Rethinking Budgeting at Quo

Neel Yerneni
May 7, 2020 · 3 min read

There are a lot of great budgeting apps out there to help you manage your expenses and build healthier financial habits. No matter how customizable or “powered by Artificial Intelligence” these apps claim to be, they are rigid and inflexible in some core aspects.

When we set out to build our budgeting features, we wanted to rebuild the experience from the ground up. The question we always ask at Quo with any of our products is, how do we better align the experience with our users’ financial lives?

The Standard Budgeting Experience

These apps ask me to set consistent monthly or weekly spending limits on my different types of expenses, but my spending is typically not this predictable. If my family is visiting this week, I might spend more on groceries, and suddenly my food budget for the month is overspent. I have to go and make multiple updates in the app every time my spending doesn’t follow the cadence they expect. And don’t get me started with when I cover a split bill at dinner. For me personally and for a lot of people that we talked to, it is difficult to plan our money out so consistently. Sometimes we just want to give every dollar in our bank account a job, and that job doesn’t need to be done by today or by even by the end of the month. At the end of the day, we care about what’s in our accounts and what we are planning to spend it on.

The Envelope System

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The envelope system is a tried and true way of budgeting that involves storing your cash in physical envelopes and only spending physical cash — where each envelope is for a different “category” of spending or saving. The system makes sense in a lot of ways. First, every dollar is given a purpose, and you’re aware of how much is in a category at all times. If I’m running low on my transportation envelope, I might directly “transfer” money from my food envelope. In doing so, I will automatically become more aware of how much I’m spending on meals going forward until my next paycheck. Second, the envelopes are timeless. They don’t follow monthly or weekly cycles. Money in my food envelope stays in my food envelope unless I decide to move some of it somewhere else at some point in the future. Finally, I can take out more money once I get my paycheck to divide into the envelopes as needed.

Quo “Buckets”

Now while it’s not recommended to have all your money in cold hard cash hidden somewhere in your house, the envelope method posits some nice principles for managing your money. Given these and all the hassle behind managing physical envelopes, we decided to fully digitize the experience and allow anyone to layer it on top of their existing bank account.

A preview of what’s to come

Instead of using envelopes, we call them buckets. Not only can you easily track how much you can spend in each category, but you can also seamlessly move money between buckets, add new buckets, automatically split your future income into these buckets, and much more.

Stay tuned for more updates on our budgeting app, and in the meantime send us your thoughts and feedback on what you like or would like to see. You can reach us on social media or at contact@quo.com. We hope you and your family are staying healthy!

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official blog for Quo Finance

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