We spend our money unconsciously, yet we can’t seem to save up even if we make a conscious effort to do so. But what if we could save without even trying? Yes, there’s an app for it. Brand new Barcelona fintech startup Saveboost has built a solution that helps users put aside spare change without noticing it – and it’s making people burst out in surprise when they realize just how full their digital piggy bank can get in a few months. We’ve caught up with Saveboost’s CEO and Co-founder Thiago Monteiro to talk about what brings him to Barcelona, how his startup came to be and how they’re using people’s mental responses to help them make better decisions for themselves.
Starting a fintech startup in Barcelona, and why we all need an app to do our saving for us
The idea of Saveboost was inspired by Thiago’s personal experiences growing up in Brazil amidst a severe economic crisis, and his impressions of the level of financial consciousness here in Spain.
“During my childhood, there was so much inflation in Brazil that you could go to the supermarket twice in the same day and the prices would change. Every time my mom got home from work, I would ask her a question like: how much was a bottle of coke? I couldn’t even understand the concept of something having a steady price. Now, I understand the importance of being financially healthy. People don’t pay as much attention to that as they do to their physical and mental health. In Brazil, I had seen many families destroyed because one of them lost their jobs and they had no savings. And not having savings is a huge problem here in Spain too, especially for people with low incomes and no investment.”
This understanding, combined with the desire to find a startup project to work on, led to a product that could bring the uninvested to the market and potentially save lives.
“There were some numbers that we just couldn’t believe. 70% of people in Europe don’t have enough savings for emergencies. That means that two in three people are going to be in disastrous situations if they lose their jobs. What’s even more staggering is that 80% of people are not investing their money. Even if they have savings in banks, the interest rates are so low that it’s not bringing any return. Banks make it super difficult for you to put money aside and then take it out. They don’t care about making it simple and providing you with a good experience.”
Thinking about money and managing your savings can be overwhelming, stressful and it requires a lot of effort. It’s exactly this complexity that Saveboost is aiming to take out of the equation for its users.
Saveboost is a digital piggy bank in the form of a mobile application that does your saving for you. The goal is to make saving unconscious, the same way that spending is unconscious for most people. Using the Saveboost app, you can select different saving plans such as putting aside the spare change after every purchase you make with your card, ‘taxing’ yourself and saving 2% of your total expenses, and so on. You can also invest your money – in real estate, in Bitcoins, in the stock market, etc. And you can save for certain long and short-term goals, like a vacation in 6 months or a college fund for your children.
Trick yourself into saving with some clever mind tricks
Thiago and his team are creating a new saving method for every excuse that people have not to save money. Behind what seems like a simple piggy bank application is a conscious effort to design an experience that triggers mental cues that people respond to.
“When building the app, we focused on trying to understand the small psychological triggers that influence people’s decisions. One of the first decisions we made was to keep your savings somewhere else, not in your bank account. It’s your money, so you can get to it whenever you want. But at the same time, it’s better for you if you don’t touch it. It takes two taps to send it back to your bank account, but those little frictions make all the difference. Because it makes you think twice. And maybe you’ll end up thinking: you know what, actually, I can live without that money. People are much more flexible than you’d think, they can adapt their lifestyle easily.”
“A new feature that we’re developing right now is something like a ‘virtual expense’. Here’s an example. You go to a clothing shop, and you spot a t-shirt that you like, but you’re not sure if you should buy it or not. So you go to the app, and there’s a button that says ‘Buy t-shirt’. You tap that button, and you get a notification that the price of the t-shirt has been charged on your account. Of course, you didn’t really buy the t-shirt. The amount has gone into your savings. However, you’ve spent the money, you’ve made a purchase, and you’ve triggered that aspect in your mind. It’s just another way to save when you’re having doubts about spending a certain amount.”
Saving apps have been popular in the US for quite some time. One of the leading apps in the US market uses an algorithm that calculates the average amount of money you spend in a certain period of time, and saves the rest if you spend less than your average. However, this may not be the best solution for the Spanish market just yet.
“We are developing our own smart saving method, but we haven’t launched it yet. We noticed that here, people prefer the open box to the black box. They like to know exactly what the saving method is based on, for example, putting aside spare change, as opposed to an algorithm calculating the amount based on who knows what. It’s a matter of providing our users with transparency. We have to build trust, because all of this is very new. There aren’t that many financial innovative products that could have paved the way for us, and for users to start trusting fintech companies like us. It’s a part of a cultural shift that’s starting to happen.”
The goal of Saveboost is not try to teach you how to save or make it something that you enjoy. It’s to take the burden off of your shoulders.
“Everyone hates saving. It’s horrible. You have to give up on things. And you don’t see the results until much, much later in your life. So we’re trying to make sure that you don’t have to think about it at all. We encourage people to start small, to save for something concrete, and to set short-term goals, up to 6 months. What we’re trying to recreate is that magic moment of surprise when you break open a piggy bank after a couple of months of saving. Most people don’t even realize how much they can save just by putting away those little coins. I myself have been very surprised by how much it adds up. And for the first time in my life, I’m glad that I don’t know how to save money.”
The startup ecosystem in Barcelona – as seen by a startup founder
Just like we do with every founder that we interview, we asked Thiago what he thinks about Barcelona as a startup hub.
“Barcelona is a small city, but at the same time, it’s the capital of the world. This contrast is exactly what made me fall in love with the city when I was backpacking through Europe and I first came here 12 years ago. The startup ecosystem is very small, but it’s very close to the biggest European hubs like London, and well-connected to non-European hubs like New York, too. You can ride your bike to get to almost anywhere in the city within half an hour. And at the same time, you’re in touch with people that are changing the world. There’s a lot of incredible talent: designers, developers, finance people.”
“Barcelona is a small city, but at the same time, it’s the capital of the world.”
As for how the Barcelona tech scene has changed in the past few years, Thiago has only positive remarks.
“The VC world is getting very professional in recent years, and the tech scene has become much more mature. A few years ago you would have had to do everything yourself. Now you can deliver much better and faster services and products through partnerships. You can find people that are the best at that specific thing. You combine the best of everyone and deliver a product much faster. And there’s much more competition now, but that’s always better than being alone. So it’s definitely a good place to be for a startup.”