To our parents, millennials spend money on weird things. We care less about status symbols like fancy cars and houses than we do the small, everyday luxuries. So we might go cheap on every single aspect of our lifestyle except on a $12 bottle of craft beer to reconcile our lot in life each day. And in this sense, traditional budgeting—food vs. rent vs. transportation vs. other—might not apply the same way to us.
At least that’s the bet behind Level Money, a new iPhone app that you could bill as Mint for millennials, or the wallet of the 21st century. With $5 million in KPCB-led funding and talent from places like Visa and Ideo, Level wants to rethink the traditional models of investing and budgeting. And step one of that process is removing the idea of a budget entirely.
Much like Mint (Level Money and Mint actually share a backend by Intuit), all you do is connect your bank account to the app, and it will analyze all of your income and expenses for you. Level Money’s biggest difference is on the front end—that it will leave you with with one big number in one big circle: A "money meter" that explains how many dollars you have left to spend that day, in whatever combination of mustache wax, pickling spices, and calf-hugging denim you see fit.
"Millennials want to be able to buy that $12 beer or $4 latte, whatever makes us happy on an impulsive basis, to do the things that fulfill us," explains co-founder Jake Fuentes. "But we need to know when we’ve hit the limit."
And that limit can be a tough thing to quantify in an age where physical cash is dead, and in turn we attempt to counterbalance the speed and anonymity of digital transactions through tools like spending categories. (Is a $12 beer food or entertainment?) So Level Money ignores categories altogether. All the app considers are three divisions of money: 1.) What you make. 2.) What you need to set aside for bills. 3.) What you save. In other words, how to spend the leftover cash is completely the spender’s prerogative.
"What we found was people don’t think [in budgeted categories]," Fuentes says. "They think, 'Am I generally feeling rich today?' and 'Am I generally not?' That spans the categories. It’s not limited to one."
Another interesting design fix to old electronic budgeting models is that they don’t accommodate outliers. I, for instance, might have set aside money for a new laptop. Or Fast Company may be reimbursing me for a pricey plane ticket. Mint has categorized both of these expenses as me breaking budget (which has caused me to stop using Mint). Level Money recognizes them as "unusual spending" automatically, and it’s smart enough to ignore them in terms of my daily totals—saving me from dreaded alerts.
The Level team assures me that this app is just step one in their larger mission, to be "the first financial organization designed for the next generation in mind." Beyond how they’ll even make money (which is still unclear, though I’m assured won’t involve selling data, ever), their mantra might sound like lip service. Because after all, are millennials really different from any young generation before? Maybe, maybe not. But the team is quick to point out that our environment has changed drastically, that we save almost 10% less than our parents did 50 years ago. And furthermore, they point out that Level Money, for as simple as its near-real-time interface may look, wouldn’t have been possible to conceive just three years ago, when banks posted transactions far slower than today.
Regardless of whether millennials are really all that different from every young generation before them, we’ve certainly become accustomed to the speed and convenience of digital technology, and we’re saving less money because of it. Level Money is a smart app because it designs around our contemporary impulses, whether they’re all that original or not.