1.1 Introduction
Expenses tracking is the systematic recording of all expenses incurred over a period of time. This practice helps individuals monitor their spending patterns, identify areas of overspending, and make adjustments to stay within their budget (Investopedia, 2023). Mobile-based budget and expenses tracking systems leverage the capabilities of modern smartphones, such as internet connectivity, user-friendly interfaces, and data synchronization across devices. Additionally, many of these applications offer features such as alerts for bill payments, budget planning, and the ability to link with bank accounts and credit cards, providing a comprehensive overview of one's financial status. The adoption of mobile-based budgeting tools has been shown to improve financial behavior and literacy. According to a study by the Consumer Financial Protection Bureau, individuals who use digital tools to manage their finances are more likely to exhibit positive financial behaviors, such as budgeting regularly and saving for emergencies (Consumer Financial Protection Bureau, 2018). This demonstrates the significant impact that mobile-based budget and expenses tracking systems can have on personal financial management.
As a prelude to other parts of this study, this chapter will discuss the background upon which this study was initiated, the statement of problems that led to this study, the Aim and Objectives of the study. Others are Significance of the study, Scope of work, Limitation of the study and Definition of technical terms.
1.2 Background of Study
The evolution of mobile-based budget and expenses tracking systems can be traced back to the broader development of personal finance management tools, which have significantly advanced with technological progress. Initially, personal finance management was primarily a manual process involving paper ledgers and spreadsheets. However, the advent of personal computers in the 1980s introduced software solutions such as Microsoft Money and Quicken, which automated many aspects of financial tracking and budgeting.
The transition from desktop software to mobile applications began with the rise of smartphones in the late 2000s. The launch of Apple’s iPhone in 2007 and the subsequent development of the Android operating system revolutionized the mobile phone industry, creating new opportunities for app developers. Early mobile applications focused on basic financial management tasks, such as tracking expenses and simple budgeting.
One of the first significant mobile applications for personal finance was Mint, launched in 2009. Mint allowed users to link their bank accounts, credit cards, and other financial accounts to the app, providing a comprehensive view of their financial status. The app also categorized expenses and offered budgeting tools, setting a new standard for mobile-based financial management solutions (Mint, 2009). The success of Mint and similar applications spurred further innovation in the field. As mobile technology advanced, so did the capabilities of these applications. Features such as real-time transaction tracking, personalized financial advice, and data synchronization across multiple devices became standard. The integration of artificial intelligence and machine learning further enhanced the functionality of these systems, enabling more accurate expense categorization, and customized financial recommendations.
In today's fast-paced world, effective financial management has become essential for individuals seeking to maintain control over their personal finances. With the increasing reliance on smartphones, mobile-based budget and expenses tracking systems have emerged as powerful tools for managing financial activities. These systems provide users with the convenience of monitoring their income and expenditures in real-time, setting financial goals, and making informed financial decisions. The management of personal finances has always been a critical aspect of individual well-being and economic stability. Traditionally, financial management involved manual tracking methods, such as maintaining physical ledgers and spreadsheets, which were time-consuming and prone to errors. With the advent of digital technology, these traditional methods have gradually been replaced by more sophisticated tools that offer enhanced accuracy and convenience.
The proliferation of smartphones and mobile applications has significantly transformed the way individuals manage their finances. Mobile-based budget and expenses tracking systems have emerged as innovative solutions that cater to the needs of modern users, providing them with real-time access to their financial information. These applications leverage the capabilities of smartphones to offer functionalities such as transaction tracking, budget planning, and expense categorization, all accessible through user-friendly interfaces.
The challenges encountered that led to the execution of the research work is that, one of the most significant issues associated with mobile financial management applications is the security and privacy of user data. These applications often require access to sensitive financial information, including bank account details, credit card numbers, and transaction histories. Users are understandably concerned about the potential for data breaches and unauthorized access to their financial information. A study by the Pew Research Center found that 64% of Americans have personally experienced a major data breach, highlighting the pervasive concern regarding data security (Pew Research Center, 2017).
It is against the background that the developments of this software will provide important insights into the data security and privacy implications of mobile-based financial tools. Understanding the challenges and potential risks associated with these systems can guide the development of regulations and standards that protect users' financial information while promoting innovation and the safe use of digital financial services.
1.3 Statement of Problems
Investigation revealed that maintaining user engagement and retention is another major challenge. While many users download these applications with the intention of improving their financial management, sustaining regular use can be difficult. Factors such as complex user interfaces, the perceived effort required to input data, and lack of immediate perceived benefits can lead to high dropout rates. Research indicates that 21% of users abandon an app after only one use, and only 25% of users return to an app after the first day (Localytics, 2018).
Another issue is the seamless integration of these applications with various financial institutions. Different banks and credit card companies use different protocols and security measures, making it challenging for budgeting apps to provide consistent and reliable service across all platforms. This lack of standardization can result in synchronization issues, leading to incomplete or outdated financial data within the application.
