Pluto Money App: Money Management for Generation Z

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Editor’s Note 1/14/2021: The Pluto Money app seems to have been shut down. I have reached out to the founders to see if they can provide any details, and will update the article if/when I hear back from them. In the meantime, I will keep this review live in the event that the app is ever restarted. 

Continuously updated to reflect new app features, fixes, and developments.

In the past five years, we’ve seen an explosion in the number of Fintech startups launching with a mission to make it easier for the average person to get a handle on their finances. The vast majority of these companies and apps, though, have been designed specifically for the unique needs and wants of the Millennial generation.

Pluto is different, in that it is a money management app specifically designed for Generation Z—today’s high school seniors, college students, and recent college grads.

Below, we take a closer look at what Pluto is, how it works, and how you can use the app to become better at managing your money and finances.

Key Facts

• Pluto was launched in 2017 by Tim Yu, Susie Kim, and Dante Monaldo.
• Since then, thousands of college students and graduates from more than 1,500 college campuses have used Pluto to get a handle on their money.
• Pluto is completely free to use.
• Banking is handled by NBKC Bank.
• Currently, Pluto is only available for iOS, though an Android version is in the works.
• Pluto Safe, an FDIC-insured account for users, is expected to launch by Fall of 2019, and Pluto Checking with debit card is expected to launch in 2020.

What is the Pluto money app?

Pluto is a money management app that was created specifically to appeal to Generation Z (though it is also used by others) and to help members of that generation identify and reach their money goals.

Using behavioral science and data analysis, the app was built to guide users towards their financial goals—first by helping them identify these goals, and then by suggesting spending challenges to help the user reach those goals. Challenges are tailored by the users’ unique spending habits to ensure that they are relevant and actionable, and are typically designed to either help a user cut their spending or actively save more money.

How does it work?

Opening a Pluto account is easy. Just download the app by visiting their website or iTunes store (an Android version of the app has not yet launched). Then, you’ll need to answer the questions below in order to complete your profile and start using the app:

• What college do you attend? (If you are a college student)
• When is your expected graduation date?
• What is one savings goal that you have that you would like to work towards?

After selecting your savings goal, you will be asked to name the goal, choose a targeted amount (i.e., how much money you need to save to reach that goal), and choose a deadline (when you want to reach that goal).

You will then link your bank account or accounts to the app, which will allow Pluto to analyze your spending habits based off of your transaction history, which happens within seconds of linking your account. Using this data and insights, Pluto will suggest specific challenges that you can complete to work towards your savings goal.

Pluto Goals

When first creating your Pluto account, you will be prompted to select at least one financial goal to work towards. Currently, these are split into three different categories, which are based on some of the most common financial goals that members of Generation Z tend to be concerned about:

• Bucketlist: Taking a trip, going to an event like a concert or a show, etc.
• Adulting: Pay off debt, build an emergency fund, save up for a down payment on a home, etc.
• Wish List: Buy something that you really want

If you have a particular financial goal that you would like to work towards, but don’t see it on the list, don’t worry—you also have an option to create your own.

You can then work towards these goals by completing challenges (below) or by manually transferring money into your Pluto account as you see fit.

Spending Challenges

Pluto suggests challenges to users based on their own unique spending habits, transaction history, and savings goals. Some examples might include:

• Generally spending less money on coffee, eating out, or shopping
• Spending less money at specific restaurants or merchants that Pluto sees you regularly frequent (For me, that would be Starbucks)

These challenges were designed to feel like completing levels of a game. Why? By gamifying the saving process and breaking down a larger goal into more bite-sized pieces, the theory goes, it will be easier for you to stick with them in the long run.

When a challenge is recommended to you, you can:

• Choose whether or not you want to work towards it
• Decide whether to make the challenge a weekly or monthly one
• Decide whether the money you “save” by completing the challenge will be moved into you goal account automatically (recommended) or whether you will do it manually

In addition to prompting you to complete specific challenges, the app will also provide motivational nudges and messages that are designed specifically to keep you motivated and on track towards reaching your goal. As anyone who has pursued a long-term financial goal can attest, staying motivated is key to finishing what you’ve started.

Smart Alerts

If you want, you can also turn on Smart Alerts. If you do, Pluto will notify you any time you have hit a goal, made progress towards a challenge, or made a transaction. These alerts are designed to help you stay on track, and can be particularly helpful in becoming more mindful of your spending habits.

Pluto Insights

In order to help users better understand their own spending habits, as well as how their financial status compares to their peers, Pluto offers users financial insights:

• Personal insights use your personal transaction data to paint a picture of your spending habits, for example, by showing you what category you have spent the most money on over a given period of time (like dining out). Using these insights, you can change your spending habits.
• Peer insights are designed to show you how you compare to others like you, and are based on factors such as your age, your gender, what school you attend and when you plan to graduate, your annual income, and your relationship status. These insights might, for example, tell you spend more, less than, or roughly the same on different categories as your peers.

Pluto Fees

Currently, Pluto is completely free to use. Users pay absolutely nothing to use the app.

You might be wondering, then, how Pluto makes their money. I spoke with the founder, Tim Yu, who explained that they currently make money by collecting some of the interest that accrues on each Pluto account. In the future, they plan to monetize the app further in a number of ways:

• Collecting interchange fees from merchants when users swipe their debit cards
• Directing users towards deals with partner merchants (similar to how Acorns Found Money works)
• Offering a premium membership option with additional features and services, for a fee

Our Review

As an Android user, I haven’t been able to personally test Pluto for myself, so I can’t speak specifically to how the interface works or what it’s like to use the app directly. That being said, the review below offers a quick summary of the pros and cons of using Pluto that can help you decide whether or not it would be a good addition to your financial strategy.

