Budgeting for beginners

Hong Kong techpreneurs Teresa Chan and Chester Szeen believe in an early start when it comes to managing money, and have developed an app to do just that.

The business partners founded their fintech start-up, Mellow App Ltd, in July 2018 and launched its first iteration in late March 2019. Targeting the mobile generation, Mellow was developed as an all-in-one personal finance solution helping parents teach their children aged six to 18 the cycle of goal-setting, saving, earning and spending in a habitual, practical and educational way.

Incorporating game-like features to make learning fun, the app allows children to record their income and expenses, such as pocket money and transport fares, and plan their savings goals.

If a child wants to buy a particular item, “they input the price, and the date they hope to purchase,” Mr Szeen explained. The app will calculate how much they have to save every week, and alert them if they are spending too much and the target may not be reached.”

As an interactive element, parents can set tasks for their children in order to earn rewards, and top up their savings for tasks completed.

The app is based on real, not virtual, money. In its beta (early) stage, transactions were cash-based. From mid-August 2019, Mellow App will be connected to a MasterCard debit card, which parents and children may top up either by direct debit, through an automated teller machine (ATM) or the Faster Payment System.

Giving young users direct access to their money – with parental oversight – is the next step in their learning journey. “Parents can freeze the card if they see anything suspicious,” Mr Szeen said.

Ms Chan said: “We think digital money is the future and there’s no way to avoid this trend. It’s best that people learn to deal with it early.”

The app is free at present but Mellow’s business model going forward will involve a monthly subscription. Marketplace referral fees will add to the start-up’s revenue stream. 

“As children add products to their wish lists, like Amazon, we can charge a referral fee from the merchants,” Mr Szeen said. He expects the start-up to break even in 2021.

Mellow itself does not hold the user’s money. “The money handling part is done by a licensed firm,” Mr Szeen said, adding that the app’s robust cybersecurity was developed with input from AngelHub, Hong Kong’s first licensed start-up investment platform.