Now with sparklines!

In my effort to give you instant transparency into where your money is going, I have added sparklines to My Crossover Point.

Building wealth and passive income is first of all about knowing where your money is going, and second of all putting your money to use where it will be most effective.

Sparklines are little graphs that give you an idea of the relative movement of a particular category over the past six months. You can see if certain spending categories have spiked recently, and use that information to empower you to make choices that will help you reach your goals.

Personal Finance Software 2.0

There are three elements of traditional personal finance software that need to be re-imagined: Goal/Purpose, Financial Reports, and Budgets.

To What End?
"To what end?" should be the question in the front of your mind. Why? Once you know "Why?" then your personal finance software should help you reach your goal. My goal is to build wealth and retire early...to reach my Crossover Point, and I want my software to funnel me towards that goal with rewards and punishments.

For example, how about a dashboard with two big red/green indicators for two questions, "Is my cashflow positive?" and "Is my net worth increasing?" Every time I tell my software about a purchase I've made it should either encourage me (or browbeat me) for getting closer to my goal (or not).

NOW!
Monthly financial reports are so 2000. How about instant, continuous feedback? All of the data is there in the software database. Why can I only get feedback about my spending habits at the end of the month?

I want to be able to see, over the past 30 days has my cashflow been positive, and has my net worth increased? I don't want to wait for a "surprise" at the end of the month, when I can make changes to my spending habits now. Here's an idea. How about a mini-dashboard at the top of every screen that tells me what my cashflow and net worth have done over the past 30 days?

If Monthly Reports are so 2000, then...
Budgets are so 1990. Instead, I'd like my software to tell me what my average spending has been for each category, and whether I am above or below that average. A person spends money on what his heart desires. Budgets don't make people overspend, and they don't make people underspend. Budgets don't change a person's desires.

What a person needs is to have a goal based on his desires, and the tools to show him how he is doing at achieving that goal. If you have a desire to build wealth, you get your hand slapped every time you overspend, and you can tell right now (!) if you are off track to reach your goal...then you don't need a budget.

Bottom line
Personal finance software used to be a passive observer that looked at your data and reported the facts. Personal Finance Software 2.0 is an active partner that makes judgments and suggestions about your spending habits.

This is why I built My Crossover Point. If you have a similar goal to build wealth, then perhaps it will help you, too.