Furthermore, automated transaction categorization, a key feature of many mobile budgeting apps, is not always accurate. Misclassification of expenses can lead to incorrect financial reports and misleading insights. This can be frustrating for users and can diminish their trust in the application. According to a report by Javelin Strategy & Research, around 40% of users have encountered inaccuracies in the categorization of their transactions, which hampers their ability to manage finances effectively (Javelin Strategy & Research, 2019).
1.4 Aim and Objectives of Study
The aim of the study is to design and implement a mobile-based budget and expenses tracking system. In achieving this aim the following objectives were laid out as follows to design and develop an application software that will:
- Facilitate the accessibility of mobile-based budgeting tools for diverse user groups, including older adults and low-income populations;
- Ensure the accessibility of mobile-based budgeting tools for diverse user groups, including older adults and low-income populations;
- Explore the extent of data security and privacy concerns among users of mobile-based budgeting apps;
- Keep track of the files can at any operate the organization and client’s financial expense report; and
- Evaluate the effectiveness of existing security measures and propose improvements to ensure user data protection.
1.5 Significance of Study
The implementation of the proposed system will be significant to the following stakeholders:
- Users: For users, the significance of mobile-based budget and expenses tracking systems lies in their potential to enhance personal financial management. These tools offer real-time insights into spending habits, help users set and achieve budgeting goals, and promote better financial behaviors. Improved financial literacy and the ability to make informed financial decisions can lead to increased savings, reduced debt, and overall financial stability.
- Developers: For developers, understanding the effectiveness and user experience of these systems is crucial. Insights gained from this study can inform the design and development of more intuitive, engaging, and reliable applications. Addressing common issues such as data security, transaction accuracy, and user retention can lead to the creation of superior products that stand out in a competitive market, driving user satisfaction and loyalty.
- Financial Institutions: Financial institutions benefit from the integration of their services with mobile budgeting tools. These systems can enhance customer engagement by providing additional value through financial management features. Improved integration and seamless synchronization can lead to increased user trust and satisfaction, potentially attracting more customers to their services and fostering long-term relationships.
- Policymakers and Regulators: For policymakers and regulators, the study provides important insights into the data security and privacy implications of mobile-based financial tools.
- Financial Educators and Advocates: Financial educators and advocates can leverage the findings of this study to promote financial literacy and responsible financial behaviors. By identifying effective features and strategies within mobile budgeting apps that enhance financial knowledge, these stakeholders can better support individuals in managing their finances. This can lead to broader societal benefits, such as reduced financial stress and increased economic stability.
1.6 Scope of Study
The scope of this research is focused on the design and implementation of mobile-based budget and expenses tracking system using Rarban stores Ltd Port Harcourt in Rivers State as a case study.
1.7 Limitations of the Study
During the course of this study, many things militated against its completion, some of which are:
- Time Constraint: The time frame given to accomplish this project was very short due to school academic calendar and it was carried out under pressure which made the researcher not to implement some necessary features.
- Financial Constraint: Insufficient fund tends to impede the efficiency of the researcher in sourcing for the relevant materials, literature or information and in the process of data collection (internet).
1.8 Definition of Terms
Budgeting:
It is the process of creating a plan to spend your money, which outlines current and future income and expenses. Budgeting helps individuals manage their money, prioritize spending, and achieve financial goals (Merriam-Webster, n.d.).
Expenses Tracking:
The systematic recording of all expenses incurred over a period of time. This practice helps individuals monitor their spending patterns, identify areas of overspending, and make adjustments to stay within their budget (Investopedia, 2023).
Mobile Application (App):
Software designed to run on mobile devices such as smartphones and tablets. These applications can be downloaded from app stores and are used for various purposes, including financial management (Oxford English Dictionary, 2023).
Financial Literacy:
It is the ability to understand and effectively use various financial skills, including personal financial management, budgeting, and investing. Financial literacy is crucial for making informed financial decisions (Lusardi & Mitchell, 2014).
Data Security:
It is the protection of digital information from unauthorized access, corruption, or theft throughout its entire lifecycle. Ensuring data security is critical for maintaining the confidentiality and integrity of users' financial information (National Institute of Standards and Technology, 2020).
Privacy:
The right of individuals to control or influence what information related to them may be disclosed. Privacy in financial management involves protecting users' sensitive financial data from being accessed or shared without their consent (Pew Research Center, 2017).
Integration:
It is the process of linking different software applications and services to work together seamlessly. in the context of mobile budgeting apps, integration typically refers to the ability of the app to connect with various financial institutions and synchronize financial data (Javelin Strategy & Research, 2019).
User Engagement:
It is the degree to which users interact with a mobile application. High user engagement is often characterized by frequent and prolonged use of the app, indicating that users find it valuable and useful (Localytics, 2018).
Personal Finance Management (PFM):
The administration of an individual’s or family’s financial activities, including budgeting, saving, investing, and planning for the future. PFM tools, such as mobile budgeting apps, help users manage their financial resources more effectively (Investopedia, 2023).
Real-Time Transaction Tracking:
It is the immediate recording and updating of financial transactions as they occur. This feature allows users to monitor their spending and account balances in real-time, providing an up-to-date view of their financial situation (Financial Health Network, 2020).
