There’s a Reason a Killer Money-Saving App Still Doesn’t Exist

There is a hard truth about the business of personal finance: It’s pretty tough to make money helping people spend less money.

When Intuit shuts the budgeting app Mint down on Jan 1., it will join a packed graveyard of startups that tried and failed to cash in on financial responsibility. The problem with budgeting apps, it turns out, is that few people really want help with their budgets and even fewer are willing to pay for it.

Simple (2009-21), a digital budgeting app, was acquired by Spanish banking group BBVA for $114 million and closed six years later. Clarity Money (2016-21) closed three years after selling to Goldman Sachs Group. And there is Finn (2017-19), JPMorgan Chase’s homegrown app that sought to help millennials track their spending with emojis.

The fallout means Mint customers searching for a new place to track their spending for free, or anyone who wants to turn to budgeting apps to better manage their money should lower their expectations. If they want an app that will survive, they will either need to pay to subscribe to a competing service or manage money themselves with a spreadsheet or pen and paper.

Catherine Van Weele, a 23-year-old marketing coordinator in San Diego, spent the past week researching replacements for Mint. She said it was disappointing to learn that most existing alternatives charge a subscription fee.

For now, she has settled on using the expense tracker attached to her brokerage account from Fidelity, even though it doesn’t have all of the flexibility she liked with Mint.

“I understand that you need to pay for an app…or you’re the product, but that’s definitely a barrier for me,” Van Weele said.

Minting everything but money

Mint launched with a lofty vision of using technology to help people make better financial decisions.

There is little evidence such services move the needle much for people who aren’t already engaged with their finances. Despite developers’ best efforts, no app or service has figured out a way to make managing your day-to-day finances as engaging as trading meme stocks on Robinhood or learning a new language on Duolingo.

“Someone is going to become really, really rich if they can figure out how to get unmotivated people interested in really thinking about money,” said Utpal Dholakia, a marketing professor at Rice University who has studied people’s relationships to money.

The team behind Mint felt the drudgery of managing money just needed a Silicon Valley makeover. The service was designed to be a dashboard of your financial life, linking all your bank and credit-card accounts and automating much of the analysis of your spending. It was also free. The market for budgeting software at the time was dominated by Quicken, spreadsheet software then owned by Intuit that was sold in a box and came with a 92-page user manual.

Many Mint customers were like Julio Perez, a 35-year old event planner in New York City.

He spent a few weeks trying to get a hang of the program in 2016 but dropped it after getting frustrated by constantly having to manually edit transactions incorrectly categorized by the algorithm.

“It didn’t assign things in ways that always made sense to me,” said Perez, who prefers using a spreadsheet.

The costs of managing money

Mint made money from referral fees when users signed up for new bank accounts or credit cards that appeared in ads on the site. But the people most likely to log into the app and see the ads were among the least likely to need the products that were advertised, Dholakia said.

Emily Luck, a 31-year-old from Williamsburg, Va., diligently checked Mint at least once a week since she made a joint account with her husband in 2012. She said she never clicked on an ad.

“We just have one credit card and we’re not interested in opening a bunch of other ones, so I just ignore them,” Luck said.

Financial-data aggregators such as Mint pay to connect to each account customers want to view on their platform. This costs between $6 to $7 for a customer annually, said Aaron Patzer, who founded Mint in 2006.

“A big reason this industry has been stuck is because the aggregation challenge has been so difficult and expensive,” said Val Agostino, a former Mint executive who launched Monarch Money, a competitor, in 2021.

That challenge has become more complex as more people open multiple financial accounts.

Rocky Mark Juan, a 36-year old from the Bay Area, said he has at least 30 accounts currently linked to Mint. That list includes his four checking accounts, brokerage accounts, his mortgage, student loans and 14 credit cards. He has used Mint almost daily since 2011 and trained his budget’s algorithm to recognize subcategories as specific as “boba” tea.

“I’m one of those obsessed users,” he said.

These rising costs, coupled with low engagement, mean most of these businesses have now either thrown in the towel, or are trying to make more money from existing customers. Rocket Money and YNAB, two other popular budgeting apps, switched to subscription models in 2016 and 2017, respectively. Newer companies in the space such as Monarch Money and Tiller charged subscription fees from the beginning.

Banks build their own Mints

Despite the failure of free budgeting apps, the need for better ways to plan your money continues to grow. Households save less and borrow a lot more on costly credit cards than they did 20 years ago, federal data show.

Some banks are hoping to fill that need and can afford to offer similar features at no cost. Bank of America launched a financial planning tool in 2020 and JPMorgan Chase introduced Wealth Plan in 2022. Since Wells Fargo rolled out LifeSync to its retail bank last month, it has already reached one million users, said Evelyn Varner, the executive behind the new budgeting tool.

“Nobody wants to track an expense item for expense item tracking,” she said.

An app that scolds you to keep your wallet in your pants is never going to be as exciting as trading stocks, buying concert tickets or scrolling social media, said Patzer, Mint’s founder.

“It’s not the dopamine hit of Instagram and YouTube. It’s adult stuff. It’s responsibility.”

Write to Imani Moise at imani.moise@wsj.com