SmartyPig Evil – Updated
Welcome back!
When I first heard about SmartyPig, I was intrigued. It is a new way to have goal based saving. I’m a big proponent of setting goals and achieving them and especially tracking them.
The neat thing about SmartyPig is that is allows you to open your goal to the public and allow them to contribute to your goal. This sounds like a nice idea, if you see the world through rose colored glasses and think grass is made of sugar.
You won’t find many people out there who want friends or family to know what they are up to financially, especially if you have the type of family you need to keep that kind of information away from.
But these aren’t the true drawbacks of SmartyPig. The ultimate problem with SmartyPig is that it all it does is to promote consumerism; which is something we need to get away from.
Sure they let you save money, easily and with a high interest rate. But read the fine print. You cannot withdraw your money electronically. They give you a debit card that can be used at ATM’s and for purchases. They offer coupons for discounts at retailers when it’s time to make your purchase. That’s the only way you can access your money. ATM’s have limits. You can’t get at all your money at once. It’s not suited for an emergency fund.
I’m all for encouraging people to actually pay cash and save for the things they want. But the goal of this blog is to teach the world that you can go without. We should be saving to save money. Not to spend it.
People need to save to have a cushion for emergencies, to save for a house, to save to have kids, to save for the future. Not for a flat screen TV or the latest gadget from Apple.
So, in my opinion, SmartyPig is evil in that it encourages consumption that our society can no longer maintain.
As for saving money, I recommend ING Direct and HSBC Direct. Both are pretty good. ING Direct is by far the best.
Avoid SmartyPig in my opinion.
Updated 8-6: One of the founders of SmartyPig chimed in to let us know that SmartyPig now allows you to transfer your money out via ACH, the same way it goes in. So, you can easily get it to your bank account when the goal is finished. My wife and I want to build an emergency fund, maybe we’ll give it a try.
