I learned about SmartyPig at the Finovate conference, and wanted to try the online savings account for myself. I currently have an ING savings account and think I do a pretty good job socking some funds away each month for a rainy day, but you can always save more, right?
Based on the demonstration at the conference, SmartyPig seemed like a fun way to save cash for specific goals. Here’s how it works, and why it’s different from other online saving tools.
The sign-up process
When you sign-up with SmartyPig, you are also really signing up for a new savings account through their banking partner, West Bank. This West Bank savings account is currently yielding a 2.01% interest rate (better than the 1.30% ING is currently offering)!
Once you have a SmartyPig account, you’ll need to link it to an existing checking account. SmartyPig requires that you transfer a minimum of $25 from your checking account to your new savings account right away, so you have at least a small balance to start.
You can modify your security and account settings, including choosing an avatar for yourself. SmartyPig has plenty of piggy personalities to select from, or you can upload your own.
At SmartyPig, you list out your savings goals and it tells you how much you need to put aside each month to reach those goals. Sure, anyone who passed a high school math class can calculate the same thing, but can they give you the cute piggy graphics and visual motivation you need to actually follow through? And more importantly, will they autodraft that necessary amount from your checking account each month?
I decided my first goal on SmartyPig would be to save up for a Vegas trip I’m taking next June (safely assuming my winnings from the blackjack table won’t cover the costs of the weekend). I figure to really go in style I’ll need two grand. Smarty Pig reminded me that a $2000 trip means saving $245 each month. Yikes! Somehow, $245 drafted from my checking account for the next eight months seems like a heck of a lot more than just putting $2000 on my credit card and worrying about it later. This might be Smarty Pig’s biggest strength: it forced me to re-evaluate how much something is really worth to me. If I’m not willing to part with the funds each month ahead of time, maybe I should reconsider my purchasing decisions.
I decided to lower my Vegas goal to $1000, and chose the day of the month I want the $125 autodrafted from my checking account each month. I’ll also start looking for ways to cut my trip’s costs (cheaper airfare and luck at the slots will certainly help).
Perhaps the most unique thing about SmartyPig is that it can interact with your Facebook and Twitter account, if you want it to. The SmartyPig Share tool alerts your friends and family to your savings progress and even solicits funds from them. You can create a widget to place on 28 various social networks of your choosing. This widget can either ask for friends and family to donate money to your savings goals or (if you think that’s kind of tacky) simply show them your progress. Sharing your goals with others is a great way to help you stay motivated enough to reach them.
Once you’ve reached your goals, SmartyPig has a few options for sending your savings back to you. You can opt for a MasterCard with your savings on it, choose a gift card from a list of retailers (this option will add 6% to your amount), or simply transfer your savings back into your checking account.
Don’t let the cuteness and simplicity of the website’s design fool you: it has thorough, no-nonsense security in place to keep your account secure. SmartyPig will ask for a strong password, answers to five security questions, and other personal information like your Social Security number when you sign up. In truth, the security seems almost like overkill. Each time I visit the site it wants me to answer security questions, and my sessions time out faster than other online accounts I have with ING, BofA, and Chase. I actually locked myself out of my SmartyPig account by entering the wrong password too many times. Luckily, the customer service was efficient and friendly, and I was back in my account in no time.
I haven’t explored everything yet in SmartyPig, but I did notice the ability to connect your SmartyPig account with other online personal finance managers like Mint and Wesabe. You can also purchase SmartyPig gift cards for friends to get them started on the savings site, too.
Overall, SmartyPig is perfect for those looking for some fun motivation to save towards goals. It is especially great for people who enjoy social networking, but can also just be used as a basic savings account that autodrafts monthly from your checking account. Plus, you can edit or cancel your savings goals at any time, so it really is as flexible as you want it to be. A worthwhile site to check out for long-time penny pinchers and savings newbies alike!