First Look: Finance Tools for Couples — The Case of the $900 Shoes

On a sunny autumn day in Manhattan, I, a former fashion reporter, stayed indoors so I could listen to The New Yorker talk with Christian Louboutin, the French designer famed for his luxurious shoes with red-lacquered soles.

Beyond learning lovely gems like the fact that suede boots can be made to look new if you hold them over a boiling pot of water, a comment made during the Q&A resonated with me: A lady from the audience took to a microphone to share how she justifies the cost of a pair of his shoes, easily upwards of $900, when her husband asks about the Louboutin transactions.

"I tell them it's for my gynecologist," she gushed.

Aha! The perfect response for women questioned about purchases by dudes who are too skittish to interrogate health-related expenses, I thought. Immediately, I made a mental note to steal her line if ever a similar situation presented itself to me. Then I wondered: I bet there's an app for resolving transaction questions like that.

In the last few weeks, I resolved to explore my hypothesis as Valentine's Day neared. Here's what I've found: There are collaboration tools designed for when one person is out shopping, while the other partner remains at home (to make sure that new living room chair is bought in the right shade, for example) and newer apps for couples who want to send private messages in different ways (there's an interesting blog on TechCrunch about this IT trend here). But financial collaboration tools, such as transaction sharing, are still being developed within many players' pipelines. They are on their way.

Mark Schwanhausser, director of multichannel financial services at Javelin Strategy & Research, kindly pointed me to a few consumer-facing tools, including HomeBudget with Sync, which lets a group of devices within the household exchange expense and income information. Another, Deskescape, allows transaction sharing among iPhones.

In the banking world, however, transaction collaboration services aren't widely available unless couples share the same account, with some exceptions. There are indicators that messaging about specific transactions will be available in future digital banking apps, to improve the customer experience.

Take MoneyDesktop, for example.

The PFM vendor, of Provo, Utah, updated its software last autumn to include a feature that lets a user send an email about a transaction to someone else through its app. A real-world case would look something like this: A spouse spots an unknown transaction. He clicks on the item to message a screenshot of it over to his wife, along with a question attached such as, "What is this about?"

Nate Gardner, vice president of client services at MoneyDesktop, says he uses the feature to communicate with his wife. "We can quickly resolve [an issue]," Gardner says.

"It's not rocket science. It's like, 'Duh, nice feature.'"

Gardner expects the capability to have utility beyond communicating with partners and to also include messaging with the likes of accountants, for example.

"We think our members might like that [feature]," says Maurice Smith, president of Local Government Federal Credit Union. The credit union, of Raleigh, N.C. has been a MoneyDesktop client for about a year.

In the financial planning world, overdraft mistakes are often made when a couple fails to communicate their purchases. "This could get everybody on the same page," says Smith.

The newer feature from MoneyDesktop points to a another trend tiptoeing into the industry: Making digital transaction streams look better than their paper counterparts. Some, like startup Simple, allow customers to attach photos to transactions, among other things, while other players, like MoneyDesktop, take a design cue from Gmail's layout playbook in allowing consumers to message about transactions and unflag transactions once they've been viewed.

Jim Breune, editor and founder of The Finovate Group and the Netbanker blog, explores the topic of couples in his latest PFM study, published in June of 2012. In the report, he writes:

"Most PFM apps seem optimized for young, well-to-do singles who enjoy the process of organizing their financial transactions, and who have enough spare time to devote an hour or two to it every week. But that's only a small part of the overall market. Banks would do well to think about the financial needs of their core profitable customer base: sleep-and fun-deprived parents.

"What we need is more like the 'Facebook of PFMs' where you can share appropriate financial details with your spouse, family, parents and other financial stakeholders in your life (CPA, bank, advisor, etc). The same concept extends to businesses with even more complex sharing needs.

On a recent call with Breune, he offered up a few suggestions on how to do this, including allowing customers to shoot emails about specific transactions through online banking as well as more subtle design enhancements like de-bolding transactions once they have been viewed. "You need a way to annotate and flag the transactions," he says. "It's a fairly obvious need. I think it's coming."

Though PFM tools, defined in the traditional sense of pie chart creation, already fulfill some of this need, Breune argues adding the design touches into the online banking experience, with or without traditional PFM tools, would benefit consumers who are a little less "hard core."

The need for such collaboration features would particularly come from small businesses, he argues. "Maybe one person in the couple controls all the spending and maybe they don't need to collaborate, but in businesses, you need to," Breune says.

Tell Me Not
Some PFM providers say they have tried to bring such transaction sharing tools to market in the past, with dim results.

Geezeo, for one, had a feature that encouraged people to communicate their financial questions and goals but the response rate was low, recalls Steven Nigri, vice president of sales at Geezeo. "In theory, it is a good application. However, in reality, the feature was not utilized enough to make it effective," Nigri wrote in an email. "Overall, only those with greater means for investing were communicating.

"We still believe that this could change over time as many online banking vendors are trying to incorporate more of this into their platforms."

Meanwhile, Ron Shevlin, senior analyst at Aite Group, says research points to the trend of a single person taking on the responsibilities of household financial management, which implies less of a need for financial collaboration tools. "This might change with younger consumers," Shevlin says. "There might be some need."

In future research, he says asking consumers whether they would like to involve their significant others in the financial management process could yield interesting responses.

Even so, Shevlin says, "My take is most of the PFM providers aren't really thinking in terms of couples." He highlights eMoney Advisor as one exception, but the high-end advisor tool is meant more for consumers to collaborate with an accountant than with a family member. He also points to newer products parents could gift to their children, which are cards that set limitations on what young adults can buy as other evidence of family-type collaboration tools available.

Relationship experts, meanwhile, caution that in-person communications are better than emails — at least when it comes to initially questioning a purchase with a significant other.

"Email communication can potentially be misunderstood or heard in a voice unintended," says Dr. Michelle Callahan, psychologist and relationship expert. "It's better to have a conversation. …especially if you are questioning a decision they made."

In good news for couples, Dr. Callahan, who partnered with Chase Blueprint for a Valentine's Day survey, found, among other things, that only six percent of Americans would break up with their significant others or think about breaking up with them if they found out their partners had $10,000 or more in debt. The research polled 1,212 respondents in January.

"Even when people are concerned about it, it's not a deal breaker," says Dr. Callahan.

The research also showed that 65% say it's best to discuss finances with a significant other within the first three months of the relationship. But "every single purchase doesn't need to be discussed," she says. "That's too controlling."

Bottom line: In the future of better designed banking user experiences and tell-all transactions, couples who want to surprise one another with gifts — or buy a gorgeous pair of Louboutins — had better use cash or retag the category "gynecologist" if they wish to keep the purchase secret.