11 Jul Budgit helps banks and their customers simplify money management
Three years ago, Ruben Izmailyan was in a very different place in life. He had just moved to Dallas with his wife for her job, and the day after they landed in town he began class at a local coding bootcamp to freshen up his technical chops. Fast forward to today, when he is now the Founder and CEO of Budgit, an automated budgeting service that helps people save more of their money. So how did he get here?
After graduating college back in 2009, Ruben was making half as much money as his classmates in New York (most of whom all worked in the financial sector). He began to notice a trend as he made his foray into the professional world: the more money he was making, the more he was spending. And it wasn’t just him; some of his richest friends were some of the brokest people he knew. Digging deeper into this issue, he learned that around half of all Americans can’t even afford a $500 dollar emergency. While this knowledge weighed heavily on him, it was his initial inspiration for creating a product that would help offer a solution to this problem. “Money is emotional and overwhelming….I just felt that it didn’t really need to be that way,” Ruben stated.
So following his completion of the coding bootcamp, and with the blessing and support of his spouse, Ruben had the tools and skill set he needed to begin his work on Budgit full time. “Helping people manage their money is like forcing them to eat their vegetables,” said Ruben. When he began work on Budgit, his goal was to find a way to effectively leverage technology to automate all of the tedious parts of money management, which he knew would be critical to the product’s success. The company itself became officially established in April of 2016.
Ruben worked full time on his first iteration of the application, which was a B2C model where users would pay a monthly subscription fee for the service to access and manage their budget, and this was the model he pitched at Dallas New Tech back in the fall of 2016. Having gained many new insights along the way regarding the competitive finance management landscape, they’ve since pivoted their business model. They’ve learned a lot since tackling this business problem, including the industry challenge of high customer acquisition costs, among other insights. This knowledge has helped them find their place in the industry, which has shifted them from a B2C model to a B2B2C model. Instead of going directly to consumers, they intend to white label their product and roll it out with smaller and local banks and credit unions. Partnering with banks would allow them to focus on the value of the product, and help customers strengthen their relationships with their own banks to prioritize managing and saving their money. Another advantage of this business model reflects Ruben’s own personal belief that businesses should not monetize user data.
The application itself is different from other financial management services, Ruben argues, in its simplicity. Instead of endless categories, like with a service such as Mint.com, Budgit focuses mainly on simplifying their users’ budgets around three primary areas: Needs, Wants, and Goals. Instead of unlimited budget categories, their users are instead limited to 10. Through their research and implementation they’ve learned and observed that too many categories can actually inhibit a user, so their application embraces simplicity in order to help their customers understand on a higher level where their money is going. When you first log in to the application, you simply link your banks, confirm your income and bills, and then you immediately receive your budget based on 90 days worth of transactional history. “Our vision is to make [this process] as easy as possible,” Ruben stated.
As Budgit grows, they are looking towards the future and what it holds for their business. Since inception, the company has added two additional team members who assist Ruben with the product, customer engagement, and bank partnerships. They’re currently looking to onboard their first two banking customers and roll out their pilot. After that, they plan to begin work on raising a seed round, as they’ve primarily been bootstrapping to date. The team believes that, along with their business model, their commitment to their customers to not sell or market with their data, that they’ll have a competitive edge to succeed in this market.