đ The Original Problem
My team and I started building Alvin last May as the solution to a problem we were each acutely feeling â there was no app we could find in Kenya that did all the following in a personalized way:
- clearly showed us where our money was going and how we should be spending to live a balanced life according to each of our goals
- made recommendations on how we should be saving and investing based on our life circumstances
- automatically adjusted our budgets in real-time based on how we spend day to day.
After digging further, we realized this was a problem for individuals across Africa, and coincidentally especially those of lower to middle incomes who feel the consequence more severely when they overspend or otherwise mis-plan their spending to get through the month while making progress toward their goals. Very inspiringly, however, we also saw countless examples where, when folks had a roadmap toward a clear, financially prosperous outcome, working class and middle class folks alike demonstrated an ability and interest to save consistently despite economic challenges (one of our favorite stories of this).
The few personal finance apps otherwise available in Africa 1.) often require you to register expenses manually in an app; 2.) donât offer data-driven personalization to show you âif you want this, then this is what your life looks like to get itâ, with daily support and gamification schemes to get there; and/or 3.) are not tailored to the intricacies of African spending and savings cultures (an example of this is the importance of appreciating irregular income flows for the majority of Africans who earn income consistently but in varying amounts week to week as entrepreneurs).
â
đŠ Poor money management = suboptimal results for enterprises
Beyond being a problem for end consumers, the lack of personalized financial guidance for consumers has real commercial implications for banks, asset managers and fintechs. These firms have an inherent interest in wanting their customers to be better stewards of their funds, but often donât offer much personalized support for them to do so. The consequence is high overdraft rates and thousands of customers who technically have the net income to afford to ultimately acquire an asset (i.e., it would take three people earning $500/month and saving $50/month just 20 months to buy an acre of land worth $3,000 USD together, with the threshold for land ownership in Kenya being even lower) or qualify for more premium loan products, but find themselves often mired in un-strategic debt or consistently overspending.
If this problem were solved, banks and fintechs would be able to not just identify more individuals to lend to who may not be salaried (this is the industryâs current focus as a whole), but they could cultivate more customers across their existing customer base to become creditworthy. Doing this would unlock millions of dollars in new revenue opportunities at a fraction of the cost to acquire a new customer.
So, weâre solving this problem, both for African consumers directly via the Alvin App as well as via the banks and fintechs whose apps Africans already use and trust.
â
đ The Alvin Mission
At Alvin, we believe all you should need to align your daily spending with a clear strategy toward buying land, a car, or achieving any other goal, is a smartphone with basic data access. The Alvin App: Labrador is our inaugural app release in Kenya to start the journey of making this a reality for all Africans. It features the ability to set and manage a budget based on your most important savings goal and automatically track your MPESA transactions accordingly to ensure youâre staying on course.
â
đ¶ How The Alvin App v1: Labrador works
- Put in your net monthly income.
- Enter the amount of your most important savings goal.
- Alvin shows you how much you can spend on Essentials versus Wants based on your savings goal reservation. You can then toggle how much you want to budget each month for rent, groceries, going out, etc., and tell Alvin which categories you want to be considered as Essentials versus Wants.
- On your home screen, see your Daily versus Weekly spending limits to stay on track toward the goal you put in the app. In addition, see how much youâre spending against these limits day to day and month to month. Alvin will check in with you about your savings timeline as you progress.
â
đ Whatâs Up Next
Immediate enhancements to the Alvin App experience are already well underway. These include introducing the ability to customize your daily and weekly spending limits, improvements to how you manage your savings progress in the app, and much much more. We also are building white-label money management widgets that can be embedded into existing banking and fintech apps to enhance the speed-to-market for enterprises to deliver personalized financial guidance to their customers.
In the meantime, download the Alvin App v1 Labrador beta app today! You can also sign up for periodical updates from us by dropping your email at the bottom of our website. See you soon!
â
- Winston
Founder & CEO at Alvin
P.S. â weâre hiring! Check out our Careers page to see currently available opportunities to join Team Alvin.
â
Which money personality type are you and how does it affect your ability to save?
Do you find it cooler to brag about how many more beers you downed over the weekend than your mates, or to see real progress toward achieving your bigger goals? Do you feel guilty when you go on a spending bender, or do you fear spending so you compulsively save and feel like youâre missing out on fun because of it?
