How does Plum know how much to save for you?

AKA — The Algorithm

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Plum is a finance savvy chatbot that uses AI to help you manage your money and be better off. In ‘Making Plum’, you can see Plum evolve and how features are developed.


Plum’s algorithm was built with one objective in mind:

Naturally, your spending varies from month to month which can make saving tricky. Plum is built as the solution to that. It perfectly adjusts how much to save as you go through different spending cycles. It does the hard calculations and predictions for you.

How it works:

  • When you connect your account to Plum we get 3–12 months of bank transactions. This allows us to understand your spending patterns. It also allows us to know when you normally have a big bill coming up (like your rent) and when you typically get paid.

  • Plum uses this information to calculate how much it can safely put away for you without compromising your historic lifestyle. Plum recalculates every few days based on your recent spend and saves what you can afford. The money will move out of your account through Direct Debit which is sponsored by our partners GoCardless.

  • The beauty of Plum is that you don’t need to operate the controls, there is no need to manage Plum by pausing and restarting when you think you can’t save. The whole idea behind Plum is that it will adjust to your spend and unique profile.

What we take very seriously:

We are fully aware that earning and spendings can be very volatile and in constant change. Plum was designed to take this uncertainty into account and instantly adjusts to changes. More than that Plum always errs on the side of caution, it is programmed to make sure you have more than enough to get to the end of the month so will cut saving very drastically if you have less money.

Four important principles:

  1. Less income this month — If you have less income this month we will dramatically reduce savings or might not even save for you.

  2. More income this month — If you suddenly have more than you normally have we don’t jump to the conclusion that the additional money is there to stay and won’t save from it.

  3. End of the month — If you are a few days away from the next pay check we will reduce how much we save for you to the point of not saving anything.

  4. Save little and often — Plum aims to save 5–7 times a month for you thus allowing for your spending to be different every month. It doesn’t make you commit to a big chunk at the beginning or end of the month.

A few scenarios on how Plum behaves:

  1. I just moved a big amount of money into my account because I plan to buy an expensive flight in 2 weeks. Will Plum think that is money it can save? — No

  2. I will get paid 5 days later this month. — Plum will radically reduce how much it will be saving for you as soon as you don’t get paid.

  3. I got paid less this month. — Plum will drastically reduce how much it saves going forward.

  4. My friend paid me £1,000 for a trip where I will pay for a group of us. — Plum will not assume that money is for saving unless it stays there for an extended period of time.

  5. It’s the end of the month and I have less available balance in my account. — Savings will appropriately reduce.

  6. I want to spend more in 2 weeks time as I will be on holiday. — Plum will adjust to your holiday spend when you start spending. You can always withdraw some money of your Plum savings to enjoy on holiday.

Remember we also have a savings mood feature, if you are feeling more ambitious or maybe want to relax your savings, simply let Plum know.