In January 2016 I founded a tech start-up help Americans make better financial decisions. I’ve since learned that most people are stressed out because they save little, have enormous debt, don’t know where their money goes and feel they’re not on track to meeting their long-term goals. I also found that the reasons for this are so deeply embedded in the political, economic, educational, behavioral and social fabric of our country; that our start-up, and perhaps any private-sector business, is unlikely to move the needle. I fear that, absent significant increases government education, regulation and stronger social safety net, we will see millennials eventually become a generation of seniors living in poverty.

My original idea was an app to help new home shoppers decide how much they could afford to spend on their home. My own experience was that banks were willing to lend me much more than I was comfortable with. So, I created a prototype that calculated a maximum recommended purchase price that still allowed the user to save ten percent of their income, after paying debt service. In testing, feedback was favorable, but users said they actually would prefer a more holistic tool that would 1) help them save for retirement; 2) guide them in budgeting and 3) invest well, along with a long list of other financial decisions.

So I gathered a small team and built a holistic life cycle model in Excel and web-app that helps people with life planning, saving and budgeting at scale and low cost. In our user testing of many prototypes, we learned that people in general are:

  • Much more concerned with the present than the future and so resist setting spending limits, in part because they don’t empathize with their future selves
  • Loath to make any investment that could lose money or set aside money for savings at the start of the budgeting process
  • Too distracted by the overwhelming stresses, distractions and noise of daily, modern life to focus on planning and making important life decisions
  • Mistrustful of financial institutions, financial technology firms and prior generations that brought them the financial crisis, climate change and a polarized, low-trust society

As a result, we found it very challenging and expensive to attract individuals to our web-application and complete the program. People seem to need external support and incentives. So, we pivoted to offering the tool and financial wellness workshops to businesses as an employee benefit. We reasoned that employers, even if they didn’t think themselves morally obligated to support their employees’ financial wellness, would do so based on enlightened self-interest. After all, if employees are stressed out and distracted by personal finances, they may be less engaged, less productive, less loyal, consume more health care and maybe even steal more pencils.

Read the rest of Brett Whysel’s article at Forbes