Understanding what money management personality type you have will help you understand what habits you need to change or create to become a happy saver â one that can enjoy life now and achieve your future goals.
â
Six common money management personality types explained:
ââ
1. The investor/money-maker
Youâve got to speculate to accumulate.
The investor or money-makerâs top priority in life is making money. If youâre an investor/money-maker, you believe that life gets better the more money you make, and you often crave recognition for your financial efforts and successes.
Ability to save: Youâre good at saving because money is so important to you, but you also take risks to win bigger. By being so focused on making money, you might lose sight of the fun you could be missing out on shorter term and ultimately regret not having a more balanced approach to your financial gameplan. A budgeting app can be key to doing this easily.
â
2. The saver/compulsive saver
Maybe one day Iâll spend my savings
In one way, a bit like the money-maker, the compulsive saver sees money as a source of security. If youâre a compulsive saver, you fear impulsive spending or spending money for pleasure, so youâre an expert at hunting down bargains and pride yourself on being very careful with money.
Ability to save: Youâre an excellent saver, but, like the money-maker, you may be saving at the expense of living your life. Having a budgeting app with an expense tracker might help you achieve a better balance.
â
3. The spender/compulsive spender
Because life is for the living!
The compulsive spender is prone to extreme behaviour in all areas of life, for example going through phases of intense exercise, followed by periods of inactivity and lethargy. If youâre a compulsive spender, youâll often spend or overspend on unnecessary things to make you feel good, particularly if youâre feeling stressed. You will often feel guilty for spending but will make a point of trying to justify big spending splurges to yourself and others.
Ability to save: You probably want to save and be able to control your spending splurges, but you might not feel like you can or know where to start. Get a handle on where your moneyâs at with an app that is designed to help you do your thing each day and be in control of reaching your goals.
â
3. The gambler
Fortune favors the brave, right?
An interesting mix of money-maker and compulsive spender, the gambler is eager to make a lot of money quickly and believes taking big risks is the way to get big rewards. As a gambler, you get a real buzz from the risks that pay off, but you can feel really low about losing money.
Ability to save: Saving isnât really on your agenda â youâre all about making as much money as you can and thriving on the buzz of gambling big. It might be worth having a look at splitting up your money, so you have a pot that youâre willing to risk and a pot that youâre not. Explore how the Alvin App can help you make this distinction.
â
5. The impulse saver/spender
The occasional treat never hurt anyoneâŠ
A mix of the compulsive saver and the compulsive spender, the impulse saver/spender is smart with money but occasionally gives in to spending urges. If youâre an impulse saver/spender, youâll get satisfaction from saving money but will occasionally feel restricted and treat yourself to a spending spree, for which you might feel guilty and regretful.
Ability to save: You know how to save and youâre good at it, but your attitude towards saving is that itâs a chore and that itâs your ticket to a life of no fun. Thatâs why you sometimes fall off the wagon and why it hurts so much when you do. Getting a real handle on your money using a budget app or expense tracker could help even out your feelings towards money.
â
6. The worrier
I should probably prepare for the worst
Constantly concerned about losing money or not having enough of it, the worrier is often trying to be a better saver but doesnât always know how. If youâre a worrier, you lack confidence in your ability to ever achieve financial freedom â in other words, to feel completely secure in your ability to live your life as you want without the risk of spending more than you expected and running low. Youâll often be in preparation mode and would like support with becoming a confident budgeter and happy saver; this money management buddy could be just what the worrier needs to help build that confidence.
Ability to save: Thereâs nothing worse than feeling constantly stressed and eaten up by money worries. This happens to people who have a lot of money in the bank, as well as those who have very little â the worry isnât always about how much money you technically have but your understanding of where it comes from and where itâs going each month. Ask yourself: am I ready to understand my money, love saving, and reach my goals?
â
Which money personality type are you?
Take a minute to write a few sentences about the traits you think describe you. For example: âI feel guilty when I spend money on things I donât needâ or âIf Iâm not investing and making money then Iâm failing in lifeâ.
No matter which money personality type you are, finding the right money app is important. You need a wise money buddy that recognizes your spending habits and inclination to save so youâve got the knowledge and support to celebrate the little wins that lead to achieving those big goals.
Meet Alvin, the wise money buddy for every smartphone user in Africa.
â
