According to a July Gallup Poll, over two-thirds of U.S. households (68 percent) do not have a budget. This has provided a Washington, D.C.-based software company an opportunity to develop a solution. Spendology LLC developed Instant Budget for financial professionals to help their customers quickly create budgets to better manage expenses.
Instant Budget is offered as a service online and is free for the first ten clients. After that, the tiered pricing system kicks in. At the most costly tier, the solution is still relatively affordable. For 11 to 100 clients, the subscription is $120 per year, a cost that averages between $1.20 and $11 per customer, depending on volume. The volume discounts go up to an unlimited number of client subscriptions for $1,000.
Spendology was founded by Keith Ashe, a management consultant at Booz Allen Hamilton who graduated from Columbia and Florida A&M universities.
A Google (News - Alert) search on the term ‘importance of budgeting’ yields 13,600,000 results, including CPAs, credit counselors and government advice sites. The number of chapter 7 bankruptcies for the 12-month period ending March 2013 was over 804,000. This is somewhat better than the 12-month period ending March 2012, when there were over 958,000 chapter 7s filed.
However, both numbers are well above the 560,000 filings for the period ending March 2008, arguably the beginning stages of the global financial crisis related to the housing bubble and collapse of Lehman Brothers (News - Alert).
The bottom line is that budgeting is an important, but unfortunately neglected aspect of personal and household finance. Even if you file for bankruptcy, you will still have to submit a budget to the court. There’s no escaping it.
Spendology has taken advantage of two trends to tap into a market that appears to have little competition. One trend is the potential growth of cloud technology, a market expected to reach $20 billion by 2016. The other is the apparent lack of competition for affordable budgeting, especially one that can create a simple budget in just a few minutes. Hopefully more households start taking the time to make budgets. It would be one factor in turning around the lethargic global economy.
Edited by Alisen Downey