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SmartyPig issues user data

25 November 2008  |  4250 views  |  0 Source: SmartyPig

SmartyPig, the online piggy bank that helps individuals, families and organizations save for specific goals, today released aggregate data from its American user-base. The data shows U.S. financial trends as we head into the holiday season -- including top savings goals for users, and average dollar amounts saved. SmartyPig, a new service that leverages the age- old idea of saving up for purchases, adds Web 2.0 and social networking technology to help customers reverse the "buy now, pay later" credit-card mindset. SmartyPig has seen a 506% growth in its deposit base since the economic downturn.

"We know people need to change their ways when it comes to spending, and we're helping them do it through saving first," said Jon Gaskell, SmartyPig co-founder. "We are working to help reverse the mentality of 'buy now, pay later' that helped create this difficult economic environment. We are also optimized to reach Gen Y, so they can learn from current mistakes and avoid ending up back in this predicament."

According to Paul Kasriel, director of economic research at Northern Trust in Chicago, last year Americans spent approximately $472 billion more than they earned after taxes -- a negative savings rate of 5.2 percent -- double the previous year, and a record high.

SmartyPig offers the only true banking application that is social, appealing to the next generation of banking customers. SmartyPig helps users reach their goals faster by allowing family and friends to help them reach their goals. Customers can embed customized SmartyPig widgets on popular sites like Facebook, MySpace, or on their own blogs and Web sites.

Currently, the SmartyPig average goal amount is $8,558, with the projected duration scheduled at just over 4 years. The goal category breakdown is below, along with the average goal amount in each category:

-- Travel 21% Average Goal: $4,411
-- Holiday Spending money 12 Average Goal: $903
-- Electronics 10% Average Goal: $2,470
-- Home Improvement 6% Average Goal: $12,912
-- Saving to Save: 5% Average Goal: $9,761
-- Weddings 5% Average Goal: $7,850
-- House down payment/addition 4% Average Goal: $22,228
-- Emergency Fund 3% Average Goal: $6,632
-- Babies 3% Average Goal: $5,084
-- Home Furnishings 2% Average Goal: $3,543
-- Car or Car Expenses 2% Average Goal: $6,778
-- College: 1% Average Goal: $9,667
-- Misc. 26% Average Goal: $10,710
-- Car Expenses 2% Average Goal: $6,778
-- College: 1% Average Goal: $9,667
-- Misc. 26% Average Goal:ses 2% Average Goal: $6,778
-- College: 1% Average Goal: $9,667
-- Misc. 26% Average Goal: $10,710


SmartyPig offers a highly competitive 3.90% (APY) interest rate on its savings goals, which are FDIC insured through West Bank. Once a savings goal is reached, customers have the option to receive cash boosts of up to 6% from best-in-class retail partners like Amazon, Royal Caribbean, Pottery Barn, Best Buy, Home Depot and Overstock.com on top of their savings plus interest. Combined, the redemption can save a user $200 on $1,000.

If one saves $100/month for 12 months with SmartyPig's 3.9% APY and redeems a gift card with a 6% cash boost, the out-of-pocket cost is $1,200, for $1,290 purchasing power. Conversely, if a shopper charges $1,200 to a credit card this season and then pays $100/month for the following year (at 14.99% APR), they're left owing $107 at the next holiday season. The actual out-of-pocket cost is over $1,300 for $1,200 purchasing power.

A full 67% of SmartyPig users are under the age of 35, 20% are between 36- 45, and the remaining 13% are older. However, United States law doesn't allow minors to be primary owners of a bank account, so children's goals are owned by their parents. Anecdotally, SmartyPig knows many children and teens are saving with them.

"Because we play in the social space, we give parents an opportunity to talk to their kids about money. And their kids are listening," said Gaskell. "We want to provide the next generation of banking customers a chance to get off on the right foot with regard to its finances. We want to instill in them the optimism and common sense created by setting goals and working to achieve those goals."

Money saved with SmartyPig can be redeemed in one of three ways. Once consumers reach their goals they can:

-- Receive savings plus interest on the flexible SmartyPig MasterCard®
Debit Card (which can be used anywhere MasterCard® is accepted,
including ATMs -- for withdrawals only)
-- Have savings plus interest returned to the bank account they use to
fund their SmartyPig goals via Electronic Funds Transfer (ACH)
-- Stretch savings dollars even further, receiving savings plus interest
on a gift card from some of the country's top retailers


SmartyPig was created after co-founder Michael Ferrari, who had just set up a 529 college savings account for his new son, searched for a similar way to automatically save for a vacation that offered him the benefits he felt were most important: a social networking aspect, true incentives from retailers he frequents and ease of use. When he couldn't find anything, he set out to create SmartyPig. The company has seen rapid adoption in the U.S. since its April 2008 launch. In October 2008, SmartyPig announced its first global partnership with Australia New Zealand Banking Group Limited (ANZ) -- delivering innovative social savings to the next generation of Australian banking customers -- and is set to announce further international expansion plans in early 2009.

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