Adam Levey, a 23-year-old graduate of the U.S. Naval Academy, is set to begin his stint as a second lieutenant in the Marine Corps in Quantico, Va. New to life outside his parents’ financial purview, he’s learning how to budget his salary of just over $3,000 a month.He’s got major expenses — a car loan on a 2012 Jeep Grand Cherokee and a career starter loan from the Naval Academy — plus twice-monthly trips to see his girlfriend in New Jersey, which cost $80 on gas alone.
Like many men his age, Levey hasn’t been the most conscientious about his money. “I spend money quickly, and I don’t think about it,” he said. “When you don’t have a girlfriend, it costs a lot of money, and when you do, it costs a lot of money. It takes a lot of discipline to manage your finances.”
To help him buckle down, he’s turned to PowerWallet, a new online money management tool. He likes it because he can see his bank accounts, loans and investments all in one place, plus get bill-pay reminders and spending-limit alerts to keep him from busting his budget.
But what really appealed were the incentives for staying on top of his balance sheet. Every time Levey accepts a coupon offer or sets a new bill-pay alert, he earns “PowerPoints.” Earn enough points and he gets cash back, in the form of gift cards or prepaid debit cards. In addition, the site offers deals custom-tailored for Levey: If his spending history shows that he’s been dropping big bucks at T.G.I.Friday’s, for example, the interface may offer him a discount alternative at Applebee’s.
PowerWallet is just one example of a new crop of budgeting tools designed with men in mind. Common wisdom holds that those in Levey’s generation are often entitled moochers, sponging off the Bank of mum and Dad, and that they lack the skills of financial independence. PowerWallet aims to help them change that with strategies that make household accounting into less of a chore and more of a game.
Getting Men to Pay Attention to the Bank Balance
PowerWallet co-founder Howard Dvorkin offers an evolutionary theory for why some young males take a back seat when it comes to household finances.
“The wife tends to grab the checkbook,” he said. “And the man goes out and hunts — I hate to bring it back to caveman days.”
But that atavistic mindset continues to prevail: In 75% of American households, women manage the expenses and pay the bills, according to a Harris Interactive survey. That left an opening for PowerWallet to engage men like Levey, who are starting to abandon those laissez faire tendencies.
Anecdotally, Dvorkin said, there has been a significantly higher user growth rate among men in recent months.
One reason may be PowerWallet’s mobile interface, which creates an easier entry point for guys on the go. “The ability to take the finances off the hard drive in the kitchen and move online where they could have access it to 24/7 was a critical point,” said Steve Smith, CEO of Mvelopes, an online budgeting tool that focuses on mobile applications. “And that’s even further extended with mobile technology.”
Perhaps counter-intuitively, the PowerWallet team has also tried to make its user experience as no-frills as possible.
“PowerWallet’s mobile site functions exactly like an app without the hassle of searching or downloading anything,” said Bob Sullivan, PowerWallet co-founder. “We believe men will find it more appealing, because it’s simple and doesn’t require a ton of work.”
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But ease of access itself isn’t enough when it comes to personal finance software. Keeping users engaged requires some incentives. PowerWallet’s technique focuses on the “gamification” of money management. When logging in or setting a spending alert earns you “PowerPoints,” budgeting starts to feel more interactive and playful. A similar method is also promoted by SaveUp, another personal finance management site.
Ditto for personalisation and special offers, like the discounts Levey got for Applebee’s. By tracking users locations and spending histories, PowerWallet offers “PowerSaver” deals designed to help people to save on the things they’re already spending on.
personalisation holds plenty of appeal for women, too, says PowerWallet beta tester Latasha Lawrence. The 26-year-old just graduated from optometry school in Fort Lauderdale, Fla., and is set to do her residency in Bloomfield, N.J. — an expensive move that has further strained her student budget.
She was aware she was overspending on some things, but she didn’t realise just how much — until she spent a couple of months testing PowerWallet.
“I knew that I was eating out a lot,” Lawrence said, “but after seeing [my expenses] all in one place on PowerWallet, it looks excessive.” She has changed her tactic and become more conscious of her spending by setting a $200 monthly food budget, cooking more and refrigerating leftovers for a couple of meals.
Now, she’s also offered deals tailored to her favourite restaurants — or equivalent competitors — to make those eating out more financially palatable.
That sort of service is the whole point, according to Sullivan.
“You may be over budget in your travel and entertainment bucket,” Sullivan observed. “We provide you with information on how to reallocate those funds and services.”
Getting people to focus on their banking — even if it takes luring them with in incentives and deals — is all the more essential in a down economy.
“Five years ago, people weren’t paying attention,” Dvorkin said. “If they did, they wouldn’t be in the shape they’re in right now. People were saying, ‘We’ll just refinance the house’ or ‘We’ll wait until I get that bonus at work,’ but now you’re lucky if you have a job. Now they have to pay attention.”
And if it takes bells and whistles, so be it.