Common sense is way to go

Christo Davel, CEO of 22seven, a new financial service, aims to "make people mindful" about how they spend their hard-earned money.

Using what is known as behavioural economics, 22seven blends a clever web-based interface and plain old common sense to show people their spending patterns.

"To get more from your money has nothing to do with money, it has to do with how you think, how you make decisions," Davel said.

The 22seven website lists your monthly expenses under three headings: day to day, recurring and exceptions.

Logging in via your internet banking, it pulls all your transactions and financial records and categorises them according to a list of regular spending: food, clothing, rent, medical, car maintenance, cellphone and internet bills.

The system colour-codes each of these expenses, and in the first few months you adjust these to make sure they are accurate.

It balances your income and spending, and shows graphically what you're spending your money on.

Testing the service himself, he discovered that the joint account he uses with his wife had R490 a month in ATM fees due to using other banks' ATMs.

"We were spending six grand a year because I didn't pay attention to it," he said.

22seven's approach is based on the work done by Dan Ariely, professor of psychology and behavioural economics at Dukes University in the US.

"The whole behavioural economics approach is not new. It's just been very complicated.

''The question is: how do you get people to engage with something? Because it's fun. You don't engage with things because it's hard. That's why kids don't engage with homework."

Davel has a track record in creating easy-to-use, web-based financial services. He launched the purely online bank 20twenty in 2001, which quickly grew to be the largest web bank at the time.

The 22seven service, which will charge a monthly subscription fee, approaches money management by making it more than just filling in an income and expenditure account, which is the usual way of doing personal budgets.

Davel aims to make 22seven into "Bloomberg for the masses" referring to the financial services that stock traders use for stock market information.