We’ve all spent a little too much on frivolous items and didn’t think much about it at the time – $5 lattes, sneakers we don’t really need, or a bunch of clearance items that, at the time, were a “good deal.” Then, the bill comes in at the end of the month, and start to wonder where all of our money went, and what went wrong. 

Frantic, some will return the products, download personal finance apps such as Mint or Chime, and try to start fresh next month after the apps have outlined the bad behaviour. 

Others will set up integrated savings programs through their banks, such as NOMI Find & Save at RBC. Or, they will look to a financial advisor to better manage their money.  

But, when an app or advisor presents consumers with all of their seemingly obvious spending mistakes, the approach doesn’t have the intended result, according to CacheFlo CEO and Founder, Stephanie Holmes-Winton, who said it just makes people feel “like garbage.”

“Most of the [personal budgeting apps] look at all the spending you’ve done, and they figure, ‘If i show you how dumb you are, you’ll get smarter,’” Holmes-Winton said. “What we learned is that if you make people feel bad, they don’t make better decisions. So the effort of getting people to focus on that they spent $400 last month at Starbucks will backfire.” 

She added that there’s nothing that can be done about it at that point, so the consumer often feels defeated about their finances, and doesn’t make the appropriate changes.  

“What I actually discovered when I was an advisor, is that the change needed is behavioural, not mathematical. It’s not because we don’t have enough spreadsheets, or apps that can track your transactions. But what do you do with that information? What do you actually change?,” she said. “So after a decade as an advisor, I had perfected a process and I got permission to charge fees for Cash Flow advice, which was actually unheard of then.” 

In 2011, she sold her practice and began travelling around North America to teach other advisors her perfected process. Equipped with a landing page and the goal of educating as many financial advisors as possible, she set out to make a difference.

“I had an inkling that it would be so much easier if it was a software, but, it just didn’t occur to me in 2001 or 2006 to build something,” she recalled. 

“Then, when we started talking to the advisors – before I even did the training sessions – the murmur was there that I probably needed to,” she said, adding that after people would praise the program and lessons they had learned, participants would almost always ask where the software was. 

She had been thinking about it, but with no technical background, it was an intimidating prospect. So she contacted a friend who ran a software development company, and asked to “borrow an engineer.” From there, she began the process of, “taking it from this thing in my head, to drawings on Post-Its and emailing it to Winnipeg, to a software that eventually morphed into what we have today.”

What they have today is CacheFlo, a financial technology company that specializes in Behavioural Cash Flow Planning™ online training, software and tools for financial professionals.

“Our software, rather than getting you to focus on all the things you overspent on, all of the things you shouldn’t do and make you feel bad, it says, ‘OK, forget that because you can’t change it anyway’ …  If I focus you on [your mistakes] too much, you’re going to get upset. If you get upset, you’re going to make worse decisions,” she said. 

“So instead, [the advisor] is going to face you forward and show you what you’re going to do going forward. It will show you how much is safe for you to spend each week on the things you can control.”

Based on product offerings at your bank, the advisor will set up the account structure to match the CacheFlo app’s recommendations, so that you have to really “misbehave on purpose,” if you spend too much. It would also show you – from week to week – how much you really have to spend on vanilla lattes and Yeezy sneakers, so that if it is a priority, you’ll prioritize it inside what you have to spend. If it’s not, then you won’t. 

But this product isn’t intended for the everyday consumer. Instead, it’s meant for financial institutions and advisors to help them make informed decisions about what consumers should do with their money. 

A lot of finance relies on a combination of rules and opinion, and the problem with opinion is that it’s not standardized in any way where you can standardize a rule,” Winton-Holmes said. “So what we see the institutions and industry wanting a lot now, is to take the knowledge and give a baseline, typical automatic default that is the most likely, best option. 

“We can apply our knowledge to personalize that, but it would be better if the tool took a more scientific or standardized approach to what we should do because it eases the burden in training, and makes the experience for the customer more consistent across the board.” 

She added that this approach will result in more people doing things that they should do, depending on how the advisor or institution is motivated or how they are structured. 

All CacheFlo materials are delivered online to allow financial professionals to complete the designation on their schedule. The Certified Cash Flow Specialist™ Designation includes more than just training — it also teaches advisors how to market and sell Cash Flow Planning™ to drastically increase profits and clients’ wealth. 

And as CacheFlo continues to grow and evolve its offerings, it does so as a 13-person team here at Volta. 

“Our experience with Volta has been fantastic. We are super happy we’re here,” she said. “It’s been really good for our ability to attract technical talent, and it’s been really good for us to feel like a software company, not to feel on the outside … It wasn’t until we moved in here that we actually plugged into all of the potential benefits that Volta and the further tech community in Halifax has to offer.

Visit the CacheFlo website to learn more. 

 

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