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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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    The Gentle Art of Saying No

    The Gentle Art of Saying No

    No!

    It’s a simple fact that you can never be productive if you take on too many commitments — you simply spread yourself too thin and will not be able to get anything done, at least not well or on time.

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    But requests for your time are coming in all the time — through phone, email, IM or in person. To stay productive, and minimize stress, you have to learn the Gentle Art of Saying No — an art that many people have problems with.

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    What’s so hard about saying no? Well, to start with, it can hurt, anger or disappoint the person you’re saying “no” to, and that’s not usually a fun task. Second, if you hope to work with that person in the future, you’ll want to continue to have a good relationship with that person, and saying “no” in the wrong way can jeopardize that.

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    But it doesn’t have to be difficult or hard on your relationship. Here are the Top 10 tips for learning the Gentle Art of Saying No:

    1. Value your time. Know your commitments, and how valuable your precious time is. Then, when someone asks you to dedicate some of your time to a new commitment, you’ll know that you simply cannot do it. And tell them that: “I just can’t right now … my plate is overloaded as it is.”
    2. Know your priorities. Even if you do have some extra time (which for many of us is rare), is this new commitment really the way you want to spend that time? For myself, I know that more commitments means less time with my wife and kids, who are more important to me than anything.
    3. Practice saying no. Practice makes perfect. Saying “no” as often as you can is a great way to get better at it and more comfortable with saying the word. And sometimes, repeating the word is the only way to get a message through to extremely persistent people. When they keep insisting, just keep saying no. Eventually, they’ll get the message.
    4. Don’t apologize. A common way to start out is “I’m sorry but …” as people think that it sounds more polite. While politeness is important, apologizing just makes it sound weaker. You need to be firm, and unapologetic about guarding your time.
    5. Stop being nice. Again, it’s important to be polite, but being nice by saying yes all the time only hurts you. When you make it easy for people to grab your time (or money), they will continue to do it. But if you erect a wall, they will look for easier targets. Show them that your time is well guarded by being firm and turning down as many requests (that are not on your top priority list) as possible.
    6. Say no to your boss. Sometimes we feel that we have to say yes to our boss — they’re our boss, right? And if we say “no” then we look like we can’t handle the work — at least, that’s the common reasoning. But in fact, it’s the opposite — explain to your boss that by taking on too many commitments, you are weakening your productivity and jeopardizing your existing commitments. If your boss insists that you take on the project, go over your project or task list and ask him/her to re-prioritize, explaining that there’s only so much you can take on at one time.
    7. Pre-empting. It’s often much easier to pre-empt requests than to say “no” to them after the request has been made. If you know that requests are likely to be made, perhaps in a meeting, just say to everyone as soon as you come into the meeting, “Look guys, just to let you know, my week is booked full with some urgent projects and I won’t be able to take on any new requests.”
    8. Get back to you. Instead of providing an answer then and there, it’s often better to tell the person you’ll give their request some thought and get back to them. This will allow you to give it some consideration, and check your commitments and priorities. Then, if you can’t take on the request, simply tell them: “After giving this some thought, and checking my commitments, I won’t be able to accommodate the request at this time.” At least you gave it some consideration.
    9. Maybe later. If this is an option that you’d like to keep open, instead of just shutting the door on the person, it’s often better to just say, “This sounds like an interesting opportunity, but I just don’t have the time at the moment. Perhaps you could check back with me in [give a time frame].” Next time, when they check back with you, you might have some free time on your hands.
    10. It’s not you, it’s me. This classic dating rejection can work in other situations. Don’t be insincere about it, though. Often the person or project is a good one, but it’s just not right for you, at least not at this time. Simply say so — you can compliment the idea, the project, the person, the organization … but say that it’s not the right fit, or it’s not what you’re looking for at this time. Only say this if it’s true — people can sense insincerity.

    Featured photo credit: Pexels via pexels.com

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