The Buddy app was created to help millennials save money for both retirement and personal use.  It acts as a “buddy system” by helping to establish methods for saving, keeping an eye out on your spending habits, and providing recommendations for ways to cut spending and increase your savings.  The app links to your bank accounts, providing an easy one-stop-shop for managing your money across different accounts.    

Many salaried employees have options through their employer to set up a retirement savings account, where a fixed percentage or amount of their income is automatically deducted from every paycheck and put towards retirement.  This system is very effective for saving, because it automatically saves and invests your money, and you are left with the remaining balance in the form of your paycheck, so you can only spend the amount you receive.  While this is a very useful tool for retirement saving, many of these systems do not have personal savings accounts, and many hourly employees are not offered such retirement savings options from their employers.  The Buddy app works by identifying your fixed income and putting a set amount of your paycheck in savings accounts before your money reaches your checking account.  By making saving money a mindless, automatic task, millennials will be more likely to save.  And by taking the money out before it reaches your checking account, people will be left with their true income (minus savings) that they can live off of and spend on rent, food, or entertainment.  The money placed into savings accounts will be hidden from your spending accounts, so it will no longer be seen as spendable money.  The app will also allow you to decide exactly how much you want transferred into your retirement and personal savings accounts.  Users can choose either a fixed percentage or dollar value for each paycheck.  The simplicity of this system will provide users with a high ability to easily be able to save and grow their money this way.                

Along with using algorithms to identify fixed income deposits and transfer money into new retirement and personal savings accounts, the app will also use machine learning algorithms to understand how much you’re spending, what you’re spending your money on, and where you’re spending your money.  By tracking your purchases and learning your habits, the app will provide recommendations for where you can cut back your spending, and how your spending habits compare to other millennials in your income bracket.  When the app provides recommendations about your spending habits, it will use cumulative to data to show how your purchases might add up over time.  For example, the app might notice that you spent $50 a month on Starbucks for the past 7 months.  The app will show you the cumulative value that you spent $350 on Starbucks over that time period.  This will help educate users about bad spending habits and how they can make changes, and show the significance of how small purchases add up over time.  Along with providing results about your spending habits and easy ways you can save money, the app will have a rewards system that recognizes changed behavior and good savings habits.  Users will be able to input goals for saving money, and this reward system will encourage better spending and saving habits by offering incentives to reach your goals.  By providing small, daily reminders about your spending habits and reminding you about your goals, the app will serve as a simple way to remind people to exercise self control in their spending.  Too many millennials cannot control their spending, so by implementing a ‘diet-like’ system of spending self-control coupled with ‘cheat days’ to treat yourself, the app will help millennials get on track with their spending and saving habits.       

Some behaviors that might detract from the success of this app include short-term desires, people’s lack of self-control, and emergencies.  People who want something right away might go into their savings account and take the money out immediately rather than allowing it to grow.  Along with that, the retirement savings account is meant to be untouched, so someone who lacks spending self-control might take money out of their retirement fund for a near-term purchase.  Additionally, various emergencies might arise that would cause someone to need money right away.  This could hinder their ability to save.  However, by implementing both retirement and personal savings accounts and auto-hiding the money from paychecks before it reaches their spending account, this app could greatly help millennials achieve their savings goals and the personal savings account could provide relief in the case of emergencies.  The buddy system reminders about spending habits will also help millennials recognize bad habits and help them become more mindful about their spending.