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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 January 21, 2020

    Becoming Self-Taught (The How-To Guide)

    Becoming Self-Taught (The How-To Guide)

    Most of the skills I use to make a living are skills I’ve learned on my own: Web design, desktop publishing, marketing, personal productivity skills, even teaching! And most of what I know about science, politics, computers, art, guitar-playing, world history, writing, and a dozen other topics, I’ve picked up outside of any formal education.

    This is not to toot my own horn at all; if you stop to think about it, much of what you know how to do you’ve picked up on your own. But we rarely think about the process of becoming self-taught. This is too bad, because often, we shy away from things we don’t know how to do without stopping to think about how we might learn it — in many cases, fairly easily.

    The way you approach the world around you dictates to a great degree whether you will find learning something new easy or hard.

    The Keys to Learning Anything Easily

    Learning comes easily to people who have developed:

    Curiosity

    Being curious means you look forward to learning new things and are troubled by gaps in your understanding of the world. New words and ideas are received as challenges and the work of understanding them is embraced.

    People who lack curiosity see learning new things as a chore — or worse, as beyond their capacities.

    Patience

    Depending on the complexity of a topic, learning something new can take a long time. And it’s bound to be frustrating as you grapple with new terminologies, new models, and apparently irrelevant information.

    When you are learning something by yourself, there is nobody to control the flow of information, to make sure you move from basic knowledge to intermediate and finally advanced concepts.

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    Patience with your topic, and more importantly with yourself is crucial — there’s no field of knowledge that someone in the world hasn’t managed to learn, starting from exactly where you are.

    A Feeling for Connectedness

    This is the hardest talent to cultivate, and is where most people flounder when approaching a new topic.

    A new body of knowledge is always easiest to learn if you can figure out the way it connects to what you already know. For years, I struggled with calculus in college until one day, my chemistry professor demonstrated how to do half-life calculations using integrals. From then on, calculus came much easier, because I had made a connection between a concept I understood well (the chemistry of half-lifes) and a field I had always struggled in (higher maths).

    The more you look for and pay attention to the connections between different fields, the more readily your mind will be able to latch onto new concepts.

    How to Self-Taught Effectively

    With a learning attitude in place, working your way into a new topic is simply a matter of research, practice, networking, and scheduling:

    1. Research

    Of course, the most important step in learning something new is actually finding out stuff about it. I tend to go through three distinct phases when I’m teaching myself a new topic:

    Learning the Basics

    Start as all things start today: Google it! Somehow people managed to learn before Google ( I learned HTML when Altavista was the best we got!) but nowadays a well-formed search on Google will get you a wealth of information on any topic in seconds.

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    Surfing Wikipedia articles is a great way to get a basic grounding in a new field, too — and usually the Wikipedia entry for your search term will be on the first page of your Google search.

    What I look for is basic information and then the work of experts — blogs by researchers in a field, forums about a topic, organizational websites, magazines. I subscribe to a bunch of RSS feeds to keep up with new material as it’s posted, I print out articles to read in-depth later, and I look for the names of top authors or top books in the field.

    Hitting the Books

    Once I have a good outline of a field of knowledge, I hit the library. I look up the key names and titles I came across online, and then scan the shelves around those titles for other books that look interesting.

    Then, I go to the children’s section of the library and look up the same call numbers — a good overview for teens is probably going to be clearer, more concise, and more geared towards learning than many adult books.

    Long-Term Reference

    While I’m reading my stack of books from the library, I start keeping my eyes out for books I will want to give a permanent place on my shelves. I check online and brick-and-mortar bookstores, but also search thrift stores, used bookstores, library book sales, garage sales, wherever I happen to find myself in the presence of books.

    My goal is a collection of reference manuals and top books that I will come back to either to answer thorny questions or to refresh my knowledge as I put new skills into practice. And to do this cheaply and quickly.

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    2. Practice

    Putting new knowledges into practice helps us develop better understandings now and remember more later. Although a lot of books offer exercises and self-tests, I prefer to jump right in and build something: a website, an essay, a desk, whatever.

    A great way to put any new body of knowledge into action is to start a blog on it — put it out there for the world to see and comment on.

    Just don’t lock your learning up in your head where nobody ever sees how much you know about something, and you never see how much you still don’t know.

    Check out this guide for useful techniques to help you practice efficiently: The Beginner’s Guide to Deliberate Practice

    3. Network

    One of the most powerful sources of knowledge and understanding in my life have been the social networks I have become embedded in over the years — the websites I write on, the LISTSERV I belong to, the people I talk with and present alongside at conferences, my colleagues in the department where I studied and the department where I now teach, and so on.

    These networks are crucial to extending my knowledge in areas I am already involved, and for referring me to contacts in areas where I have no prior experience. Joining an email list, emailing someone working in the field, asking colleagues for recommendations, all are useful ways of getting a foothold in a new field.

    Networking also allows you to test your newly-acquired knowledge against others’ understandings, giving you a chance to grow and further develop.

    Here find out How to Network So You’ll Get Way Ahead in Your Professional Life.

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    4. Schedule

    For anything more complex than a simple overview, it pays to schedule time to commit to learning. Having the books on the shelf, the top websites bookmarked, and a string of contacts does no good if you don’t give yourself time to focus on reading, digesting, and implementing your knowledge.

    Give yourself a deadline, even if there is no externally imposed time limit, and work out a schedule to reach that deadline.

    Final Thoughts

    In a sense, even formal education is a form of self-guided learning — in the end, a teacher can only suggest and encourage a path to learning, at best cutting out some of the work of finding reliable sources to learn from.

    If you’re already working, or have a range of interests beside the purely academic, formal instruction may be too inconvenient or too expensive to undertake. That doesn’t mean you have to set aside the possibility of learning, though; history is full of self-taught successes.

    At its best, even a formal education is meant to prepare you for a life of self-guided learning; with the power of the Internet and the mass media at our disposal, there’s really no reason not to follow your muse wherever it may lead.

    More About Self-Learning

    Featured photo credit: Priscilla Du Preez via unsplash.com

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