Pros of Using Pluto

• Free to Use: Pluto is completely free to use, which is something that most financial apps can’t claim. For cash-strapped college students, this is a really big perk.
• Quick to Get Started: Opening an account takes less than 5 minutes and is incredibly simple to do.
• Designed for Generation Z: If you’re a member of Gen Z, or even a younger Millennial, then you’re probably going to love a lot about Pluto, because everything about the app was specifically designed to appeal to you and your financial needs—from the interface to the insights and everything in between.
• Simple Interface: The app is designed to be as simple as possible, making it perfect for those who are just starting out in personal finance.
• Powerful Insights: By analyzing your spending, Pluto can offer valuable insights to help you become more aware of how you spend your money—so that you can change your behavior and reach your goals.
• Small Changes Make a Big Difference: Though the challenges that Pluto gives users might seem small—saving a few bucks here, a few bucks there—they certainly add up. According to founder Tim Yu, the average user save $53 per month per challenge, which adds up to more than $600 a year, or $6,000 in ten years.
• Automatic Saving Helps You Stick With It: Challenges are most effective when they are set to automatically transfer any savings into the user’s Pluto account. Why? Because it removes the temptation for you to use the money for something else. The less you have to think about saving, the more likely you are to follow through.
• Helps You Stay Motivated: Smart Alerts help users stay on track by sharing behavioral nudges, motivational pushes, and general notifications about how you are performing as you reach your goals.

Cons of Using Pluto

• Savings Don’t Earn Interest: Though Pluto is free to use, users currently do not earn interest on any funds held in their Pluto wallets. That being said, there are plans to potentially roll out interest-earning accounts in the future. And if the app gets users to save money, even if they do not earn interest on their funds it can prove valuable.
• Might Be Too Simple: Pluto was specifically designed for those who were new to understanding their personal finances. For this reason, it is extremely simple—by design. More advanced users might not find all of the functionality that they might expect from a money management tool.
• Only Available on iOS: Currently, Pluto is only available on iOS, though there are plans to launch an Android version in the future.

Why Generation Z?

Other popular money apps (think: Acorns, Stash, Robinhood, etc.) have tended to cater towards the specific needs and desires of older users—Millennials and Gen Xers.

They did this in part because, at the time of their respective launches, these generations were coming into their own: They suddenly had money to spend, but were unhappy with the legacy financial options that their parents used. Generation Z was still too young to be a viable market, and was left out of the picture.

But according to Statista, as of 2017, Generation Z was the largest generation in United States history, totaling 90.55 million compared to Millennials’ 72.06 million, Gen X’s 65.45 million, and Baby Boomers’ 72.56 million. Other research indicates that Generation Z already spends $143 billion themselves each year, and influence another $600 billion in spending by others.

This lack of focus on Generation Z was, according to Pluto Founder Tim Yu, one of the primary drivers leading to the launch of the app. As he told me:

“My cofounder Susie Kim and I both struggled with our finances for very different reasons as students at UCLA. I irresponsibly spent all of my summer internship paychecks and even racked up credit card debt, not realizing my mistakes until it was too late. Susie gave up on her dream arts and language study abroad program last minute, because she was and felt so financially unprepared. She had no idea how she was going to afford it and panicked realizing that she didn’t even have a savings account or credit card.

We spoke to hundreds of other students on campus, and quickly realized that so many others were also falling victim to financial inaction and on track to enter the workforce financially unprepared. Some were even financially struggling just to make it through college. Secondary research further validated the financial struggles of students. For example: at that time, 70% of college students were financially stressed, 60% didn’t save money at all, 60% graded themselves C or worse in managing money and they were paying nearly $800 million annually in overdraft fees alone.

We tried a ton of personal finance and banking solutions, and none were built for us and most of our peers. It quickly became clear that none of them were designed to serve college students who were mostly financial novices and part of a different generation (Gen Z) shaped by the Great Recession and student debt crisis.

They focused on serving older millennials in the workforce that had more complex finances and either with more assets or already deep in debt. We immediately saw a huge underserved opportunity in the market. Banks and fintech companies didn’t care that younger consumers were entering the workforce without financial literacy and capability. All they cared about were making a boatload of money off people with more assets or people that had already made huge financial mistakes via debt. We thought, why not prevent young adults from making those financial mistakes in the first place?

It became our mission to bring financial capability to college students and empower them to pursue their dreams by combining behavioral economics, design and financial tech in a way that made sense for them. We wanted to leverage my cognitive science background and Susie’s design and branding chops to make money management approachable for Gen Z students.

Over time, we realized that we had to integrate with banking in order to change financial behaviors in the most effective way. Banking and financial wellness should be combined together in one seamless experience, not separate from each other. And that’s what we’ve been building towards to this day—a mobile banking platform completely centered around financial wellness for Gen Z college students and capable of growing with them beyond graduation.”

The Bottom Line

If you’re new to personal finance and are looking for a tool that can help you track your spending, save more money, and achieve your financial goals, then Pluto might be a great tool to add to your tool belt.Signing up takes just minutes, and the app is completely free to use.