We’ve changed our name. The BAM ALLIANCE has become Buckingham Strategic Partners. Find out more

BAM Intelligence

Level: Can A Budgeting App Change The Way We Bank?

“Level is dedicated to rewriting the financial rulebook to create a secure future for the next generation.” That’s budgeting app Level Money’s stated mission, which can be found on their website’s “About Us” page. But even as lofty as that objective sounds, co-founder and CEO Jake Fuentes says the company’s sights are set even higher.

“Basic everyday money management,” he suggests, could be “the first step toward changing—or creating—the next generation’s banking structure.”

An app that hopes to change the way the next generation banks? I’m listening.

Jake wants to relegate money to a place where it’s “not the center of our lives.” And although Level Money seems targeted to the younger generations, he refers to this place as something we can “go back” to.

Indeed, we often romanticize previous time periods and generations as the intervening years grow. But it’s hard to argue that Generation X and the baby boomers aren’t more obsessed with money than their predecessors. Gen Y and Millennials, on the other hand, seem less so.

So, with all this generational talk, is Level Money only accessible to the younger set? “We think that we’re most applicable to Gen Y,” says Fuentes, primarily because Gen Y is less likely to already have adopted a cash flow methodology. “But the fact is that we help people spend less than they make, and that’s a universal concept.”

According to Fuentes, “There’s a gulf between the way that financial institutions communicate”—through accounts, transactions and interest rates—“and the way that humans understand their money.”

So, how exactly do humans understand their money? Well, we used to simply open our wallets and see how much cash we had to spend. Today, most of the real estate in our billfolds is ironically dedicated to various plastic cards, which are attached to numerous electronic accounts. Cash is now more of an adornment than the primary way we transact.

Level wants to bring the old-school wallet back, packaged in the form of a highly sophisticated but elegantly simple app. Its central feature, the “Spendable” page, estimates how much you have left to spend today, this week and this month. The Spendable number is generated initially by populating three inputs: our monthly Income, recurring Bills and the desired AutoSave amount we choose to set aside. The balance is our Spendable cash flow.

Where many budgeting apps fail is in making the barriers to entry too high. They force you to use their preferred credit card and/or bank accounts. Or they require significant time to track down your bills and create endless categories.

The only barrier imposed by Level is a requirement to enter the online banking information for your already established accounts. Once you’ve done so, the app aggregates transactions from all of your financial accounts and automatically calculates which are recurring bills versus discretionary spending. Then, instead of forcing you to categorize each transaction, the program simply focuses on how much you have left to spend over those three intuitive periods—today, this week and this month.

“The overall goal is to push money management to the background,” says Fuentes. “The idea isn’t to have people spending a lot of time in the app itself, but to get all the information they need quickly and move on.”

Just open up your “wallet,” make an informed decision and continue on with your life.

Level Money was birthed in part to solve a simple, but prolific, problem. And it’s one to which no demographic is immune. Fuentes had just finished enjoying a good meal with great friends. Then, as the server neared the table with the check, his stomach turned. Did he have enough in the account attached to his debit card to cover it? After a $25 overdraft fee, he learned the hard way that he didn’t.

Fuentes will likely not suffer that fate again, and not just because he uses Level. In early 2015, Capital One announced it had purchased Level Money. Fuentes stayed on with the new venture, but I couldn’t help but ask if joining one of the most recognizable names in finance was in alignment with all this missional, change-the-way-people-bank dialogue.

Fuentes chuckled at the apparent irony, but he assured me that this was a natural and beneficial step in the evolution of his company. And I can buy that; after all, his parent company’s Capital One 360 offering (formerly ING Orange Savings Direct) is often recommended by financial advisors and media observers as a forward-thinking product.

Fuentes assures me that the app will remain free, and also free from proprietary restrictions that might force consumers to use a Capital One account to access it. “We have no plans to make a Capital One account a requirement.”

So what’s next for Jake? “Creating a next generation banking experience is a life’s work,” he says

Let’s hope it doesn’t take that long.

This commentary originally appeared May 22 on Forbes.com

By clicking on any of the links above, you acknowledge that they are solely for your convenience, and do not necessarily imply any affiliations, sponsorships, endorsements or representations whatsoever by us regarding third-party Web sites. We are not responsible for the content, availability or privacy policies of these sites, and shall not be responsible or liable for any information, opinions, advice, products or services available on or through them.

The opinions expressed by featured authors are their own and may not accurately reflect those of the BAM ALLIANCE. This article is for general information only and is not intended to serve as specific financial, accounting or tax advice.

© 2015, The BAM ALLIANCE

Share Button


As director of advisor development at The BAM ALLIANCE, Tim designs and implements focused educational programs for our advisors around the country. His goal is to prepare them to provide an outstanding experience to each and every client through skillful investment advising and financial life planning.

A central theme drives Tim’s work: Personal finance is more personal than it is finance. Regardless of our income or net worth, Tim believes it is our underlying values and goals that drive our behavior with money, which ultimately determines our satisfaction in work and life. With a passion for relational communication, Tim has been featured on the Today show on NBC, CNBC and ABC’s Nightline, on NPR programs The Diane Rehm Show and Marketplace as well as in The Wall Street Journal, The Washington Post, The New York Times, The Baltimore Sun, Kiplinger’s Personal Finance, U.S. News & World Report and Money magazine, among others.

You can follow Tim on Twitter at @TimMaurer.

Industry Events

No events scheduled at this time.