Does Whatever a SmartyPig Does

Hi, my name is Susan and I’m a save-aholic.  There are certainly worse things to be, but I can’t act like this is not an addiction.  If I had my way, I would squirrel away all our earnings into mutual funds, IRA’s and good old savings accounts.  Luckily my husband understands that we need to purchase things… like food… and diapers.

I can trace the addiction back to my childhood.  My mom, ever the enterprising mother, was trying to teach us about financial responsibility and she started the “Family Bank.”  Instead of giving us cash for allowance, we had a ledger that showed how much money we had in the family bank and we could withdraw if needed.  It really is a genius system and I plan to use it with my children.  One fateful day, something amazing happened.  I did not withdraw my allowance.  The next week, I saw my ledger and low and behold – I had twice as much money!  The more I didn’t withdraw, the more money I had!

Pictured:  3 generations of financial wizardry

Years later I found myself married with a mortgage and other bills and while I was reluctant to go back to my old vice, I knew that with the right help, I could save responsibly.  Unfortunately, saving is only a gateway drug to something far worse…  BUDGETING.  Soon there were late nights spent at the computer.  Six or seven spreadsheets at a time.  My web browser full of financial sites.  I would have pink elephant dreams about Scottrade, Woodforest, Bank of America.  I had hit a new low.

While there is no cure for addictions as deep as this, I have found something that helps.  The website is called SmartyPig (seriously, don’t laugh).  It’s an online bank.  When I first found it, it had an interest rate over 2% for regular, liquid savings and no fees.  The real magic, though is in the system.  You set up accounts for specific goals.  You tell them how much you want to save and when you want to have it by.  They suggest a bi-weekly, semi-monthly or monthly amount to contribute and then you’re done!  It automatically withdraws from your checking and you just sit back and let it happen.

This has truly done wonders to simplify my budgeting (and settle my dependency).  Of course there are bills you will have to pay each month that don’t make sense to “save” for, but I’ve found all kinds of uses for it.  I cancelled our escrow account and set up my own savings for insurance and taxes.  I realized I was just handing my money over to Bank of America to collect interest off it themselves and then mishandle it when it came time to actually pay the bills.  I also save for our car insurance bills.  With our policy you pay significantly less if you pay for six months at a time as opposed to monthly.  I’m saving for a big vacation for our five year anniversary.  I’ve even started a college fund for Little Bit for the time being until I can do my research on long term investing.

In all seriousness, this is a simple way I’ve found to set money aside.  The interest rate has dropped significantly since I started (something about a tanking global economy with apocalyptic financial losses – I don’t know, I wasn’t really paying attention), but it’s still pretty competitive for short term savings.  There are still no fees.

It’s biggest benefit is that it takes some of the sting out of saving money with the automatic transfer.  It may not be for everyone, but I think most people would agree that it’s harder to spend money that isn’t burning a hole in your debit card.

If you’re interested, here is the website or write a comment and I’ll email you a referral (I get a savings bonus for referring people and I’m not too proud to admit it).  I really am weirdly enthusiastic about saving money and I love helping other people do it.  I’m also always on the market for new and lucrative saving opportunities so let me know if you stumble across a gem.

That’s it for now.  I promise not to post too many financial blogs in the future.