CFSI’s fabled Kimberly Gartner has honored me by guest contributing this post:
Recently, I have become smitten by an online/mobile service that is designed to help couples save money together for their savings goal. Since I’m convinced that 2011 is going to be the year of underbanked savings, I asked my colleague, Arjan, to lend me space on his blog to share my experiences with all of you.
I first heard one of PiggyMojo’s founders, Jayson Halladay, speak about their service last year at one of CFSI’s Underbanked Solution Exchange meetings. I was immediately captivated. Jayson’s enthusiasm for their service plus their thoughtful integration of four critical principles resonated with me:
- Transform impulse buys into impulse saves
- Turn “not spending” into an experience
- Offer social rewards
- Create habitual behavior
I immediately signed up, partly to see if his presentation and the user experience matched. It was a quick, relatively easy enrollment process. Within minutes I had established a new savings goal for myself and my partner, signed both of us up, and added a cheering section, my mom. When I make a decision to save and not spend, I just sent a text to PiggyMojo. PiggyMojo then sends a text to my savings partner.
“Kimberly just made a good save! $4, no coffee. And you? Save now! You have $x left on your weekly savings goal.”
My partner wasn’t as gung-ho about this new savings plan and texting service, but he kept getting my texts, or rather the texts from PiggyMojo. “Kimberly just made a good save! $30, sale on running clothes. And you? Save Now! You have $35 left on your weekly savings goal.” Soon, he’d tell me, “We should PiggyMojo that.” Or, “Well, let’s not buy that. PiggyMojo it.” Even without actually sending texts, PiggyMojo helped transform the ways we think about savings.
One Saturday night we were out to dinner. We both got texts at the same time and grabbed our phones, thinking it was the babysitter. It was PiggyMojo, “Congratulations, you saved $83 this week.” Spontaneously, our Saturday dinner conversation turned into a positive discussion about savings and our goals. Without PiggyMojo, we wouldn’t have had that experience.
The next day mom emailed to ask how we are doing with savings. PiggyMojo emailed my cheering section. No one wants to disappoint Mom!
Their website also integrates cool visual representation of the goals and charts of your progress. Check out the tabs “how it works” and “goals in progress” at www.piggymojo.com for more.
PiggyMojo is still a start-up, and there are certainly kinks to work out. For instance, when we did stop texting our saves, PiggyMojo stopped texting us. I wanted to see if they would give me gentle reminders to save. I’m sure, though, that other savers don’t want to be bothered by texts. With time, PiggyMojo will figure it out.
PiggyMojo also needs a better way to convert the texts/saves into real savings in a deposit account. They are working on that system integration. The bigger issue behind this point is whether these impulse saves are really new savings or just delayed consumption. (This was a huge hang-up for my partner.) Figuring out how to move money into savings without pinching people’s budgets will be critical.
Now, I know I’m not an underbanked customer. My experiences can only take us so far. I do believe, though, PiggyMojo is relevant for underbanked, low-income consumers. In fact, helping people move out of poverty and meet savings goals was a motivation for the service. I look forward to hearing more from PiggyMojo about the experiences and outcomes of their low-income savers.
Why do I think 2011 is the year of underbanked savings? As we all know too well, the last two years have been really tough. Still, we’ve seen personal savings hit new highs. New savings initiatives have entered the marketplace, tapping new technologies and new distribution channels. There’s U.S. Bank’s START program, D2D’s prize linked savings efforts, GoalMine’s investment gift cards. This blog could have been about any number of these new savings efforts.
I don’t think people will return to their high-spending ways. Americans will continue to seek economic security, work to save their money, and use existing and new strategies to meet their goals. Come on, underbanked champions. Prove me right!
Kimberly Gartner is Vice President and Team Lead for the Market Services at the Center for Financial Services Innovation. You can send her (compliments only, please) email at kgartner@cfsinnovation.com.