On the most recent edition of the poorly-named Consumerism Commentary podcast, the show interviews a co-founder of a banking website called Smarty Pig. Smarty Pig is a website that helps people save up money for specific goals. Users can allow friends and family to track their progress toward the goal and even make contributions toward it. This could provide accountability for people who have trouble saving and provide a venue for relatives to provide monetary gifts toward important goals. Money contributed toward the goal goes to an FDIC-insured account based on funds Smarty Pig invests in CDs, so the rate of return is superior to a typical money market account.
Most people get no formal education in personal finance. All their knowledge comes from people selling financial products. They take on too much risk and therefore experience the slightest blip in the economy as a crisis. It’s nice to see a financial product that actually encourages good financial decisions. I have no experience with Smarty Pig apart from hearing a 10-minute interview, so I do not endorse the service. I personally wouldn’t be sanguine about sharing my family’s savings goals. I am happy, though, to see a financial business creatively promoting saving instead of using their creativity to get people into debt.
I would love to see the government get on this saving theme by creating tax-advantage accounts for various purposes like Emergency Fund, Saving for a Home, Saving for Transportation (a new bicycle in my case). We already have similar accounts for retirement, college savings, and healthcare.
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