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Does Social Saving Really Work?

Does Social Saving Really Work?

    There’s a Web 2.0, socially networked version of just about everything these days — including saving money for your goals. Sites like SmartyPig allow users to announce their financial goals to the world, network with other savers, talk about saving money on their other social networks and ask for help from friends and family. But does the social experience really help people save more money than they might otherwise?

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    Just the fact that several websites have put social networking together with saving isn’t enough to automatically say it’s a good idea. There are plenty of positives and negatives to the idea, so far, making it a surprisingly hard call.

    Who Should Really Know What’s In Your Bank Account?

    While I can name quite a few reasons to be leery of the social networking / saving combination, there is one in particular worth worrying about: who should know how much money you have — and what you plan to do with it? There are plenty of people who I don’t want to know what the contents of my wallet are, let alone what I have in my savings account. It goes far beyond the guy who always wants to mooch lunch off of me, too. I wouldn’t want an employer to get a good look at my savings goals: what if I’m planning for a long vacation that I haven’t told my boss that I plan to take? Or what if I’m saving for a goal that my employer doesn’t approve of? Think of how much damage a few photos on Facebook can do and then expand it to your financial decisions! I’m less concerned, admittedly, about the approach that websites like Wesabe take — allowing you to discuss your finances in forums and make the decision on how much information to share fore yourself.

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    On top of those privacy concerns, many personal finance sites worry me because of the potential for identity theft. Even if you’re only giving out your bank account numbers to websites you trust, every site that gets it — money management, social saving, etc. — is just a bigger chance that something will go wrong and someone will get access to your financial identity. Sure, it sounds a little paranoid, but sites like Mint have a long list of security measures in place because they need them. While having to give out your bank account number to make use of a service shouldn’t necessarily be a deal breaker, it should certainly give you pause.

    Does Support Really Make A Difference?

    The idea behind social saving is that the more support you get in working towards your goals (especially in saving money) the more successful you can be. In general, that’s a good argument: I know that I’m more likely to complete a goal if someone will hold me accountable for it. In terms of goal-setting, accountability does not need to be formal — just the fact that someone knows about my goal and will think poorly about me if I don’t complete it is enough to encourage me. It’s a relatively simple hack that can really increase your ability to move forward on your goals. That holds true for monetary goals just as much as any other ambition.

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    SmartyPig, in particular, makes the most of this incentive. It goes beyond informing friends and family about your goals. Instead, the site helps to engage them in the savings process — to the point of offering ways to ask your friends and family to donate to your cause. No matter the reason you might like that level of engagement on your own, it does seem likely to help savers significantly. Of course, just making mention of your goals in a conversation with a friend or a family member may be enough to provide the same benefit.

    Does Social Saving Really Help?

    Overall, it’s easy to conclude that social savings sites can be useful tools to create a support structure for yourself as you work toward a financial goal. It is less clear, however, whether the benefits that sites like SmartyPig offer outweigh the drawbacks to using them. It seems that, to a lesser extent, it’s possible to get the same effects without putting so much information about yourself out on the internet. But I don’t think that you can get the full effect with just a conversation or two with a friend. In some cases, it’s arguable that those benefits are worth putting all sorts of information about yourself online and allowing anyone to look at it.

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    The fact that some of these sites, including SmartyPig, can be very beneficial to our savings makes it harder to say no to them. In most cases, I would suggest that someone considering turning down 3.9 percent interest on their savings accounts — the rate that SmartyPig offers for money saved through its website — is out of their minds. Considering that many banks are dropping the interest rates they’ll pay on savings accounts, it’s almost a question of how much you’re willing to sell your information for. Either way, that interest rate can really boost your ability to save. There are plenty of sites that have made social lending an option — possibly a lucrative one — as well.

    Which direction do you lean on this one? So far, I’m reluctant to put my savings goals up for everyone to see, but I’d like to hear your decisions.

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    Last Updated on September 17, 2018

    Why Do I Have Bad Luck? 2 Simple Things to Change Your Destiny

    Why Do I Have Bad Luck? 2 Simple Things to Change Your Destiny

    Are you one of those people who are always suffering setbacks? Does little ever seem to go right for you? Do you sometimes feel that the universe is out to get you? Do you wonder:

    Why do I have bad luck?

    Let me let you into a secret:

    Your luck is no worse—and no better—than anyone else’s. It just feels that way. Better still, there are two simple things you can do which will reverse your feelings of being unlucky.

    1. Stop believing that what happens in your life is down to the vagaries of luck, destiny, supernatural forces, malevolent other people, or anything else outside your self.

    Psychologists call this “external locus of control.” It’s a kind of fatalism, where people believe that they can do little or nothing personally to change their lives.

    Because of this, they either merely hope for the best, focus on trying to change their luck by various kinds of superstition, or submit passively to whatever comes—while complaining that it doesn’t match their hopes.

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    Most successful people take the opposite view. They have “internal locus of control.” They believe that what happens in their life is nearly all down to them; and that even when chance events occur, what is important is not the event itself, but how you respond to it.

    This makes them pro-active, engaged, ready to try new things, and keen to find the means to change whatever in their lives they don’t like.

    They aren’t fatalistic and they don’t blame bad luck for what isn’t right in their world. They look for a way to make things better.

    Are they luckier than the others? Of course not.

    Luck is random—that’s what chance means—so they are just as likely to suffer setbacks as anyone else.

    What’s different is their response. When things go wrong, they quickly look for ways to put them right. They don’t whine, pity themselves, or complain about “bad luck.” They try to learn from what happened to avoid or correct it next time and get on with living their life as best they can.

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    No one is habitually luckier or unluckier than anyone else. It may seem so, over the short term (Random events often come in groups, just as random numbers often lie close together for several instances—which is why gamblers tend to see patterns where none exist).

    When you take a longer perspective, random chance is just . . . random. Yet those who feel that they are less lucky, typically pay far more attention to short-term instances of bad luck, convincing themselves of the correctness of their belief.

    Your locus of control isn’t genetic. You learned it somehow. If it isn’t working for you, change it.

    2. Remember that whatever you pay attention to grows in your mind.

    If you focus on what’s going wrong in your life—especially if you see it as “bad luck” you can do nothing about—it will seem blacker and more malevolent.

    In a short time, you’ll become so convinced that everything is against you that you’ll notice more and more instances where this appears to be true. As a result, you will almost certainly stop trying, convinced that nothing you can do will improve your prospects.

    Fatalism feeds on itself until people become passive “victims” of life’s blows. The “losers” in life are those who are convinced they will fail before they start anything; sure that their “bad luck” will ruin any prospects of success.

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    They rarely notice that the true reasons for their failure are ignorance, laziness, lack of skill, lack of forethought, or just plain foolishness—all of which they could do something to correct, if only they would stop blaming other people or “bad luck” for their personal deficiencies.

    Your attention is under your control. Send it where you want it to go. Starve the negative thoughts until they die.

    To improve your fortune, first decide that what happens is nearly always down to you; then try focusing on what works and what turns out well, not the bad stuff.

    Your “fate” really does depend on the choices that you make. When random events happen, as they always will, do you choose to try to turn them to your advantage or just complain about them?

    Thomas Jefferson is said to have used these words:

    “I’m a great believer in luck and I find the harder I work, the more I have of it.”

    Ralph Waldo Emerson said:

    “Shallow men believe in luck. Strong men believe in cause and effect.”

    Your luck, in the end, is pretty much what you choose it to be.

    Featured photo credit: LoboStudio Hamburg via unsplash.com

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