You Probably Don’t Need a Startup to Help You Save
I read this post about a new startup called ImpulseSave this morning, which wants to make it easy for people to save impulsively on the go. “Fifteen to 20 percent of our take-home pay is spent on things that we don’t need, and don’t even remember,” a woman from the ImpulseSave video says. So instead of making all those impulse purchases, you can save impulsively instead!
The intent of this sounds all good and nice, but, you guys: Saving isn’t actually that complicated! Just set an automatic withdrawal every month to transfer some money from your checking to a high-yield, no-fee savings account (look on Bankrate for the best rates). ImpulseSave’s current interest rate is 0.4 percent, which is better than the big banks, but you can get an even better rate with ING (0.8 percent), Ally (0.85 percent), or Barclays (1 percent). Do it. Start with $5 a month if you have to.
A lot of banks let you do this too. My bank, PNC, has a variety of automatic saving options (as well as a somewhat silly “Punch the Pig” feature — there is a pig button you can click to automatically send a pre-determined amount to savings). I believe Bank of America and perhaps others have a “save the change” option that automatically rounds up your purchases to the next dollar and puts that money in a savings account. If your bank offers these features, it may be easier to use them and take the crappy interest (I get 0.55%) — especially since you can usually transfer that money back into checking instantly, should you need it. The difference is, at most, a couple bucks a year, unless your savings are huge.
I use ImpulseSave and looove it. Seriously. I have set 3 goals: $500 towards CC debt, $150 for a Wii for my mom, and $115 for a pair of earrings. I started at the end of March, maybe? I autosave $5-10 a week towards each goal, and it tells me when I’ll reach them (October for the CC, December for the Wii–just in time for Christmas–and I have already reached the earrings goal, but promptly spent that on a Kindle Fire instead (I had a coupon)) and then put extra money in when I think about it/am not worried about overdrawing my checking account.
I like that there are charts showing my money grow. I like that other people can “like” and comment every time I save. (No one can see how much you have saved or anything, just that you saved $5 because you skipped your morning latte or whatever.) It took 2 days to transfer from their bank to mine.
I do this on top of a couple other savings plans ($150 from each paycheck goes to one savings account, $25 every two weeks goes to another for my bff’s wedding), but for me personally it’s a quick and easy way to save a little extra money, and I like that it’s earmarked for certain (easily changeable) goals so I don’t feel as bad about splurging.
I think it’s a cool idea and all the little features sound neat. Anything that gets people saving is good, right? I’ve thought about switching to PNC strictly because they have all those fun little charts and whatnot. Also because Wells Fargo is nowhere near my apartment.
This post prompted me to open an Ally savings account. I already had one with ING but I find the website clunky, so I have no qualms about moving my (meager) savings to Ally, especially since the interest rate is slightly higher. I would also like Mike Dang to know that it’s only since I started reading The Billfold that I’ve actually made a conscious effort to actually put money INTO my savings account and then not touch it 3 weeks later when I want a new dress. Progress! Also I just paid off my only credit card, closed the account, and cut up the card. It felt awesome.
Adding on to your comment for more Mike Dang praise — I just checked the 401k account I started last month (thanks to the Billfold) and already have $357 in there! I should have started it back when I was hired 9 years ago, but better late than never?
“high yield” savings account? I would rephrase that as the “least low yield” savings account. The rates are a joke.
@Mirch You took the words right out of my mouth! There is not a universe in which 1.01% is high-yield, and calling it such won’t change that.
When the Billfold first launched, I got the sudden urge to start a savings account. I’ve always been a flake about saving money for the future. Usually I will get motivated to do it for a short period, then I would slide back into my old habits when things got bad.
I think I’ve found a better way to save this time around and I wanted to share it since it hasn’t been mentioned already. There’s a service called Smarty Pig that lets you create specific savings goals for the future. Smarty Pig lets you set up automatic transfers from your checking account to their own BBVA savings accounts. It shows your progress towards those goals and even lets you take donations from your family and friends. It’s really been a life saver for me. I’ve got two weddings to go to this summer in Chicago and California (I live in New York) and I would probably be freaking out had I not created a savings goal for both on Smarty Pig.
Just thought I would share.