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Since its launch in 2007, Mint.com has become one of the most widely used personal money management platforms in the world, with more than 13
million users logging tens of billions of purchases at countless retailers across the nation. Why let all of that good data go to waste?
Mint decided to leverage its massive consumer following to create its first-ever Intuit Consumer Spending Index, a monster-sized snapshot of America’s spending habits from 2009 to present day.
“One of the main points [of doing the index] is that hopefully going forward we’ll be able to give Mint users and everyone in the U.S. an idea of what’s going on and how people are spending,” said Scott Baker, the Stanford University economist and data scientist charged with the daunting task of crunching the numbers for the index. “We can give a more complete and perhaps a bit more nuanced [picture] than other data sources.”
The challenge: How do you even begin to sift through 10 million+ users?
Right out of the gate, Baker had a massive pool of 13 million Mint users to contend with. That meant finding a decent sample size was no problem. The hard part was filtering through the pile to find only active users who actually reflected the demographics of the nation as a whole. (See the full methodology here.)
“It’s certainly a long process … trying to bite off manageable chunks of data you can explore and figure out how to find something meaningful,” Baker said.
Any Mint user who opted to share personal details about themselves while signing up for Mint’s services became a possible candidate, and Baker (using some serious software) whittled down that group by controlling for characteristics like age, sex, location, and income level. From there, he shrunk the pool down to roughly 2 million users.
But Mint.com users hardly reflect the nation as a whole. Demographically speaking, they are typically wealthier, younger professionals. To compensate, Baker weighted each demo using data from the Current Population Survey, an annual government-run survey of individuals and households. That let him control for big changes in Mint’s user base over time, like gender (for example, males went from 85% of their base in 2007 to just 51% in 2012).
Now for the fun part — picking apart the data
analysing all that rich data was like looking at a snapshot of the economic recovery in real time. Unless Mint.com users unlink their bank accounts from the site, their purchases are constantly being tracked, which means the index is always changing according to consumer spending power.
From the get go, Baker and the Intuit/Mint team noticed one trend: The economic recovery has been slow to boil.
“We’ve certainly seen some recovery in spending and consumption … but it’s been slower than in previous recessions,” he said. “That was true across a number of spending categories.”
But for the most part, spending has been on the rise, especially in areas like health care and education. They also solved the debate over whether men or women are bigger-spending: Men plunk down $600 to $700 more a month than women.
And while 30-something foodies have happily found their way back to pricey restaurants since the recession (a 36% increase in spending since 2009), gourmet grocery shopping increased by 17%, Mint found. And eating out is one of the first areas Americans tend to trim when cutting budgets.
The data can also show which categories of spending are most sensitive to economic strife. After the recession, charitable giving took a nose dive, only to rebound by a whopping 50% by 2013.
Looking ahead — what’s next for The Intuit Consumer Spending Index?
Now that the groundwork for the index has been laid, the hard part is over. Intuit and Mint will continue building on the index, releasing new reports each quarter.
“We’re really hoping that we can nail down the standard release and that it becomes something that we can put out regularly,” Baker said. “Then we can spend time delving into finer details or taking a look at a particular aspect one month instead of overall categories of spending.”
The next index is due out in August.
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