Though Australians are known around the world for their love of travel, it seems we are also a nation of workaholics, with one in two Australian workers not taking the annual leave they are entitled to – we have more than 118 million days of annual leave stockpiled.
To ensure Australians take up their leave and save up enough to make the most of it is fintech startup My Four Weeks, which has dubbed its service as ‘like superannuation for your holidays’. It works by having an employer automatically allocate a portion of an employee’s wages to My Four Weeks on their behalf, so that when their annual leave comes around the money is there tucked away to help pay for it, no need to get out the credit card.
Founder Jamie Hyndman explained the startup wants to both help get consumers out of the credit card cycle and have them actually use up their banked annual leave. Previously a financial planner, he said the idea came from years spent helping people refinance credit card debt, while also seeing the toll constant work can take.
“My financial planning was also processing a lot of insurance applications, and in these I was identifying high rates of accrued annual leave and a considerable number of people being identified as having or had previous mental health problems such as depression and anxiety,” he said.
“In today’s 24 hour work life, it’s important people take a break they quite often desperately need to stay mentally healthy. We’re also helping employers manage their annual leave liabilities by encouraging sustainable annual leave while at the same time providing another employee benefit.”
Paired with his own love of travel, the idea for My Four Weeks began to take shape. The final push, Hyndman said, came as he and his wife wondered how to fund a particularly busy period of travel for weddings and events.
After raising seed funding from two sources, Hyndman worked with creative agency CHEProximity to develop the platform. The build was eye opening, he said, however the bigger challenge was getting the product compliant. Even with his background in the financial services industry, Hundman said the process of ensuring My Four Weeks complies with current legislation has been “full on”.
The platform is quite simple to navigate: once a user signs up, they receive instructions to pass onto their employer. These include how much they have nominated they want to set aside in each pay slip, as well as where and how the employer can make the contributions. From there, the user keeps saving until they decide to withdraw.
The service costs $20 a month, a fee Hyndman believes is affordable to users while helping the startup cover costs.
“In our market research, it was a cost that users were comfortable paying to get their funds ‘out of their hands’ until they need it. In the future, we fully expect users will find themselves well ahead in terms of getting back more than they are shelling out. In the end, we want to take this product to a point where it would almost be financially irresponsible for them not to be a part of,” he said.
Unlike a regular savings account, a My Four Weeks balance does not accumulate interest. Rather, the startup is looking to provide users with travel-related deals and offers to help enhance their holiday.
“We’re offering cash rewards as opposed to accumulating interest because, at the end of the day, the amount you get from interest just isn’t worth it,” Hyndman said.
He explained, “If you saved $3,000 from scratch across 12 months and assuming you were to get a 2.5 percent interest on those savings, you will have earned $34.61 in interest. We see more value in using interest across the entire portfolio to help fund the offers from strategic partners. If one partner can deliver up to $200 cash back, we would love to see a portfolio of 20 partners delivering up to $2,000 back depending on the user choosing to take up the offers.”
According to Hyndman, the flat fee structure and rewards system also means that, as a business, My Four Weeks will not be motivated by how much users are saving, and will instead be focused on providing them with the best possible experience.
Identifying 25 to 40 year olds as the startup’s target market, Hyndman said credit cards are its biggest nemesis. The banks make them appealing, but in the end, he said, a customer is still taking up bad debt. Educating the market about this and showing them the alternatives is crucial.
My Four Weeks will also look to reach its target audience at an employer level. Hyndman said the startup has seen greater interest than originally expected from employers it’s met with, with a number keen for a product to help them manage their employees’ annual leave.
Over the next few months, the startup is focused on developing partnerships to help deliver value back to members and building up its user base.
Hyndman said, “We’re taking the approach of focusing on a really strong user experience, even if that comes at the expense of features. We believe that if we get the user experience right, then our members will have the patience to allow us to develop our features as opposed to rushing them and mucking them up.”
Image: Jamie Hyndman. Source: Supplied.