Jan02

SmartyPig – Simple Savings for Everyday Life

ss-smartypig

These days it’s not uncommon for Americans to have thousands of dollars in credit card debt and no savings account to speak of. The thought of saving money often gets pushed aside in favor of instant gratification. Frustrated by this trend, the founders of a new web service called SmartyPig aim to put the fun back into saving money.

If you do some basic Googling you will find quite a few internet-only or direct banking services which provide great savings rates and SmartyPig can certainly be added to this list. However, what makes SmartyPig unique is the manner in which you actually save your money. SmartyPig’s web application lets users create an unlimited number of savings goals (think of these as individual accounts). Upon selecting a goal amount and a funding plan, SmartyPig displays slick graphs depicting how long it will take to complete the goal.

Even more exciting is the ability to share and communicate your savings goals via popular social networks such as Facebook and MySpace, or even communicate via email so your friends and family can view your progress and contribute to the cause using their credit card. When you reach your savings goal, SmartyPig offers a variety of options for using your money including buying items through its partner retailers to achieve a bonus of up to 5% (on top of any interest earned).

Practical Uses:

Create a savings goal for your child’s college fund and encourage family members to contribute using their own credit cards
Save for a new computer and post your progress on your Facebook page
Defer charging $2500 for a new drum set and instead create a savings goal on SmartyPig
Use SmartyPig as an educational tool for your children by showing them how long it will take to save for their goal and discussing ways to earn additional money

Insider Tips:

Don’t close your local bank account, you’ll want to be able to deposit cash & checks locally and wire these funds to SmartyPig using an ACH transfer
If you don’t have any specific goals in mind but just want to save money, create a generic goal and call it something like “Future Purchases”
Before withdrawing any funds, be sure to consider using one of SmartyPig’s partner retailers to get bonus incentives up to 5%

What we liked:

The entire application is casual and fun – the antitheses of your typical banking experience
We appreciated being able to create an unlimited amount of savings goals
The ability to earn above and beyond interest by purchasing products through partner retailers
Promoting savings goals via MySpace, Facebook, email, and our own websites
Multiple options for gaining access to saved funds including ACH transfers, debit card, and gift cards

What we didn’t like:

There is a minimum savings goal of $250
ACH deposits are held in limbo for 3 business days – typically most banks receive these funds much sooner
Funds held by SmartyPig reside under the control of West Bank, a very small bank out of Iowa – while these deposits are FDIC insured, it’s slightly uncomfortable working with an unfamiliar banking entity

Alternatives: