THINK OF THE BABY!

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Young first time parents
undoubtedly have one thing in common: the baby comes first. This is our target
audience for our online service and app Think
of the Baby!
We are targeting young middle income parents that are financially
sound but should start saving up for their growing family. Babies are
expensive. Our research shows that young families of middle-income brackets
must spend about $12,500 a year on baby expenses, including diapers, formula,
furniture, clothing, etc. (http://www.parenting.com/article/the-cost-of-raising-a-baby).
Each year this rises a little too since as the baby grows, its needs change as
well. Let’s say our young family makes a collective income of $100,000 (https://nces.ed.gov/programs/coe/indicator_cba.asp); the baby expenses alone would be almost 13% of that income! Imagine that this
expense would increase to meet the needs of the family: perhaps a few family
trips, a tricycle, toys? This family better start saving up a little every
month to be able to afford the extra prices later.

This is where Think of the Baby! can help. After
taxes, health, 401k, and other bills, most families with 100k income have 25k
left for other expenses (https://moneytalkscoaching.com/the-100000-budget/).
If 12k goes to the baby, a lot of the other expenses for the time being should
be reconsidered – money can be squeezed out slowly. A portion of the money
should go to savings so that the young family can have more activities later:
maybe that trip to Disneyland the family has been dreaming of. It’s hard to
make families put aside money arbitrarily though. That’s why Think of the Baby! makes it related to
the baby! All the family’s thoughts right now are going to surround the baby,
so we can use that strength of motivation and channel it towards future saving.

Here’s what the program
will suggest: Each time you purchase something baby related, the app will
charge you an extra 20% of that cost, which will go into the “baby fund” as
savings (with interest!). This is a relatively painless way of encouraging
gradual saving. For example, if you buy a stroller that is $150, you would
simply pay $180, and $30 would automatically go to the baby fund. The app would
be connected to virtual payment methods like Google Wallet or Apple Pay to
track your spending and connect to your bank account and savings account. The
general premise is to put extra money into baby items so that you can gradually
and painlessly save, and to curb spending on other products unrelated to the
baby that might be excessive, all with the motivation of helping your baby’s
present and future life. Generally, savings on income for retirement is
typically 10% of income http://money.cnn.com/retirement/guide/basics_basics.moneymag/index7.htm.
This is usually quite a large step of transferring money into savings each
month. But with our program, 20% of around 13k for babies supplies would save
you about 3% of your income already, quite painlessly.

The online component of Think of the Baby! functions as a form
of positive reinforcement. Upon signing up at http://thinkofthebaby.com,
creating an account and entering your information (i.e. age of child, financial
information, saving behavior, a personalized page would be generated. On this
page, a photo of your child as motivation would be featured, along with a bar
goal of your projected savings based on how much you want to spend on your
child, and a bar of how much you have spent on other products not related to
your child. Each time you buy something that is child related, the bar of
savings would go up, and you watch you get closer and closer to that dream
vacation or amazing holiday present for your child. Each time you spend on
something else, you watch the other bar go up, along with warnings and
precautions.

There would also be an
online plugin component (as an extension to one’s browser – a la apps like
“Self Control” and “Go F***ing Work”) that would create in-browser pop-ups
every time you are about to buy something unrelated to the baby. For example,
if you try to buy a nice necklace for yourself on Amazon, the plugin with
create a pop-up with a photograph of your baby, asking “Are you sure you want
to buy this? Think of the baby!” This trigger would also force you to type out
in a text box why you need this item as opposed to saving the money for a child
related item / putting into the baby fund. This extra effort would be too much
activation energy to buy the excess product at hand. Also, the motivation of
your child’s wellbeing and happiness will prevent the extra spending. On the
flip-side, every time you buy something child related, a pop-up will appear
that will say that the program will charge you an extra 20% on your purchase to
go towards your savings. This will be done automatically if you have signed up
for this program, and you can choose to opt-out for each purchase, which is far
more effective to getting people to pay the extra money than an opt-in each
time program. With the money already automatically compiling, it will be
painless and motivating. Each purchase of a baby product with the extra 20%
will direct you to your account page and show the increase in your baby fund
graph, along with an exciting product that you can now afford in the future.
Since the savings will compound with interest, the graph could also show you
that just by saving, you are making your family even more money for bonding
activities and products later.

According to Fogg’s
graph, you need high motivation and high ability along with a trigger to
motivate change (https://www.dropbox.com/s/q9we1r3xu4sm5ti/behavioral%20change%20model%20Fogg.pdf?dl=0).
. We have all those factors in this program. Families are highly motivated
since they have a new child that they want to build the best life for. With the
pop-up feature of showing a photo of your child each time you buy something,
you cannot really forget this motivation. Ability is extremely high as well
because the program makes everything extremely simple. Each baby product
automatically transfers 20% to your savings, and each extra cost plays on this
model by making it very difficult: typing up reasons why you need the item, and
making you confirm that you actually need this product. The triggers are
constant: pop-ups, charts that are motivating and help you reach goals, google
wallet reminders, etc.

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