Challenge 3: Living for Two

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Introduction

As of 2014, the average age of first-time mothers in the U.S. was 26.3 years old. A child for a household can be extremely expensive, and requires a great deal of financial preparation. According to the USDA, the average annual cost of a first child for a middle-class family is $15,875. Before having a child, many families begin to save money but creating emergency funds or investing in CDs. Other families, recognizing that a child is expensive opt to splurge on entertainment and activities before having a child, knowing they won’t be able to do so in the future. Preparing for the cost of an additional household member is a challenge. Fortunately, the [Living for Two] app simulates the experience of spending for child, ensuring that an individual or couple is adequately prepared for this step in their lives.

The App

When users first sign-up they will be prompted for demographic information (age, location, income, etc.). Based on the details they provide, we will compute the costs they should expect from adding a new family member and a reasonable savings plan. Users can chose to set our calculation as their savings goal or input their own.

Every time you make a purchase under $100 that qualifies as short-term expense (Food & Household Items, Clothing and Entertainment), that amount is automatically matched by you and allocated to a savings or investment fund. You can also transfer money directly into the fund to meet your goals. You’ll feel the strain on your bank account of spending for another family member, without actually losing any money! Instead, all of this money will be put away for future use.

The app is designed to address one of the greatest psychological barriers to saving: the fact that our frame of reference is limited to the present or near future. Living for Two makes possible future conditions feel like reality. In addition to the simulated financial loss, users are confronted with an animated depiction of a “new family member” that will display emotions corresponding to the user’s spending/saving behavior. When a user consistently meet their savings goal – by spending or by directly allocating funds to the savings account – the app provides positive feedback in the form of a happy baby. Failure to allocate savings will result in a crying baby. The aim is to make our simulated reality as visceral as possible.

The app caters to two types of personalities — dual desires, if you will. Those who respond well to negative reinforcement will simply spend less, seeking to minimize to the amount of money that is drawn from their bank account all together and investing their money directly into the savings account. Those who respond better to positive reinforcement will be pleased to see their virtual baby happy and will associate their purchases with simultaneous savings.

Based on Fogg’s Behavioral Model, we sought to limit the motivation required to save while also heightening one’s ability to do so. The target audience for this app is individuals or families looking to save for a child. They need to take the initiative to sign up and set their parameters. This is the minimum amount of motivation required. However, once users sign up for the app, the requirement for high ability on Fogg’s motivation X ability chart is reduced. With every qualifying purchase, the app seamlessly adds to the savings fund. Savings are fully automated.

Sources:

https://www.cnpp.usda.gov/tools/CRC_Calculator/

http://www.npr.org/sections/health-shots/2016/01/14/462816458/average-age-of-first-time-moms-keeps-climbing-in-the-u-s

http://www.businessinsider.com/the-financial-costs-of-your-first-child-2012-12

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