Late last year I was sent some information about SmartyPig, www.smartypig.com The name got my attention and when I checked out their Web site, I knew it was something I had to share with other Budget Smart Girls.
SmartyPig is a new way of saving and thinks of itself as saving the 21st Century way. A few days ago I spoke with Jon Gaskell, co-founder of SmartyPig. He shared with me the unique features of the site, how it works and how it can help you save money for everything from your dream vacation to just adding to your rainy day fund. And here’s some great news for subscribers of the Budget Smart Girl newsletter, thanks to the generosity of the folks at SmartyPig, one lucky person is going to be selected to win a $50 SmartyPig gift card to help get their savings off to a great start.
Budget Smart Girl (BSG)-When and how did the whole idea of SmartyPig get started?
Gaskell-SmartyPig was launched in April 2008. We wanted to create a site where people could save for short term goals and tangible items like a new computer, a vacation, even a honeymoon because most other sites were more focused on long term goals such as retirement funds.
BSG-Are you seeing more people using your site now? Are you getting more inquiries about your site?
Gaskell-Yes, right now people are making resolutions about saving money. Making and reaching financial goals seem to be the top of everyone’s list. I think we’ve been in a credit card mindset and now because of the current economy, we’re shifting into the savings mindset.
BSG-Say I’m a new user to SmartyPig, how do I use it? What are the similarities and differences to other online banks? Any truly unique features?
Gaskell-You go to the site, create an account, decide what you want to save for, how much you want to save and if you want to make it private or public, which is one of the unique features of SmartyPig. You can share you goals with your family and friends on social networking sites like MySpace and Facebook. They can help you reach your goal and even add money to your savings account. We’ve found that this feature really helps people reach their goals faster.
BSG-I know online banking is gaining popularity, but there are still some people who are nervous about putting their money into an ‘establishment’ that’s not brick and mortar. Is there anyway you can put their minds at ease?
Gaskell-If you look at the bottom of our site, you’ll see we are FDIC insured and we take all the same security measures and precautions as brick and mortar banks.
BSG-Okay, I’ve saved my money with SmartyPig, now it’s time to spend it. How can I do that?
Gaskell-You have three options. One you can have the money transferred to your checking account. Two you can have the money put on a SmartyPig MasterCard, which acts as a debit card. There’s no charge for withdrawing money from it at an ATM or you can use it anywhere that MasterCard is accepted. Your third option; and this is perfect if you want to buy something from one of the SmartyPig’s partners. For example, let’s say you were saving to buy a ring. One of our partners is Zales. You could use it there and also get an additional discount, so it’s another way to make your money go further.
BSG- Many of us are finding it harder to put money into savings accounts right now, any tips?
Gaskell-You obviously can only save what you can afford, but getting into a savings mindset is important. For example, last year I had two goals. One to save money for the holiday gifts and one for a vacation. When we were flying home I thought I own this vacation, not the credit card company. It was very gratifying knowing I’d already paid for it when I got home. And it’s never too late to start saving, even if you’ve never saved before.
BSG-And what about helping your children save and teaching them about saving rather than putting purchases on credit cards?
Gaskell-We have lots of parents who e-mail us and say it’s amazing how much attention their children have been giving to the money they’re saving and even sharing their goals with their siblings.
BSG-As of speaking today, SmartyPig’s interest rate is 3.25% which is higher than brick and mortar banks.
Gaskell-Yes, we try to be very competitive, we’ve had to lower it recently because of the Fed lowering their rate, but we can pass along a better interest rate because we’re online and have lower overheads than brick and mortar banks.
BSG-And if I save with SmartyPig and need my money for an emergency, is it easily accessible and are there any penalties for withdrawing money before a set time?
Gaskell-None and it usually takes about a day to have the money transferred into your checking account.
BSG-I’m sure Budget Smart Girl readers would like to see the social aspect of SmartyPig in action. Can they view your profile?
Gaskell-Yes, go to Facebook, type in Jon Gaskell and you’ll see my savings goal which right now is to take a train trip across Canada with my two younger brothers.
A note from BSG-you will need to register with Facebook if you’re not already a member to access Jon’s profile.