Fare is a banking app designed to encourage young adults to save by monitoring
their spending at restaurants and cafes. Restaurant consumption is an activity
that young adults are likely to engage in regardless of whether or not they
have met their savings goals. This is a product of the fact that some
restaurant products are viewed as necessities (e.g., a Starbucks coffee) and
that social gatherings and events often take place over dinner. Dining out has
increasingly become a considerable expense category across all age brackets,
having overtaken grocery store spending for the first time ever in 2015.[1]
According to a report by Morgan Stanley, 25-34 year olds spend a
disproportionate amount of their income on meals outside of the home,
outspending all other consumer age brackets by about 1%.[2]
Restaurants therefore constitute a considerable expenditure category, taking
away funds that could otherwise be saved for retirement. Spare Fare capitalizes
on restaurants’ cultural import by encouraging its users to view meals out as rewards rather than regular consumption
habits. This perception shift is leveraged in order to successfully motivate
responsible saving behavior.

           According to BJ Fogg, a target
behavior will only be performed as the result of a confluence of motivation,
ability, and encouragement (i.e., “nudge” or “trigger.”)[3]
The logic behind Spare Fare is that that young people are not sufficiently
motivated to save, as the payoffs (e.g., pleasure or pain) will occur too
distantly in the future to provide an incentive. Spare Fare corrects for this
motivation deficit by offering “rewards,” or meals out. The app is not actually
offering a reward at all, as the meal will be entirely paid for by the user.
However, by encouraging users to view restaurant meals as prizes earned through
responsible saving, Spare Fare supplants the traditional motivation behind saving
with a more immediate one.

           Our algorithm makes use of the
user’s expected monthly income, age, and some current spending habits. From the
spending information, the algorithm determines what percentage of the user’s
weekly consumption is spent at restaurants or cafes. The algorithm calculates a
suggested savings rate (from 15-30%, depending on the user’s age) and provides
the user with assistance in creating and maintaining a savings account, if
necessary. It then creates a weekly budget for the user, which is the portion
of the user’s weekly income not being put into savings. It then
calculates a weekly restaurant budget, which is determined based on the
percentage of his/her spending the user prefers to use at restaurants. Unused restaurant funds from the prior week will roll over to the following week as a “bonus”. The
user’s “reward,” then, is the weekly restaurant budget plus any remaining money
from the previous week. Rollover funds are only valid for one week; anything
leftover after more than a week will be automatically placed in the user’s savings

The algorithm is structured as follows:

User inputs age
and monthly income.

App analyzes
user’s spending habits.

income) = weekly budget

% preferred
spending on restaurants x weekly budget = restaurant budget

last week’s budget – amount spent last week = rollover

budget + Rollover = Reward

           The app is synced with the user’s
calendar, allowing it to make suggestions based on upcoming events. This
feature demonstrates to the user that responsible saving and social restaurant
consumption need not come at the expense of one another. The attitude shift
encouraged by Spare Fare, rather, is that restaurant spending should be earned
through saving.


[2] Ibid.