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Broke millennials may want to check out this app

Level Money app
Source: iTunes

Millennials tend to get a bad rap for making poor financial decisions. Whether its living paycheck to paycheck, burying themselves in credit card debt or not saving for retirement, there's not a lot of positive press out there when it comes to Gen Yers and their finances.

But maybe millennials make bad financial decisions because budgeting—as we know it today—isn't practical in the digital era. (I mean, who actually balances a checkbook? Or writes checks, for that matter?)

"We think the budget is dead," said Jake Fuentes, the 27-year-old CEO of a start-up called Level. "For the majority of this generation, money management consists of checking a receipt as it comes out of a machine."

(Read more: A record 21.6 million millennials live with Mom and Dad)

Millennials, those born roughly between 1977 and the early 2000s, aren't like previous generations because they don't deal with physical money as often, they swipe cards and put them back in their wallet. So the concept of how much money they have to spend is hard for them to gauge, said Fuentes, who was formerly the chief of staff for emerging products at Visa.

Millennials wary of investing

So Fuentes—along with his co-founder Frank Yeary, who has more than 30 years of experience in finance at banks—built an app that aims to help the millennial get a better idea of where their finances stand. The app is called Level Money and is described as a money meter that can give the user a read on their financial health at a glance.

(Read more: Gen Y managers perceived as entitled, need polish)

"What we've created is an app that basically takes a radically simple approach, a mobile approach, to that problem. It's basically opening up your digital wallet and seeing how much you have left," Fuentes said.

The app, which launched Thursday with $5 million in funding led by Kleiner Perkins, is aimed at the age group of 18- to 35-year-olds and is available for free on Apple's App Store, although it will soon be available on Android devices, Fuentes said.

While Level Money is by no means the first personal finance app (Mint has been around for six years), its simple interface and real-time updates make it easier and more useful than a lot of the competition, Yeary said.

Here's how it works: Users link their bank accounts to the app, which is done via Intuit's platform, and the app uses recurring deposit and debit information to calculate how much the user can spend on a daily, weekly and monthly basis. When a user spends money, the app changes the amount the user has left to spend in real time.

And since millennials will pretty much only pay attention to pictures these days, the app displays the person's finances using bubble diagrams that clearly depict how much or how little is left to spend. So with just one look, someone can tell whether they are in the red or the black, Yeary said.

By CNBC's Cadie Thompson. Follow her on Twitter @CadieThompson.