Friday, June 28, 2013

Impulse buying? Try "Impulse saving."

Jun 28, 2013
Startups & Venture Capital

Turning impulse buys into savings

Taryn Plumb, Special to the Journal

Phil Fremont-Smith, co-founder and CEO of ImpulseSave, says “this is the new paradigm of personal finance.”

W. Marc Bernsau 

Almost everyone makes impulse buys. But what about impulse saving? Spontaneously tucking money into a savings account instead of buying a candy bar or another item of clothing you don’t need? Helping people achieve this — and pad out their bank accounts, rather than drain them — is the objective of Cambridge-based ImpulseSave.
“It’s really very simple: In this world that’s designed to get us all to spend more money, we’ve designed a set of products that make it just as easy, if not tempting, to save money,” said Philip Fremont-Smith, CEO of ImpulseSave, who co-founded the company in 2011 with CTO John Mileham.
Users download the free iPhone or Android app, or Chrome browser plug-in, link their checking account, and set as many goals as they want (such as “vacation fund,” or “rainy-day money.”)
ImpulseSave users open a savings account with Arlington-based Leader Bank — and can then start impulse-saving.
For example, instead of giving in to the temptation of a $20 shirt at Target, a user can instead choose to transfer that same amount from their checking account to their savings through the app. Or if they’re online, a window pops up in Chrome to remind them about their goals, and to suggest saving instead — or at least putting aside a percentage of what they’re about to spend.
Although it might sound like it takes a great deal of self-control, Fremont-Smith — who hit upon the idea after working in sales and marketing for more than 15 years — called it a “fun engagement platform that people get hooked on,” because it’s “leveraging human nature, rather than fighting against it.”
Users consistently save about $3,000 a year, he said — with one even racking up as much as $30,000. The most popular savings goals are related to student debt, vacation and emergency funds.
“Where we’re headed is establishing and proving out this new model, this new paradigm of personal finance,” Fremont-Smith said.
Users can also set up auto-saves that automatically transfer small amounts to the savings account on a regular basis.
ImpulseSave user Nathan Lubich says he saved up enough over the past six months to pay for a trip to Mexico City, which he plans to take this fall.
“It’s guilt-free, because I feel that it’s specifically for that,” said the Fairfield, Conn., resident. “And it’s money that, quite frankly, I was going to spend anyway.”
In lieu of picking up a daily soda, he said, he transfers $1 or $2 to his savings account; the same goes when he finds himself shopping online late at night. It’s inevitably made him realize how small purchases of a dollar or two can add up — and where he is leaking money day-to-day. Ultimately, ImpulseSave sees wide-ranging opportunities for this kind of platform. Fremont-Smith described a “huge influx” of partners seeking to work with the company — from celebrities to financial institutions — through either co-branding or white labeling their product.
Leader Bank pays a commission to ImpulseSave whenever a user opens a savings account, and the company raised an initial investment round of $200,000 from several angel investors, including Avid founder Bill Warner.
ImpulseSave, which has five employees, took part in the 2012 TechStars Boston fall session, and is now working on completing a second seed investment round, Fremont-Smith said.

Original story here

No comments:

Post a Comment