Penny Finance, an AgeTech Collaborative™ startup participant, is a personalized and tech-powered financial mentor that provides real-world knowledge to women who don’t have access to a financial advisor. Through tailor-made money plans, instant insights and digestible financial education, Penny Finance offers individualized money advice to help women increase cash flow today, and retire with wealth tomorrow.
We sat down with Crissi Cole, founder and CEO, to talk about Penny Finance’s mission of empowering women to make sound financial decisions, build wealth and become retirement ready.
This interview has been edited for clarity and length.
Please tell us about Penny Finance.
We’re an online financial planning platform for women, helping them get out of debt, get into investing and become retirement ready. We have a focus on the AgeTech space because 81% of women are caregivers for parents or older adults; we support those women who have the financial burden of everything related to caregiving and aging.
Why else are you focusing on helping women in particular?
The reason I created this company is because we have a retirement crisis: Women are retiring with half the wealth as men. My own grandmother worked until the day she died at 75 years old, and my mom will be working until the day she dies. That doesn’t make any sense! So my goal is to close that wealth gap.
Why are women retiring with half the wealth as men?
Women have a disproportionate amount of debt, including two-thirds of student loan debt, because we’ve been getting more degrees. Since the 1980s, we were told, “Go get a great degree and a great job, and you’ll have financial freedom.” But when you have debt such as student loans hanging over your head, you might get into investing or funding your retirement much later. And we all know that with investing, the power of time is everything. So we need to get the younger generation investing earlier as well as solve this wealth gap for the older generation.
Your product is called Penny. How does it work?
Penny is an online tool that simulates sitting down with a financial advisor and creating a custom financial plan. There’s no human — it’s all proprietary technology — but you still get a comprehensive plan that addresses everything from everyday essentials to debt, investing and having a family.
We wanted to give people insights into the specific steps they need to take regarding their money. Penny can tell them, “OK, you need to put this amount into a high-yield savings account, pay this amount on your debt, put this much in retirement and set up a 529 account for your kid’s college.” Our goal is to demystify finances without people needing an army of financial advisors.
Once people get their plan in place, how often do they check in with Penny?
Our members usually use Penny every week to look at their numbers, because those numbers change: You might earn different amounts, spend different amounts or have a big life event. We link to members’ bank accounts and send them insights every Monday. That also allows us to tell them things like, “We see you got a new car loan; here’s how that changes the rest of your plan.” We want to be their virtual advisor from when they’re 22 years old all the way to 85, 90 and beyond.
Our approach is women-centric for several reasons. First, everything is goals based. We don’t talk about what your life looks like now, we talk about what your life will look like in the future because many women like to think about the big picture and how all the pieces connect. Second, we focus on low-risk investing because more than 80% of women feel anxiety around money, and many tend to have a lower risk tolerance than men. Third, we have a family vertical that focuses on our members’ kids and parents, because women are often the caregivers in those situations, and they’re not focused only on solving problems for themselves.
What is an obstacle that you’ve had to navigate while growing the company?
We’re focused on a demographic of everyday people who don’t have enough wealth to get a financial advisor — people who might save only a few hundred dollars a month. So our biggest challenge today is not the tech, it’s monetization and our go-to-market strategy: How can we get this product out to women who may not be able to afford it? One way we’re solving for this is by selling into financial institutions that want to pay for this product for their customers.
What has your experience been as a member of the AgeTech Collaborative™?
Our product was originally focused on millennials, and the Collaborative has been extremely helpful in helping us extend it to the 50-plus population. Older adults are a completely different demographic, and the Collaborative really helped us think that through from a content standpoint and a distribution standpoint.
Do you see a generational difference, when it comes to preparing for retirement?
People tend to think that the retirement crisis is only affecting older adults, but in our data, we actually see just the opposite: Older Americans have saved more and invested more for retirement than younger generations. Our job is to make sure that all Americans are ready for retirement, so we need to focus on this next generation. What’s prohibiting them from making healthy financial decisions? How can we help them so they don’t get into the same position that my grandmother and mother got into? We think we can help answer and solve for those kinds of questions.
Learn more about Penny Finance at their website.
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