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The SmartyPig Blog
November 13, 2009 • Posted by Michael FerrariAddicted To Saving
We hear from our smart saving customers all the time. Undoubtedly, many of the calls are questions, complaints or concerns. That’s the nature of the beast. Satisfaction is not shared as much as dissatisfaction in consumer America because the former is expected. We don’t think that should ever change. We need the complaints and concerns and the questions, for sure. And we won’t ever cover our warts. It’s the only way we’ll reach our goal of being the best at what we do.
Still, parents do thank us often for giving them a tool to “finally” teach their kids about money, and looking “cool” doing it. And Twitter, Facebook and the blogosphere are alive with people excited about having goals, striving for goals and reaching goals. Reading it, hearing about it, and communicating with these folks are the best part of what we do. People tell us we’ve helped them back on the right path, helped them get out of the habit of using plastic they can no longer afford, and helped them basically dig out from under. It’s usually a quick pat on the back. It’s what we absolutely live for.
However, when SmartyPig customer Keith Grimes emailed me the other day, I immediately forwarded it to our entire staff with a note that read: “This is what it’s all about.” Then we reached out to Keith and asked if we could put it on our blog in its entirety. He agreed. Here goes:
“I had an interesting reaction to my SmartyPig update this morning. For nearly two years now I’ve had a series of ongoing goals that I’ve eagerly contributed to and watched grow to fruition. Today, when I received my notification about this month’s deposit, I realized that it was time to close out this goal.


The reaction I had to that, however, was one of, ‘Well, what am I going to save for now?’ Since I was closing out my only goal, I suddenly realized that I’ve grown quite fond (addicted?) of saving money and watching it grow in anticipation of the purchase – rather than buying something I couldn’t afford only to have its perceived ‘fun-factor’ diminish steadily and rapidly with every payment and accrual of interest.
In other words, you guys have got me hooked on saving. Wow – great job and great thanks. You have no idea what a big change your site has brought to me and my family.”
Best Regards as always,
Keith
With all the bad news running rampant about the economy, and especially banks, having a customer like Keith confessing to being hooked on making a positive change with regard to how he treats money because of what we do is indeed “what it’s all about.” But we will only ever be successful as a company, and as a country, if people like Keith become the rule again, not the exception. Reversing the “buy now, pay later” mindset, and making smart saving and smart saving less foreign, are the primary sentiments on which we built SmartyPig. Watching the process used to the point that it is life changing provides near indescribable satisfaction. Thanks, Keith. And thanks, too, to everyone who reaches out. We want to hear from all of you.
Mike Ferrari, Co-Founder
@mferrari
mferrari@smartypig.com
Smart Indulgences: How to Splurge Without Consequence
I’m not going to get holier-than-thou. We’ve all bought things that we didn’t plan for – big-ticket items that we just had to have. (Right there! Right now! Gotta have it!)
And while the sticker shock is always tough to digest, the remorse of monthly credit card payments can be even harder. Long after the shine has faded on a new purchase, it’s easy to find yourself still making minimum monthly payments plus 15% interest. “Was it really worth it?” we wonder. It’s enough to take the joy out of splurging.
But it doesn’t have to be so painful – or 15% more costly. Buyer’s remorse can be a thing of the past. With a little forethought and setting money aside these kinds of big expenditures can be easy, fun, and even empowering. You’re buying something outright, with cash that you set aside for just that purpose… How’s that for being responsible and autonomous?
At SmartyPig we want you to break the vicious cycle of credit card debt. We want you to enjoy the empowerment that comes from managing your money, and making big purchases without fear of crushing credit card consequences. And we want you to benefit from that process. While you save for your item at SmartyPig, you’re earning an APY of 2.01%, one of the best rates around. Once you’ve met your goal and are ready for that new item, you’re able to redeem your goal to one of our retail partners including Amazon.com, Best Buy and Overstock.com offering boosts of up to 6% – giving you the most money for your money.
So when a purchase seems overwhelming, sit down and think about how much it costs and how long you want to be paying for it. Then, go ahead and buck the trend. Set your plastic aside. Figure out how much you want to save, when you want to save it by and how much you’re able to save each month. Before you know it, you can be watching the big game on your new flat screen or soaking up the rays next to azure waters. Your indulgences can be guilt free and SmartyPig can make that happen.
