Odd as it sounds, the personal budgeting company My Budget counts several accountants among its 7000 clients.
Founder and chief executive Tammy May puts this down to the difference between corporate and domestic finance. “Many of our accountant clients work in large government departments or companies,” she says. “They work on large-scale taxation and corporate finance projects, which is very different to managing a personal budget. No one is taught budgeting at school or university.”
Yet it is a skill everyone needs. May learnt this when she was working in a solicitor’s office in Adelaide in 2000 and had some dealings with debt collectors on behalf of clients. “I saw the impact debt was having on these people’s lives,” she says. “I wondered where they could go to help to control their finances.”
After making some inquiries, the then 22 year old realised there wasn’t a solution, so she created one. She began setting up budgets for her clients, which she managed for them. She worked from her kitchen table and because it predated online banking, she drove around the city collecting her clients’ pay cheques, manually depositing their rent and paying various bills at the post office.
More than a decade later the company, which appeared on the BRW Fast 100 in 2009, 2010 and 2011, employs 160 staff in 12 offices across the country, manages $220 million in salaries a year and will generate $16 million in revenue this year. My Budget doesn’t provide financial advice, sell any products or employ financial planners.
“It’s only a small percentage of the population who actually need sophisticated financial planning advice,” May says. “But everyone needs some sort of budget because it’s the basis from which you achieve financial independence. From there as you accumulate wealth you can then seek advice about tax, shares and property.”
May’s company offers a budgeting service whereby it manages clients’ money so they balance their income with their expenses to stay ahead and reach their financial goals. May admits it sounds simple but says what has underpinned My Budget’s growth is the fact budgeting is much easier in theory than in practice. And she has few competitors.
“There isn’t any one else that does exactly what we do in the personal budgeting space,” she says.
“Banks advertise debt consolidation loans and there are companies that do path lines to bankruptcy but we don’t have any direct competitors.”
My Budget’s clients are not necessarily in debt and generally aren’t close to bankruptcy.
“Our clients aren’t in the wealthiest 20 per cent of the population nor the bottom 20 per cent. They’re basically everywhere in between,” May says.
“It’s an even split between men and women and generally they’re feeling financial stress or want to improve their situation. But what constitutes financial stress is different for everyone.”
For this reason, television advertising is a winner for My Budget.
“The majority of our advertising budget goes towards television because it is an emotional purchase,” May says. “Our clients need to see it because of the emotional feeling that accompanies financial stress.
“We get significantly more leads from television than any other medium and we track that carefully.”
While the premise for her business is simple, May says the technology and systems that facilitate it aren’t.
“About a year-and-half into the business, I had to inject a reasonable amount of money to engage developers to build the first version of the software, so I mortgaged my house,” May says. “Because everything was done manually, initially it was a great foundation to build the system because I knew what worked and what didn’t.”
May employs eight full-time software developers and is continually investing in the infrastructure. “That’s what allows us to do what we do,” she says.