Most Americans don’t even have $2,000 saved in the bank for a rainy day. It’s a disheartening and frequently bandied-about figure that speaks to either the strong pull of our consumer culture, stagnant wage growth over the last three decades, or maybe something elemental about human nature.
Phil Fremont-Smith, CEO of ImpulseSave, went with the evolutionary psychology explanation as he opened up his presentation at Finovate. When the human brain evolved to what it is today, Fremont-Smith explained, we were hunter-gatherers, and therefore not good planners. Fast forward to present day America, and we find that 10 to 20 percent of Americans’ disposable income is frittered away on impulse purchases, according to Fremont-Smith, on junk that no one needs, much of which people don’t even remember buying. Whether this behavior comes from the primordial savannah or more recent developments is anyone’s guess.
“Instead of changing people’s behavior to fit into savings,” said Fremont-Smith, “we’ve changed savings to fit into people’s behavior.” ImpulseSave, like Urge, which we’ve written about, gives users a means of keeping track of the impulse purchases they did not make — and lets them apply this amount toward certain savings goals.
Fremont-Smith said that their users, on average, save twice a week, about $15 per save.
On top of this, there is an optional social element, where users can share their saving data and comment on one another’s victories over impulse purchases. Perhaps surprisingly, about 40 percent of users opt into this virtual Shopaholics Anonymous, according to Fremont-Smith.