Why Fogo reasons from the income you can count on — not the one you happen to average.
1. The average is a lie about a river
Ask most budgeting tools "how much do you make?" and they'll take your deposits, add them up, divide by the months, and hand back one number. Call it $12,000 a month. Clean arithmetic. And for a salaried person it's honest — the number that lands on the 1st and 15th is the same number every time, so its average is its reality.
Now run it against someone whose income moves: a contractor, a nurse picking up shifts, a creator with sponsor months and dry months, anyone on benefits plus side work. Their twelve deposits might read $9k, $22k, $8k, $10k, $31k, $9k, and so on. Average: $12,000. Same tidy number. Except there is no month where they actually make $12,000 — the average is a place the river never is.
That's the trap. Average depth is a terrible guide to whether you can wade across. A river that averages three feet can be one foot for most of its width and eleven feet in a channel you can't see. Plan your crossing on the average and you drown in the deep part. What you actually need is the depth you can count on every step — the shallow you'll always have underfoot. For income, that shallow is the number that matters, and the average quietly hides it.
This isn't a rare edge case. The JPMorgan Chase Institute, studying the actual deposit records of hundreds of thousands of households, found month-to-month income volatility on the order of 30–40% for a typical family, and larger still for younger and lower-income households. Roughly a third of people do not have "an income." They have an income distribution. Handing all of them a single mean is handing most of them a number they'll never see on a good-planning day.
2. Measure the swing before you trust the middle
Before you can plan on the reliable part, you have to know whether income even has an unreliable part. Two people can both average $12,000: one makes exactly that every month, the other rides $8k-to-$31k. The average can't tell them apart. The spread can.
The standard tool here is the coefficient of variation — the standard deviation of the monthly series divided by its mean. It's just "how wide is the swing, as a fraction of the typical size." A salaried person sits near zero: the months barely differ, so the spread barely registers. A gig worker can sit above one: the month-to-month swing is larger than the average itself. Dividing by the mean is what makes it comparable — a $2,000 swing is nothing on a $40k income and everything on a $3k one.
Fogo computes this over your trailing deposit history and treats income as materially volatile once the swing crosses a threshold drawn from that same population research — median-volatile-household territory, not a hair-trigger. Below it, your income is steady enough that the average really is a sound basis, and Fogo leaves it alone. The point isn't to declare everyone volatile. It's to notice the ones who are, so it can stop lying to them with a mean.
3. The reliable floor: the number you can build on
Once income is volatile, the question becomes: reason from what? Not the average — we just watched that drown someone. Not the best month either; hoping for a repeat of your $31k month is how you end the quarter short.
The honest answer is the floor — a low percentile of your monthly income, the level you clear in all but your worst stretches. Concretely, Fogo takes the 25th percentile of your monthly deposits: the number you meet or beat three months out of four. On that $8k-to-$31k history, the average was $12,000 but the floor sits down around $9,000. That $9,000 is the shallow you can always wade. It's what safe-to-spend and runway should be built on — because a plan that only works in a good month isn't a plan, it's a wish.
This is the same move trustworthy tools already make elsewhere in a budget. Simple called it Safe-to-Spend; PocketGuard calls it In My Pocket — subtract what you can't count on, headline what's left. Fogo is applying that discipline one layer earlier, to income itself: subtract the months you can't rely on, and reason from the baseline you can. The behavioral stakes are real. There's a well-replicated finding — De La Rosa and Tully, Journal of Consumer Research, 2022 — that people spend against the number a tool shows them; the displayed figure becomes the anchor. Show a variable-income person their average as though it were dependable, and they'll spend toward it, and the light months will hurt. Show them the floor, and the anchor is finally something solid.
There's a quiet emotional dividend too. Planning on the floor means the surprises run in your favor. Budget on $9,000 and a $22,000 month arrives as genuine surplus — money to save, to catch up, to breathe — instead of budgeting on $12,000 and experiencing every ordinary $9,000 month as a shortfall. Same income, opposite felt experience. One version quietly tells you you're always behind. The other tells you the truth and lets the good months feel good.
4. A floor is only as trustworthy as the picture it's drawn from
Here's the failure mode you have to design against, and it's a subtle one: a floor computed from an incomplete view of someone's income isn't cautious — it's confidently wrong.
Suppose Fogo can see your checking account but your paycheck actually splits, with part landing in a savings account it hasn't been connected to. The deposits it does see look small and jumpy, so it computes a low floor and a high volatility — and then, in the name of caution, tells you to spend far less than you safely could. It has manufactured a scary number out of missing data and dressed it up as prudence. That's not honesty. That's a bug wearing honesty's clothes.
So the floor is gated on coverage. Fogo only lets the floor become the number that drives your plan when it's confident it's actually seeing your whole income — enough connected accounts, enough months of history to trust a percentile, a confidence score that clears a bar. When the picture is partial, the floor stays advisory: Fogo will mention it, but it keeps planning on the average and tells you plainly why — "this looks variable, but I may not be seeing all of it, so I'm not betting your budget on a floor I can't trust yet." A caveated figure isn't allowed to quietly become the headline. Presence in the math must earn permission before it drives a decision.
5. The line Fogo will not cross: shape, never class
One last thing, and it's the part we're proudest of. This model reads the shape of your income — how much it swings, how low the reliable floor sits. It is built to be structurally incapable of inferring why.
It would be easy, and it would be wrong, to look at low, irregular, government-timed deposits and have the system quietly conclude "disability" or "unemployment" or "benefits," and then treat that person differently. Fogo doesn't have a field for that. The volatility model carries a floor, a spread, and a confidence — and no slot, anywhere, for a benefit or health or employment class guessed from the deposits. If Fogo ever knows that context, it's because you told it, in words, on purpose. It is never inferred from the pattern of your money.
The architecture is what enforces this, not good intentions. The numbers are computed first, by deterministic math over the deposit series — coefficient of variation, a percentile, a coverage score. Only then does the language model narrate what the math already decided. That ordering is the fairness guardrail: no demographic prior, no stereotype, no guess about who you are ever touches the figures, because the figures are settled before the part of the system that could form an opinion ever runs. Math, then words — in that order, on purpose.
Principle
A single "average income" is one of the most common quiet lies in personal finance software, and it lands hardest on the people who can least afford it — the third of households whose income actually swings. The honest basis for a plan isn't the average, and it certainly isn't the hope of a good month. It's the floor: the least you can reliably count on, drawn only from a picture complete enough to trust, describing the shape of your income and never presuming to know its story. Plan on the depth you can always wade. Let the deep water be a pleasant surprise.
Sources: JPMorgan Chase Institute income-volatility research ("Weathering Volatility," 2015–2016); De La Rosa & Tully, "The Impact of Payment Frequency on Consumer Spending," Journal of Consumer Research, 2022. Coefficient of variation and percentile methods are standard. Figures in §1/§3 are illustrative.