Nickeled and Dimed

If this is your first time visiting Centsability to Wealth you may want to see what we are about , read about me, or read our introductory post.

In yesterdays guest post, Nate talked about goal oriented savings.  He used his personal situation–moving to Egypt–as an example of identifying a goal (that will cost money), figuring out how much it will cost, and saving for it.  By taking these steps, Nate says, we can do the things we are passionate about (moving to Egypt in his case, perhaps buying a new TV in yours) without ruining our finances.

In a continuation of the goal oriented savings theme, I want to talk SmartyPig, a goal oriented savings account. SmaryPig is similar to any normal online savings account.  You deposit money from your regular bank account and have the option of making reoccurring automatic deposits in the future.  But it also offers many features to cator to those who are simply saving for one big goal.

After opening an account with SmartyPig, they will ask you what your goal is.  You will then tell them how much money you need to meet this goal and when you need the money by.  With this information, SmartyPig will figure out how much you need to deposit each month to reach your goal.  Pretty cool stuff, but not ground breaking by any means.  Here is what puts SmartyPig over the top for me:

It allows you to make your account “public” (this term is misleading, people will need to know your email address to access it and they will not be able to get any information about your account, so it is not truly public).  By making your account public, family and friends can use your email address to locate your account and can then donate money to it.  Mom and Dad get a little extra money on their tax returns?  Guide them over to your SmartyPig account and they can make a nice little contribution.  They also give you a widget to put on your Myspace and facebook pages that will allow anyone on your friends list to donate money to your goal.

Now if you are simply saving for a big screen TV, you probably won’t find many contributors.  But if you are saving for something life changing, like Nates move to Egypt, or my up coming wedding, you may find many willing contributors.  And even if it is just $10 here and there, every little bit helps.

And here is the kicker with SmartyPig; they are currently offering a fantastic 3.25 percent rate (ING Direct is currently offering just 1.85 percent!).

To sum up all their qualities, SmartyPig will allow you to identify a savings goal, tell you how much you need to save each month to reach, allow and encourage others to contribute to your cause and give you one of the best interest rates around.  What’s not to love?

Registering with SmartyPig is simple.  Just head over to www.smartypig.com, click the “register now” tab on the right side of the front page and follow the simple instructions from there.  All you will need is the bank account information from the bank you will be making deposits from and your goal information.

If you have a large savings goal you are looking to reach, give SmartyPig a try.  The interest rate alone will make it worth your while.

Please continue sending any personal finance related questions, suggestions and story tips to centsabilitytowealth@gmail.com.