The Road Ahead
As the economy continues to hopefully stabilize, it’s critical that we do not fall back on old habits – spend more than we earn, abuse plastic, etc. Researching and reading up on websites and tools for your best options are a ticket to financial success. Following personal finance bloggers helps to establish a strong understanding of your own personal finance interests and needs. Blogs like The Simple Dollar and Wise Bread share insight and tips for creating fiscal fitness. They also let you know that primarily many of us are in the same boat. The times have been scary, yes. And the damage has been fierce. But we at SmartyPig share in the belief that with a renewed interest in saving, and an overall attitude adjustment toward money, there is light at the end of the tunnel.
These experts implore their readers to create a plan and stick to it. SmartyPig was built on this exact way of thinking. We offer a competitive APY, the option to make your goal public so friends and family can help and cash boosts from top retailers to help you get the most money for your money. And from beginning to end the process could not be simpler for people who want to crate a plan and stick to it.
We have even added the latest and greatest in Web 2.0 technology and created partnerships with terrifically innovative companies to help you even more. By using SmartyPig’s Visualizer, you can see how much you’ve saved and your total progress. To contemplate the bigger picture of your finances and how SmartyPig positively affects them, we offer integration with sites like Mint, Thrive and Wesabe.
Your personal finances are a journey. And there is a lot of help available out there to make it a more pleasant one. SmartyPig is just a small part of it. But we feel strongly that if you implement the idea of saving up first, of owning what you have, that getting from here to there will be a lot easier and more rewarding. Good luck with your goals!
A Right Way to Save
Silicon Valley Blogger at Wise Bread recently wrote, “We all have our own ways of handling our finances – and that’s why it’s called ‘personal’ finance. What works for one person may not necessarily work for someone else…” She poses questions about budgeting, about paying yourself first or last, and the debate about paying down debt versus funding an emergency account. Then she gave us this to chew on: “Is there a right way to save?’
If you’re looking to save for something specific, if you have a goal, we think SmartyPig is for you. We don’t want you to stop paying down debt, stop funding your emergency account, or even leave your current bank. But if you want to take a vacation or need a down payment for a new car or have to replace your refrigerator, SmartyPig gives you the most money for your money.
SmartyPig offers one of the most competitive APY’s on the market (2.75%); you can get a boost from top retailers when you’ve reach your goal; your friends and family can help get you there faster; and, to make it as simple as possible, you can set it and forget it. After a while, you won’t even miss the money being automatically deposited into your SmartyPig account. And, most importantly, when you reach your goal, you will own whatever it is you purchase – not your high-interest credit card company.
In the end, deciding to save, creating a goal and sticking to it is one of the best moves you can make for your wallet. It is the “right way” to save. The long-term benefits of saving are obvious, but the habits it will help form are potentially even more valuable. “Do whatever works for you, whatever’s comfortable for you,” Silicon Valley Blogger writes. What’s most important is that no matter which way you choose to start saving, getting started is a huge step forward toward getting you on the road to fiscal fitness. We could not agree more. Click here to get started today!
Can Saving Sink Us?
The savings rate increased dramatically in May to 6.9%, the highest it’s been in more than fifteen years. That sparked a few questions from Paul La Monica at CNN Money, “Do you think consumers are saving too much and hurting the economy?” or “Should people continue to be frugal and save more?”
It’s a slippery slope. Using our homes as ATM machines and living on plastic got us where we are today, no doubt. A few years ago, folks on average were spending $102 of every $100 they made. Now, on average, they’re spending about $93. The old way wasn’t working out. People made a collective change. There is one problem, though. Almost all of those new savers work for or own companies that have been depending on that extra $9. So are we doing more harm than good? Well, positive change can sometimes feel quite negative.
In the article, La Monica writes, “This newfound sense of frugality is undeniably a good thing. If consumers are no longer willing to amass unhealthy piles of debt for things they can’t afford, then we can hopefully avoid such severe recessions.” But there’s more to it than that. We don’t have to abandon the car; we just need to put on the brakes. Saving isn’t just for a rainy day – no matter how long this storm seems to be lasting. The silver lining: you CAN afford the things you want, you just need to shift how you go about paying for them.
Setting saving goals for the things you want in life puts in place a solid plan for the future. It’s not money borrowed from a bank or from a high-rate credit card company but cash earning you interest while you reach for that goal. And while instant gratification is difficult to move away from, and while it’s even more difficult to watch businesses hurting, in the end, because of changing the “buy now, pay later” mindset, the entire economy and all who make it work will greatly benefit.
