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Personal Finance

How Does Penny App Work?

Updated Mar 01, 2022   |   4 mins read

Penny was acquired by Credit Karma and the app is no longer available.

The advancement of technology over the last several years has made many otherwise mundane tasks simpler and quicker for millions of consumers, not the least of which is personal finance management.

From budget applications to financial coaches, there seems to be a money-related app for just about everything. Penny falls firmly into this category – a mobile application that works as a user’s personal finance coach. The Penny app is intended to help individuals spend smarter, save more, and live an overall happier life through improved financial positioning.

Penny is available for both Apple and Android users, and while it does not offer a desktop or online version, the mobile app boasts it is able to provide in-depth, real-time insights on a user’s spending habits, as well as the tools necessary to avoid over-drafting an account or overlooking where dollars are used. Anyone who is comfortable utilizing a technology-based tool to help manage their personal finances can benefit from Penny thanks to its simple and user-friendly platform. Here’s a quick review of how Penny works.

How it Works

Penny differs from other budgeting and financial management mobile applications in that users interact with the app via text. Once an individual downloads the appropriate mobile application version of Penny (for either iOS or Android), they grant access for Penny to connect to their bank account statements. That information is then used to help manage financial activities moving forward.

When a user opens the app, Penny (the app’s friendly coach) starts chatting about money as it pertains to the accessed bank statements. The app provides detailed information as to how a user is doing for the month, how they may do with their money in upcoming months, and any bills that are slated to be paid from the connected account. The app also offers help with canceling unwanted or unnecessary services that are paid through the connected bank account.

Penny also differs from other budgeting applications because the platform automatically organizes finances and explains them in a way that is free of intimidation or stress. Through chatting via the app, Penny offers suggestions on how to save money and create (and stick with) a budget for specific financial objectives, all while assessing transactions behind the scenes.

Penny users do not pay a fee to download or use the app, but there are offers presented throughout the application from partner companies like credit card issuers and banks.

Penny offers an array of useful and fun facts related to personal finance management, including the time of day users are most likely to go shopping, or how much they spend at local coffee shops throughout a week or month.

The app also consolidates transactions across accounts to help streamline the process of monitoring and tracking spending, and keeps up with balances as they change over time. Interacting with Penny is as simple as selecting a pre-made response through the chat function and pressing send, saving the user’s time as they continue to utilize the app.

The mobile app currently connects to financial institutions within the United States only, but it does have the ability to link up with more than 10,000 banks and credit unions. Signing up for Penny takes just a few minutes after the application is downloaded, with a name, e-mail address, and password.

From there, the user inputs his or her bank account information and waits a few moments for the account to connect with the app. Over time, Penny’s algorithmic processing gets smarter based on the greater number of transactions it sees, allowing users to have a more personalized coach at their fingertips.

History of Penny

Penny app was created by a team of developers at Friendly Finances in 2015 located in San Francisco. Penny app was created as a nod to mobile budgeting apps, but with a heavier focus on personalizing the experience for each individual user.

The founders of Penny understand that breaking down financial management into digestible data can be a challenge using only a budgeting tool or account aggregation software. Instead, Penny works as a true financial coach, leading users to a better understanding of their financial situation, and helping them move to the next level, whatever that may mean for them.