Building an AI-Powered Personal Finance App

I've embarked on a new project to solve a common yet persistent problem in personal finance: expense classification. Despite trying numerous apps, including paid ones, I've never found one that truly clicked with my needs. The goal? To create a system that makes expense tracking intuitive and efficient, without requiring deep knowledge of accounting principles.

The Double-Entry Inspiration

While exploring different approaches to financial management, I discovered the concept of double-entry accounting. What fascinated me was its elegant simplicity - with just a pen and paper, you can reliably manage your entire financial life. However, as an engineer rather than an accountant, I wanted to harness these principles without requiring users to understand the underlying accounting system.

The Solution: AI-Assisted Classification

The approach I'm taking combines three key elements:

• A pre-configured set of default accounts and hierarchical categories for expenses and assets
• Automated transaction import from bank accounts (with manual entry as a backup)
• AI-powered classification that suggests 2-3 relevant categories per transaction

The goal is to reduce the cognitive load of expense tracking. Instead of wondering "Where does this expense go?" or "What categories do I have?", users can quickly select from AI-suggested categories, making the classification process take just a couple of seconds per transaction.

First Prototype: Surprisingly Effective

For the initial prototype, I started with the basics: integrating a foundational model (Grok) with a simple prompt that specifies the output format. Despite its simplicity, the results have been remarkably promising. The AI consistently provides relevant category suggestions, making the classification process both quick and "acceptably" accurate.