Personal Finance App Development: What's the Cost?

Defining the necessary budget for mobile app development is an integral task for the development team. It’s important to estimate the cost before you begin the process.

Personal finance app development is no exception here. Taking into account that it’s part of the fintech industry, the question of costs is right up front Security measures alone will take a lot of time and money, and this doesn’t even include the app features themselves. Whether you decide to create an application for the general public or build a service for small businesses, the costs are going to be substantial.

But how much exactly? In this article, we will describe factors that can affect personal finance app development cost and provide you with average estimates.

What is a personal finance app?

In a nutshell, a personal financial app is a mobile application that helps people manage their finances. Users can add and edit their cards and bank account information, create categories of income and expenses, and track the movements of funds. These apps are usually quite simple in design and user flow so people can easily navigate them.

Personal money apps can be divided into two categories:

• Budgeting apps: They are most commonly used by private individuals to manage their finances. The most common examples include Mint, YNAB, and EveryDollar. 

• Financial management apps: These solutions are mostly used by small businesses. It helps them keep the money flow under control and follow any business-related transactions they make. Examples include FreshBooks and PocketGuard.

Now let’s move to the reasons why you may want to create a personal finance app.

Benefits of developing a personal finance app

If you still need clarification regarding building a custom solution, several points can give you clarity. 

• Opportunity for revenue generation: Personal finance apps can generate revenue through various means, such as subscription fees, in-app purchases, and affiliate marketing. With the growing demand for personal finance tools, there is a significant opportunity for revenue generation in this space.

• Improved customer engagement: For financial institutions, developing a personal finance app can help improve customer engagement and loyalty. By providing customers with a convenient and personalized financial management tool, financial institutions can strengthen their relationships with customers and increase customer retention.

• Cross-selling opportunities: Personal finance apps can provide cross-selling opportunities for financial institutions by recommending additional financial products and services based on users' financial data.

Most influential factors for the development cost

The number of factors that affect the development costs of any mobile app is quite huge. Depending on your business niche and scale, some of them will be more important and some of them will barely contribute to anything. For a personal financial app, the most crucial considerations are:

Feature set

It will define the level of complexity of your application. You can create a simple app or a more complex one. Or you can even add some one-of-a-kind custom features to stand out from competitors. Let’s discuss them in more detail.

• Basic features

These functionalities can be used for a minimum viable product (MVP) or a small-scale finance app:

1. Budgeting: Users can set a budget and track their spending against it. This feature can help users to control their spending, save money, and plan for future expenses.

2. Expense tracking: The app should provide users with the ability to track their expenses efficiently. Users can categorize their expenses and view reports that show how much they have spent in each category.

3. Bill reminders: The name speaks for itself—users should be able to set reminders for upcoming bills. It will help users avoid late fees and ensure that they pay their bills on time.

4. Goal setting: The app should allow users to set financial goals and track their progress toward those goals.

5. Security: Any fintech application should have strong security measures to protect users' sensitive financial information like password protection, encryption, and two-factor authentication.

• Advanced features

In addition to the basic features mentioned earlier, you can implement more advanced functionality:

1. Customizable alerts: Users can set customizable alerts that notify them when they reach certain financial milestones or when their spending habits deviate from their budget.

2. Integration with financial institutions: Your team can integrate the app with banks or credit card companies to provide users with real-time access to their account balances and transactions.

3. Debt payoff calculator: The app can include a debt payoff calculator that helps users create a debt payoff plan and track their progress toward becoming debt-free.

4. Retirement planning tools: The app can provide users with retirement planning tools, such as a retirement savings calculator, that help them plan for their future financial needs.

5. Tax management: The app can help users manage their taxes by providing them with tools to track their deductions, calculate their tax liability, and file their taxes.

6. Investment analysis: The app can include investment analysis tools that allow users to analyze their investment performance, compare different investment options, and build a successful investment strategy.

• Custom features

Customization providesa unique value proposition to the users and sets the app apart from others. Here are some potential killer features for your solution:

1. AI-powered financial advisor: The app can use AI algorithms to analyze users' financial data and provide personalized financial advice, similar to having a personal financial advisor.

2. Collaboration features: The app can include collaboration features that allow users to share their financial data with family members, financial advisors, or other trusted individuals to get advice and support.

3. Gamification features: The app can incorporate gamification features, such as rewards and challenges, that make managing finances more engaging and motivating.

4. Virtual assistant: The app can include a virtual assistant that helps users with their financial tasks, such as paying bills, creating budgets, and managing investments.

5. Automatic savings: The app can automatically transfer a portion of the user's income into a savings account, helping them build a savings habit without even thinking about it.

6. Credit score tracking and improvement: The app can track users' credit scores and provide personalized advice on how to improve them, including recommendations for credit cards and loans.

7. Financial education and resources: The app can provide users with access to educational resources, such as articles, videos, and courses, to help them improve their financial literacy.

8. Social responsibility and sustainability: The app can include features that allow users to invest in socially responsible and sustainable funds, aligning their financial goals with their personal values.

9. Advanced data privacy and security: The app can offer advanced data privacy and security features, such as blockchain encryption, to ensure that users' financial data is safe and secure.

The more features you decide to implement, the more time and money you will spend on the app.

Design and user experience

The next factor you will need to consider is your app’s UI/UX design. It may not seem that obvious for a financial app, but most people get the first impression with their eyes. If you want your app to be liked by users, you need to care about its looks. You can go with simple pre-made options or create a custom design.

• Simple design

When developing a personal finance app, using pre-made design solutions can be a cost-effective and time-efficient approach. There are many free or almost free presets available in the market (UI kits, design systems) that can help your design team save time and resources by providing ready-to-use design elements, components, and styles.

