Just as I was about to move away from my tentative foray in the psychology of saving I was exploring the other week, my eye was caught by a Google alert about a newspaper article that rapidly brought my blood to boiling point.

 Behold:

"How the 50-20-30 rule will stop YOU from ever being out of pocket again: Experts share a simple yet savvy money-saving trick everyone needs to know 

• 50 per cent of earnings each month should be spent on essentials
• 20 per cent of every single month's pay check should go into savings pot
• 30 per cent can be spent on things you 'want'"

Read more: http://www.dailymail.co.uk/femail/article-3706848/How-50-20-30-rule-stop-pocket-Experts-share-simple-savvy-money-saving-trick-needs-know.html#ixzz4FUfpyxgD 

Now, much as we may want to blame this on the Daily Mail which is good at boiling bloods in general, this was lifted from another site called “Career Girl Weekly” and appropriately placed in the Pink “Femail” section. In today’s episode, I won’t even get into a feminist rant into how many shades of wrong that is, I’ll focus on the money part, in particular financial literacy and advice.

It’s easy to dismiss the above with a shrug and an eye roll because the press just needed a page filler and no one needs the infinite wisdom of “Spend less, save more” and if you read some of the 900 comments you’ll find everything from delightfully ironic ones pointing out the ridiculousness of the formulation to heartbreaking accounts from people who are genuinely barely managing to survive.

I will not even dissect how ludicrous this is in the context of the UK economy where just the cost of housing tends to be 60% of average income and over. Nor is it worth noting that for some segments, this is simply insulting and painful, whereas for other segments it’s superfluous and something one’s financial executor should loosely keep in mind when playing with portfolios. This “golden rule” indeed only applies to an infinitely thin layer of the working population that finds themselves in the position of having vast amounts of discretionary spending income and they are likely neither Daily Mail readers nor in dire need of patronising life hacks. 

Financial Literacy and general financial Advisory is a very serious topic and in my former life with Meniga we were fortunate enough to have some of the best thought leaders in the world advise on how to present some of it in the product. We had started with advice which was, if not in the least wrapped in as dumb a formulation, still merely a piece of text even when strategically placed in the context of the PFM features, but we’ve then moved to letting excellent UI make those points for us for the most part.

Whether we like to call it PFM or “enhanced informational presentation of our finances” or anything else in between, if executed correctly, the contextual and relevant view of their “Money Moments”(TM)  is giving people the right information at the right time and aids them in the decision making as well as teaches them lessons in time. 

While there are far greater experts in best ways to get financial advice across out there, let me reinforce some simple facts for any banker out there who is thinking of reintroducing an advice box with pears of wisdom such as the above in the new version of their digital bank:

1. Most people much prefer the visual representation of what they spent as pioneered by Simple, Meniga or Moven than being told anything with words – spare them;
2. If you choose to write advice anyhow – mind your tone – anything patronising (kind of like how I may come across here) – will be severely off-putting;
3. Context is everything – waste the chance to tell the customer they can get a loan while struggling at check-out and he’ll resent you for telling him so 2 days later in an email;
4. Make it fiercely relevant or it will be a nuisance - telling the customer he would be spending less on a mortgage in their area than the rent they are currently paying is great except if you choose to do it as they are checking their Free to Spend while running to catch the train;
5. Don’t let your disjointed backend systems dictate the value of the data and end up disconnected from the customer by “forgetting” details they have given you before;
6. Changing behaviour is infinitely hard but not impossible - Find ways to engage them with goals in the same fashion that the health industry does and set different expectation for different behaviour patterns;

Above all, remember that if it is to work in the interest of the consumer and establish the bank as a respected relationship partner it has to feel like an intensely personal dialogue with a friend. A tall order indeed, but I believe that if we experiment with humour, relevant personal information and use technology to empower the “when” and “why” rather than the “how” of “spend less and save more” we’ll start delivering on our help promises.

P.S. To some bankers – especially my famous Experience Supermen – the entire article I wrote here will have them roll their eyes and react with the same “no sh!t Sherlock!” indignation I had towards the initial life hack article, I know. To them I say – I seriously believe that one of the reasons why some are so far behind is that there is a serious gap between FinTech and banking in execution, between what we take as “digital DUH” and what the consumer sees. As I was pleading before, it’s time we do a collective mea culpa and accept that the overwhelming majority of bank consumers see none of the mBank wonders and the Moven magic and our disconnect between best and rest can easily mean some bank somewhere would add paragraphs of advice to their internet bank’s home page instead of offering 30 seconds loans at the point of sale together with nudges on how to manage it.