Web Resources For Tough Times
Young Money
Web Resources For Tough Times
02.25.09, 12:00 PM ET
Fewer jobs, more debt.
Things are starting to get a little scary.
Unemployment in the United States is up to 7.6% in January.
That's 11.6 million jobless Americans, and as a nation we owe billions in credit card debt.
Now is the time to really focus on making smart financial decisions.
Luckily, there are many online resources to help manage everything from credit card debt to saving for that dream vacation.
Best of all, especially now, most of the sites are free.
One site designed to help manage money in a tight economy is SmartyPig, which launched in March of 2008 in Des Moines, Iowa.
The idea for SmartyPig came from founders Mike Ferrari and Jon Gaskell, when they started 529 College Savings Plans for their children. They wondered why there wasn't a similar savings option for adults. SmartyPig was thus formed on the hunch people want a way to save cash for purchases they may have previously put on a credit card.
"SmartyPig helps create good financial habits by reversing the buy now, pay later credit card mentality," says Gaskell. "The idea isn't groundbreaking. It's the same common approach our grandparents used with their money: They saved up and bought something when they could afford it."
SmartyPig's savings account is operated by West Bank, also in Iowa, and currently offers a 3.25% annual percentage yield (APY). May sound too good to be true (Madoff, anyone?). If you've compared rates, you know that's nearly twice the average for national savings accounts. But West Bank's chief financial officer, Doug Gulling, vouches for his bank's legitimacy. "West Bank is an FDIC-insured bank and a subsidiary of a publicly traded company (West Bancorporation), so people can get information about us very easily. It's not like a Madoff hedge fund or something like that. We are very transparent."
Gulling explains that SmartyPig can offer such a competitive interest rate because it expects users' investments to be in for the long run. "Generally speaking, people are setting goals for a three-year period on average," he says.
As Gulling mentions, all your money is Federal Deposit Insurance Corp. insured, which means if the bank were to ever fail, your principal is protected up to $250,000 (until the end of 2009) and then for $100,000 thereafter if the higher limit is not extended.
Once you've created an account you choose how much you want to save. There is a minimum deposit of $25 needed to start a savings account and a maximum deposit limit of $50,000 in a 24-hour period. However, you can set up more than one savings goal.
Once you hit your goal you can collect your money in several ways; put it on a MasterCard debit card, through gift cards with SmartyPig's participating partners, or simply transfer it back to your regular checking account. There is no fee for withdrawing your money. If you do opt to collect your cash in the form of a gift card, many times you can actually earn more money. So, for example, if you want to buy that flat-screen TV you could opt to withdraw your cash in the form of a Best Buy card; many times they tack on an additional amount.
If you decide halfway towards your goal that you actually need that money now, you can simply withdraw your money without any consequences, although you'll have to close the account.
There is also a feature on SmartyPig that lets you track your friends' goals. The intention here is that if you publicize your savings goals you may find motivation through others supporting you. However, for many younger savers, money is a very private affair, so it's hard to know how useful this will be.
SmartyPig is not the first site to try to get people thinking about their finances. Sites such as Wesabe.com and Thrive are free Web sites that help users lay out their finances and make wise budgeting decisions. Investing site Cake Financial similarly makes your portfolio easier to understand by putting all your assets in one place so you can see your financial situation from a broader perspective.
Our economy probably won't be down forever, and jobs will eventually come back. But in the meantime protect yourself by learning all you can about your financial situation. Some of the best resources are just a mouse click away.
-----------
-----------We're entering tough times. The economy is slipping, jobs are being lost, and credit card debt is going up.
There are many resources just a mouse click away that can help you manage all aspects of your financial future.
SmartyPig
SmartyPig, launched March 2008, is a free online savings account--currently offering a 3.25% annual percentage rate (APR)--operated with West Bank, in Iowa. The site stemmed from the idea that something similar to a 529College Savings Plan should be created for adults. Just set up an account, and determine your savings goal. Once you've reached your goal, you can retrieve the cash as a MasterCard debit card, gift card from certain stores or put the money back into your checking account. The yield may seem suspiciously high, but your money is FDIC insured.
-----------
Thrive
A budgeting Web site started in the mind of then 27-year-old Avi Karnani, Thrive is supported by nine experts in start-ups and a consumer manager, all in their 20s and 30s. The site allows you to upload your accounts--from savings to your Roth IRA--then helps you understand where all your money is going. From tips on how to save more to where to invest, Thrive his helpful for those in the earlier stages of life.
-----------
Credit.com
Based in San Francisco, Calif., Credit.com was started by a former director of the New Jersey Division of Consumer Affairs. Credit.com sorts and ranks credit cards by several categories. But the site also takes you beyond lists and offers more credit information. They help you manage your debt in regards to mortgages, auto loans, marriage and more.
-----------
Virtual Wallet
Virtual Wallet is an online savings account run by PNC Financial Services Group and divides your money into three accounts: everyday spending, short-term savings and long-term savings. Virtual Wallet is FDIC insured and provides additional features like overdraft protection, automatic bill pay and debit cards (run through Visa). There are some drawbacks, as with many online bank accounts, such as a three-month check limit (who writes checks today, anyway?). There is a $25 minimum to open the account.
-----------
Wesabe
If budgeting is your burden, let Wesabe, founded in 2005 in San Francisco by Marc Hedlund can help you do some of the leg work. Wesabe allows you to download your bank information (securely) and helps you manage your money, breaking out your spending into categories so you can see where all your money goes. There is a networking competent, which lets you to talk with other users. If you like, you can also call Hedlund directly (800-511-8544) and he'll answer your questions.
-----------
Cake Financial
Founded in 2006 in San Francisco by Steven Carpenter, the intention of Cake Financial is to provide a free way to manage your portfolio yourself, without getting a broker involved. You don't actually move any of your investments, but Cake Financial will allow you to look at all of them with a broader perspective. You can also find out what others are trading in real time and get tips from other users.
-----------
MyWorkster
Jobs are hard to come across these days. MyWorkster.com might be the extra assistance you need. Founded in 2005, the site is created with the intention of career networking through college alumni connections. The site functions as almost a cross between the professional networking site LinkedIn and Facebook. You simply create a public profile, which other users can see. You can post a résumé online, put out a job query and search a job database.
-----------
Bill Shrink
You could be saving on your cellphone bill each month. BillShrink, co-founded by Schwark Satyavolu (co-founder of online banking consulting site Yodlee), may help cut costs. The site lets you enter your criteria for a wireless carrier--such as wi-fi--and the system analyzes what plan is the best for you. A useful feature is that BillShrink will continue to monitor your bill in case things change and a better option arises. BillShink also offers the same service for credit card bills.
-----------
LowCards
Around since 2000, LowCards, owned by Hampton & Associates in Birmingham, Ala., is by no means the new kid on the block. The best part of the site is that it sorts and ranks over 1,000 different cards--everything from your credit score to what sorts of perks you are looking for to ones with the lowest APR. Low Cards also finds the best cards for your stage of life; whether you're a student or run a small business.
-----------
Retail Me Not
What better way to save then start cutting (or Googling for) coupons? The process is simple; you find the item you want online then enter the Web address into RetailMeNot's search. If there are coupons for this store or site, they will find them for you--even ones not being advertised anywhere else. There is not a guarantee that all the coupons will work, but each coupon is given a percent success rate so you'll know whether or not to take your chances.
-----------
