9 apps to make you even smarter with money

These web sites use lessons from behavioral finance to help you invest, meet your goals, and even reduce your power bills.

When it comes to money, the best of intentions are often no match for biases, irrationalities and bad habits that can lead to buying too much, buying too high or selling too low.
To help investors fight bad financial habits, companies are layering insights from behavioral finance — the study of how psychology affects economic decisions — into smartphone apps and online investing sites. They’re consulting with academic economists and psychologists, while also using rigorous testing and creative design to make sure their ideas work in the real world.
Here’s a look at these start-ups’ attempts to alert, nudge and, well, manipulate people into becoming better savers, spenders and investors.

StickK
The website StickK, co-founded by two Yale University professors, is designed for those times when willpower isn’t enough to achieve your goals. You might commit on the site to repaying credit card debt, keeping track of your spending or saving money by bringing your lunch to work. To add more motivation, you can put money on the line. If you fail, it goes to charity. For even more motivation, you can commit to having it sent to a political organization you hate. You also can choose a “referee” – say, a co-worker who knows your lunch habits – to make the final determination and keep you honest. With both money on the line and a referee, StickK.com users achieve three-quarters of their goals, chief executive Jordan Goldberg said.

Opower
What lowers energy usage? Behavioral research shows appeals to citizenship, protecting the environment and even promises of cost savings fall flat. Peer pressure, however, works. Opower is a company that uses that insight to re-design electric bills. A typical Opower bill might point out you’re using 10 percent more energy than your neighbors, and offer suggestions for how to lower that. Now serving more than 90 utilities around the world, Opower says its personalized messages lower overall energy use 1% to 3.5%.

Level Money
The app Level Money provides a constantly updated view of how much spendable cash you have, after taking into account your savings goals and ongoing bills. While this can help you think twice before making unaffordable impulse buys, it can also give you permission to live a little. Those who are otherwise meeting their financial goals “don’t have to feel guilty” treating themselves to an expensive dinner, said Level’s vice president of design, Robert Suarez.

Lift
“Did you call the cable company yet?” That’s not your spouse or your inner-nag bugging you. That’s a notification on your phone from the app Lift. It’s based on the idea that committing to a firm goal — in this case, a 10-step plan to “Save Money: Get Rid of Cable” — is more effective than vaguely berating yourself every day.
Users can sign up for dozens of plans, from an 11-step plan to “stop being a workaholic” or an 11-step plan for “how to live a Spartan life” to non-financial goals like flossing, dieting and exercise. Users can create their own plans and cheer each other on. “It’s a more efficient form of coaching,” co-founder Tony Stubblebine said.

Check
The water bill’s due, says the alert from the app Check. In fact, it was due three days ago and you ignored earlier alerts. But the app tried you again now because it could see that your paycheck just cleared. By analyzing the behavior of the 10 million users who aggregate credit card, bank, loans and other accounts with them, Check finds that, even if there’s money in their accounts, “a lot of consumers choose to wait to pay the bill until they get paid,” vice president of marketing Daniel Kjellen said.

Mint.com
Most people don’t particularly like hearing they’re deviants straying from social norms. Mint.com, the online personal finance site, frequently deploys such “social proof” — as the behavioral economists call the concept. The site might let you know you’re paying 167 percent more for auto insurance than people like you typically do, Mint.com’s Vince Maniago said. Or, it might point out that if you ate out two fewer times a week — bringing your restaurant visits in line with the average in your area — you could save as much as $1,000 in six months.

Wallet.Al
The future of financial apps may be in artificial intelligence. Not robots who follow you around and control your spending, but advanced computers that track and analyze the transactions you make throughout your day and make recommendations in real time. It might point out your tendency to over-spend in certain restaurants or stores, or notice that your new, pricier yoga studio is derailing your dream of a vacation in Bali. Omar Green, founder of Wallet.AI, a startup developing such a tool, said the goal is an app that makes thousands of calculations about your financial life –— “more math than any person would want to do.” The result, he said, should insulate you from temptation by keeping your eyes on long-term goals. As long as your phone battery lasts, anyway.

LearnVest
Online financial adviser LearnVest often calls itself the “Weight Watchers for personal finance.” One thing the startup borrows from the weight loss program is an emphasis on the boost that comes with small achievements, especially early in the process. While Weight Watchers might instruct members to clean out their refrigerator, LearnVest sometimes advises new clients to clean the unnecessary cards and old receipts out of their wallets. Achieving these “bite-sized financial to-dos” provides an important sense of accomplishment, founder Alexa von Tobel said.

Betterment
When the stock market drops, some investors might need reassuring from their advisers, and others might be better left alone. Online investment manager Betterment tries to distinguish between the two. If your past behavior suggests you’re prone to panicking and doing something stupid during market corrections, the startup sends you reassuring messages. But if you’re a calmer and less engaged investor, you won’t be contacted. “By actually bringing this to your attention,” said Dan Egan, Betterment’s director of investing and behavioral finance, “we might be the ones stressing you out.”

(Bloomberg News)