Today, you can find piggy banks in all shapes and sizes, made of ceramic, metal, porcelain, plastic – you name it. Some even have an electronic or battery feature that will count your coins as you insert them, tallying up your total so you know how much you’ve saved toward your goal. In my family, growing up, we had a big red bull bank – but we called it The Pig.
Still, it’s clearly not the most effective way to save. Not only is it too easy to access your cash, it’s also too easy to spend your bills before they ever make it in the slot. Then there’s the little issue of interest – if you’re not earning some return on your money, you’re actually losing cash to inflation.
Whether you’re saving for this summer’s family vacation, or getting a jump on the holidays, these days there are tools that will help you save automatically, and programs that speed your progress. Many are focused on saving for college, but others are multi-purpose. Here’s a run-down of the ones I’m liking right now:
Upromise. Upromise is one of many programs that works by depositing money in your college savings plan when you shop at certain retailers or buy certain products. You register your credit or debit card with the company, and then they track your usage, giving you a small kickback when you make a qualifying purchase. Does that mean you should buy a new couch so you’ll get the cash back for college? No. But if you need – and can afford – a new couch, and you have a choice between a retailer that works with Upromise and one that doesn’t, you might want to spend your money at the participating retailer. The program is free, and you can invite friends and family to join as well and donate their rewards to you. Upromise partners with 600 online retailers, 8,000 restaurants and over 21,000 grocery stores.
BabyMint. This program is much like Upromise in that you shop within a network of retailers (the BabyMint network currently includes 500 merchants, who offer cash back of 1 – 26%). You can have your cash sent to you via check, deposited into a college savings account like a 529, or put toward your student loans. You can also have family members and friends join the network and contribute their savings to your children’s accounts. To shop, you either use a BabyMint College Savings credit card, or you log in through the site and shop online. Another perk of the program is that about 175 private colleges will match your BabyMint savings dollar for dollar if your child chooses to attend their school.
SmartyPig. SmartyPig is an online savings account with some perks to help you reach your goals faster. You set a goal – say, next summer’s vacation, your husband’s birthday present, or that new couch – a timeframe, and an amount you need to reach that goal, and SmartyPig does the math to tell you how much you should contribute on a monthly basis. That amount will automatically be deducted from your checking account each month and placed in an FDIC-insured savings account until you reach your goal. You can set multiple goals at a time, a perk in my book because when you save for everything in one big pot, it’s too easy to spend the money earmarked for your emergency fund on your vacation instead. Once you’ve reached your goal, you have the option of receiving the cash plus your interest (accounts are now earning 2.01% APY) on a retailer gift card (a good option if you know exactly where you’re buying that couch, not so good if you don’t) or as a transfer back into your checking account. Often, retailers will kick in a bonus for putting your cash on their gift card – Kohl’s, for example, will give you an additional 5%.
ING Direct. This is another online savings account, no bells and whistles, save for one thing – it allows you to set up multiple accounts that act as sub-accounts, or pots, so you can prioritize your savings goals and keep your money separate. Each account is free, and you can set up automatic transfers from your checking account each month or even week. So say you want to save $50 a month for next year’s vacation and $25 a month for a new television – that money will be automatically withdrawn from your checking and placed in the appropriate sub account. You can track all of your accounts on the same screen and transfer money between sub accounts as needed. ING Direct is currently offering a 1.25% variable APY.