However, it’s important to note that using out-of-the-box design solutions may not always be the best approach. It‘s essential to evaluate your specific needs and requirements to determine the most appropriate design. 

• Custom design

Creating a custom design for a personal finance app will help you tailor the app's visual design to business needs. By creating a custom design, app developers can have more control over the user interface, functionality, and user experience, which can lead to better engagement and retention rates. However, designing the app from scratch can also be a complex and time-consuming process, requiring significant investment in design resources and expertise.

• Integration of third-party tools

 Here are some third-party options that can be integrated into an app's design:

1. Analytics tools

2. Payment gateway

3. Social media integration

4. Push notification services

5. Maps and location services

6. Chat and messaging tools

7. Image and video processing tools

Integrating these services can enhance the functionality and user experience of an app, but it's important to ensure that they are integrated securely and appropriately with the app's design and functionality.

The development team and project management

Now, the coding starts. The team of software engineers will implement all the features and design elements mentioned in the previous stage. The costs you will spend on these processes will depend on the following factors:

• In-house vs. outsourced development

If you want to have more control over the development process and nurture a skilled team for future projects, the in-house team is your choice. development refers to hiring a team of developers, designers, and other professionals to work on the project within the organization. One of the main advantages of in-house development is that it provides greater control over the development process, including the ability to ensure that the app aligns with the organization's goals and values.

On the other hand, outsourced development involves hiring a third-party vendor or agency to work on the project. A third-party team can be more cost-effective, as it allows organizations to leverage the expertise and resources of an external team without the need to invest in hiring and training internal staff.

Ultimately, the choice between in-house and outsourced development will depend on a variety of factors, including the organization's budget, timeline, expertise, and project requirements.

• Experience and expertise of developers

The level of your team’s experience can have a significant impact on how much you will pay for building your app. Engineers with more expertise are typically able to work more efficiently and effectively, which can reduce the amount of time and resources required to complete the project. They also have a better understanding of best practices and industry standards, which can help ensure that the app is developed in a way that is scalable, secure, and efficient. However, it's important to note that highly experienced and skilled developers may also come at a higher cost.

• Project management tools and processes

Effective project management can help streamline the development process, reduce the likelihood of errors or delays, and ensure that the project is completed on time and within budget. Here are some ways project management tools and processes can influence development costs:

1. Agile methodology

2. Task management tools (Trello, Jira)

3. Project scheduling (Gantt charts, project timelines)

4. Collaboration tools (Slack, Microsoft Teams)

High-quality project management can have a significant influence on development costs for a personal finance app. The above-mentioned tools can help streamline the development process, reduce the likelihood of errors or delays, and ensure that the project is completed on time and within budget.

Testing and maintenance

Moving on to the last stage—testing and maintenance. This step is just as important as the previous ones since it ensures that your service works as it should.

• Types of testing

Before your personal finance app sees the light of day, you need to make sure every part of it works like clockwork. Here are some of the most common types of tests that will help you do it:

1. Unit tests

2. Integration testing

3. System testing

4. Acceptance testing

5. Performance testing

6. Penetration testing

These tests will help ensure that the app is functional, reliable, and secure.

• Maintenance and updates

This is the last part of personal finance app development, but it technically doesn’t have an end. As long as your app is available for download in the app stores, you will need to ensure it is maintained. This can be done by bug-fixing, performance enhancement, feature updates, and security patches.

Also, don’t forget about incorporating user feedback into your updates. It can be a valuable source of insight into how the app can be improved. You should actively solicit and respond to user feedback to ensure that the app meets user needs and expectations.

Cost breakdown for personal finance app development

Now, to the main part: How much will it cost to develop a personal finance app? Well, here comes the cost estimation.

Development cost

• Hourly rates for engineers

Hourly rates can vary widely based on the team’s location, as cost of living, demand, and competition for talent can all impact rates. Here are some approximate hourly rates for software engineers in different locations based on data from several sources:

• Time estimation for each feature

The time required for each feature in a personal finance app can vary depending on the complexity of the feature, the technology used, and the level of detail required. However, here are some rough estimates of the time required to implement each of the features you mentioned:

Basic features:

Advanced features:

Custom features:

• Costs for design, coding, and testing

So, if we count how much money you will need to create a personal finance app, we’ll get the following development cost breakdown:

• Design—from $5,000 to $30,000 or more.

• Coding—from $50,000 to $250,000 or more.

• Testing—from $10,000 to $50,000 or more.

Note that these costs are rough estimates and may vary depending on the specific requirements of the app and the level of expertise of the development team. It is also important to budget for ongoing maintenance and updates to the app, which may require additional costs in the long run.

Other expenses

We have covered most of the main costs you need to consider. However, there are some additional expenses you need to consider:

• App store fees

• Hosting and infrastructure costs

• Marketing and promotion costs

How can Yellow help in building finance apps?

Yellow will provide you with expertise and resources for building a finance app. We have a team of experienced designers, developers, and project managers who will work together to create a high-quality app that meets your specific requirements.

How to Build a Personal Finance App: Essential Features and Development Steps

Do you think about building a personal finance app? This guide covers the most important aspects of the development process. Check it out!

Learn more

We can also provide a fresh perspective and outside expertise, helping to identify potential challenges and opportunities and offering innovative solutions to help the app stand out in a crowded market. By working with Yellow, you will get a dedicated team that is focused on delivering a high-quality product on time and within budget so you can focus on other aspects of your business.

Summing it up

Developing a personal finance app can be a complex and challenging process, but the potential benefits to users and the financial industry make it a worthwhile endeavor. By prioritizing key features such as budgeting, expense tracking, bill reminders, investment analysis, and advanced security, a personal finance app can help users manage their finances effectively and achieve their financial goals.