Consumer Insights on Managing Spending
The CFPB conducted research on consumer challenges in tracking spending and keeping to a budget. The research found that consumers aspire to manage their spending but for many reasons, many consumers spend more than intended and sometimes have difficulty in staying within their budgets. In addition, we found that although most people would like to use budgets and plans, they often don’t use them to guide spending decisions in the moment. Budgeting and tracking spending are often considered to be overwhelming or too much of a hassle, and even those consumers who have a budget generally do not benchmark their spending to their budget frequently or regularly.
As part of this research, we tested approaches to helping consumers deal with spending challenges. Specifically, we explored whether having real-time spending feedback at the point of purchase—via a payment card that displays instant information on how much money is left to spend in a consumer’s budget, paired with a mobile phone app with an overview of a consumer’s budget—might help consumers to manage their spending more effectively.
The research found high consumer interest in having real-time spending feedback: over 90 percent of the consumers we talked to were interested in using a tool or mobile application that gave them such feedback. Consumers reported that they thought spending feedback tools were likely to help them to curb impulse spending, make it easier to budget and stay within their budget, and reduce uncertainty about their financial situation.
Managing spending: Ideas for financial educators