eliminate some of the confusion often experienced with personal financial management tools.

When people first set their budgets on other PFM websites, "they don't really have a context of what the right starting point needs to be," Shergill said. In many cases, they might base their spending goals on their prior month's purchases, without a sense of whether their habits are appropriate for their level of income, he said.

Bundle, which is backed by Citigroup Inc., Microsoft Corp. and Morningstar Inc., launched its website in January with a service that lets people examine their peers' spending habits. It used large pools of aggregated transaction data, collected from Citi and other sources, that could be tracked by a wide range of parameters, including age, location, income and family status. For example, users could find out how much a married couple with kids would pay for rent in San Francisco, or how much a single man in his twenties spends on entertainment in New York.

However, that version did not let people import their own financial details - a sharp contrast to prevailing models for PFM software.

The new version corrects this. Users will be able to enter their age range, income range and other factors to see how their own spending on, for example, dining or travel compares to median spending levels of other people like them.

The system will generate actual dollar figures that people can adjust as they try to develop budgets, if they want to rein in their spending at bars, for example.

This data is presented visually, with color-coded transaction details to help people see when and where they are spending money.

Shergill said people can even drag each bubble around the screen as they try to plan their budgets - "We really tried to keep some of the dynamics of game mechanics in this, rather than try to keep it very spreadsheety," he said.

Marc DeCastro, a research manager at IDC Financial Insights in Framingham, Mass. …