In the last few months I’ve been working on being more aware of how I spend my money and making the most of $1, $5, $10, etc. I think sometimes what can hold us back from savings is that we “don’t have enough money” to set aside for savings, when really, small change can add up to big money. 

A few months ago I discovered the free online savings service SmartyPig.com. I decided to check it out and see if it would help me be more engaged and focused on saving.  After four months of using the service, I would recommend it, especially if you’re working towards saving for a special event (vacation, wedding) or goal (new computer, bike, car, house). I also like that this savings account is not part of my regular checking account. I find that I avoid the temptation to just transfer money from my savings to my checking account.

It’s easy to set up a profile and your savings goal. I set up a “rainy day fund” for the period of a year. Each month on the day I specified, the funds are automatically withdrawn from my checking account. SmartyPig sends out reminders for the transaction each month. One of the features I really like is the piggy bank graphic that shows the progress I’m making towards my goal. Today when I logged in, the graphic showed that I’ve achieved 39% of my goal. Little things like that are motivating to me! 

SmartyPig has a social component as well. You can create a community of people you’re connected to via the site, or let friends and family know how to contribute to one of your goals. Smarty Pig is also active on Twitter (@SmartyPig) and Facebook.

If something comes up and you do need access to the money you’ve saved, you have the option to end your goal and transfer the money back to your bank account, or redeem the money as a debit card or a retailer gift card. Again, while you still have access to your money, the fact that you have to think about whether or not you need the money (and how it impacts your savings goal) can help when it comes to saving and making money decisions.

I also like the retail partnerships SmartyPig has developed. If you’ve achieved your savings goal, you can have some or all of your money allocated towards one of their retail partners as a gift card. The benefit – in addition to YOUR money, you’ll get an additional 2-12% (depending on the retailer). For example, you’ve saved $500. If you redeem the entire amount as a gift card for Macy’s, you’ll receive an additional $60 (12%) on your gift card. I thought the retail program would be a great way to save for next holiday season – you’re budgeting all year long for the holidays, earn interest on what you’re saving, which is a smart goal to set, and you’ll get extra money towards your shopping. I was impressed at the variety of retailers, which as of this writing include: Amazon.com, American Airlines, Babies R Us, Barnes & Noble, Bass Pro Shops, Gamestop, Gap, Home Depot, iTunes, Kmart, Kohl’s, Macy’s, Sears, Staples, and Travelocity.

If one of your New Year’s Resolutions is to save money, I recommend SmartyPig as a good resource to help you achieve your goals.

[Please note, I have not been paid to use or mention SmartyPig and their services.]