Most mobile apps that relate to your finances take it as a given that you’ll be using them to spend your money. A mobile wallet app makes it even easier to pay for goods by using NFC technology or giving you location-based coupons. Banks have apps that enable P2P payments, which is certainly convenient, but won’t help you save. Now there’s an app that does: it’s called Urge.
Urge operates around Benjamin Franklin’s old maxim “a penny saved is a penny earned.” While it’s a few hundred years old, the statement still rings true. It’s incredibly easy to fritter away your money, especially when it’s invisible, and this in turn deprives you of the tangible things you really want in life — a car, an iPad, a flight to Paris, whatever. But we’re hard-wired to not think of a ticket to Paris when we think about grabbing a round of drinks or ordering Chinese instead of cooking. Urge’s website points out that the average person saves just 6.2% of their salary, but spends twice that amount on things they don’t need. Urge is an app that seeks to fix that.
“We want to show people how much they did not spend in impulse purchases,” said Salil Shibad, in a phone interview with MyBankTracker.
The idea came out of a trip to Starbucks. Looking at a constant stream of customers shelling out above-market prices for mediocre coffee, Shibad wondered: “Can you imagine the amount of money people spend on Starbucks coffee just riding to work?” And so he thought of an app that would help to keep track of the money you don’t spend on these impulse buys, to encourage people to save.
First thing you do with Urge is set up a goal — your vacation or iPad or whatever — then you connect your bank account (or not, this is optional as not all banks support it). Then, every time you have the urge to throw some money away on something you don’t really need, think about the phone in your pocket, and your goal. If you overcome the urge, you get to punch the amount you “saved” into the Urge app. If your bank account is connected, Urge can transfer that same amount to your savings account. Otherwise it just keeps track of the money you save by not splurging, to help you get the things you really want.
Without linking your bank account, Urge is totally free. To link an account costs just $1.99, one time. More than 200 banks and credit unions support the app currently, but few big financial institutions do. Capital One does, for instance, but Wells Fargo, Bank of America and Chase do not. Shibad told MyBankTracker that Urge is talking to some bigger banks about working on this — either offering the app as a white-label program or as a branded one, to bank customers.
Shibad also hopes to partner with a well-known personal finance guru like Dave Ramsey, and he also plans to add a charitable component to the app, which would allow users to instantly donate money to charity when they overcome an urge.
What’s truly interesting about the app, however, is how it uses your phone’s constant presence to remind you not to spend money. The whole entire FinTech world is convening in San Francisco right now, for Finovate, to figure out how to help you spend more money with your phone. Providing people with a way of reminding themselves of the long-term effects of their bad habits is an important step toward breaking bad habits. Canadian cigarettes have images of rotten teeth and cancerous lungs for this very reason — any one cigarette isn’t so bad, but a lifetime of cigarettes is deadly.
Speaking of cigarettes, think of this: a $12 pack a week in New York City will cost you $624 a year! You can fly to Paris for that much in July. Cigarettes are probably much cheaper there. You should start saving now.