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False Eyelashes And Succumbing To Influence

by Danielle Flynn, Castlight Marketing Manager

More than one in five 25-35 year olds spend more than 60% of their income on the very day it enters their account and 3% of these millennials even find themselves in the red by the end of payday, according to a survey by KPMG and reported in insider.co.uk. KPMG’s survey went on to show that the 42% listed unsecured loans and credit card payments as a significant payday outgoing.

Another article, by Shawn M Carter published on the US site CNBC, examined social media’s impact on American spending habits and found that 90% of millennial respondents say social media creates a tendency to compare their own wealth or lifestyle with those of their peers. And that 57% of the millennials surveyed reported feeling “inadequate” about their own life and then went on to part with money they hadn’t planned to spend.

With big brands investing increasingly bigger chunks of their marketing budget on “influencers”, across various social media platforms, millennials are being bombarded not only with images of their peers’ holidays, handbags and harissa chicken but also a stream of images of social media influencers living the dream.

Top influencer Huda Kattan is a make-up artist and beauty blogger with 24.3 million followers on Instagram and 2.2 million subscribers on YouTube. And when Kim Kardashian wore Kattan’s branded false eyelashes, so did thousands of her followers. Kattan’s currency soared and her spot at the top of the influencers’ charts confirmed.

As a millennial, it’s clear that we are exposed in subtle ways to the influencers’ machine and to a relentless pressure to spend. There’s also a sense that spending beyond one’s means has perhaps become normalised, in a way which it wasn’t in previous generations.

At Castlight Financial we are known for our Affordability Passport which uses open banking to look at a customer’s bank transactions, categorise them into 155 categories of spending and 29 categories of income and provide a definitive analysis of exactly how much a person can afford to borrow and repay. The Affordability Passport is primarily used for people looking to secure a mortgage or a loan and can allow brokers and lenders to provide a report and an answer in under 10 minutes. However, the powerful categorisation technology that powers the Affordability Passport, can also be used to help people improve their money management skills – or Financial IQ.

Our data scientists are currently fine-tuning our software so that millennials, and other generations too, will soon be able to run their transactions through our software, see exactly where they are spending their money and whether they demonstrate a high or low Financial IQ. And if it’s a low Financial IQ, what they can do to improve it.

Watch this space as I believe that, before we know it, social media influencers are going to have a lot less influence. As we all take on board the tools that will help us increase our Financial IQ, we will be more aware of what we are spending and why. We will be able to take back control of our bank accounts and stay safely in the black way beyond payday.

Just because Kim Kardashian wore Huda Kattan’s lashes that doesn’t mean we all have to!

Too Much Month Left at the End of the Money

A recent thread on Mumsnet exploded after someone posted “After all expenses we are left with about £1k in our account. My husband is flapping saying its not enough of a buffer … my argument is, we are lucky to have that much and we shouldn’t waste time fretting … Am I wrong not to worry?Read more

The Affordability Passport and Babies are Powerful Disrupters

Life will never be the same after a baby. I knew that. I expected that. And when Brodie arrived on the scene 10 weeks ago, I was prepared for things not being the same. Read more

Student Budgeting Apps Are Good But Don’t Come Close To The Affordability Passport

A whole new generation of students are about to leave home and embark on the adventure that is student life. For some, it will be the first time that they have had to manage their own budgets. And for many, they are watching, with a degree of alarm, the doors of the Bank of Mum and Dad (BOMAD) sliding shut.

But as BOMAD shuts up shop, the High Street banks are bombarding students with rail cards, Amazon Prime membership and restaurant vouchers.

But for this generation of students, there’s also the whole new world of challenger, digital banks, with a complex array of enticements aimed at students.

Digital Banks Are Changing The Game

Jessica Murray, writing on the Save the Student website, reviews the functionality and deals of the leading challenger banks such a Monzo, Starling and Atom as well as the range of budgeting apps and savings bots for managing and monitoring expenditure. There’s kWh for keeping the lid on energy consumption, mySupermarket and CheckoutSmart for driving food shopping costs down and Onanvo Extend for reducing data costs. There’s even the musicMagpie app for generating cash by recycling and selling on games and old CDs and DVDs.

And for any student who has a niggle that they’re spending too much on coffee, diet Coke or beer, they can scare themselves silly with Martin Lewis’s Demotivator. Punch in your non-essential item of expenditure, the unit costs and how often you buy it and Martin’s demotivator calculates how much that adds up to each year and across a working life.

If it’s a caffeine habit you have for example, then the demotivator is quick to flag up that just one medium sized Americano from Costa on the way to lectures and a couple over the weekend will cost a student £803 a year and £36,135.00 over their lifetime.

Students are smart and, with budgets under pressure, they are highly motivated to use all the resources out there to keep their finances on track. And many students will have their smartphones loaded up with a range of apps to help them manage their budget.

Its good news that students are using the array of financial management apps at their disposal and bodes well for future financial responsibility.

Are Students Missing A Trick?

But I wonder if they know, as they download scores of cool apps onto their phones, that the millennials and their parents’ generation too, may be one step ahead of them?

You could say that Castlight Financial’s Affordability Passport is, in essence, a whole lot of these cool apps all rolled into one. The Affordability Passport uses the same open banking technology as the digital banks and some of the budgeting apps, but instead of totaling up the numbers in a defined area of spending such as utilities bills, the Affordability Passport is able to categorise transactional spending across multiple personal accounts, categorising spending into 155 categories and a further 29 categories for income.

The Affordability Passport is powered by Castlight’s CaaS (Categorisation as a Service) software which is currently the most powerful categorisation engine in the UK. And now that it’s being widely used by the UK’s High Street banks, there are hundreds of thousands of UK customers who should feel pretty smug that, whatever numbers their student children may be crunching with their budgeting apps, its not nearly as cool as 155 categories of spending analysis.

No One Is Average

By Martin Hagerty, Chairman, Castlight Financial

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How to Halt Customer Leakage in its Tracks

By Martin Hagerty, Chairman Castlight Financial

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Financial inclusion in sight for UK’s renters

We have been following the journey of Lord Bird’s Creditworthiness Assessment Bill through the parliamentary process and I was very thrilled to see it progress through the committee stage at the end of last week, with widespread support and no amendments. Read more

Embracing the Spirit of the Law

Martin Hagerty, Castlight Financial’s Chairman, once defined company culture to me as “the things people do when they know they’re not being watched”.

I like that definition. Because it doesn’t just apply to companies. It applies to whole industries too. Read more

First Open Banking pilot goes live for Castlight Financial’s Affordability Passport

Castlight Financial, the Glasgow-based financial capability company, is partnering with Paradigm Mortgage Services and Foundation Home Loans to launch a major pilot of its Affordability Passport, an affordability tool powered by open banking technology, which allows brokers to process mortgages in under 10 minutes. Read more

Redemptive Technology

I wrote recently about the sea change in perspective in the lending landscape. The FCA is urging lenders to be more forward looking, to anticipate how borrowers will be able to repay their debt further down the line. Will they be able to weather a storm or will they go under? Read more