Here's a twist: A program that rewards you for not spending
Recently, we talked about Bill Thaler's work on why most of us have so much trouble saving money.
Thaler believes that when it comes to something as important as saving for the future, all of us need to be coaxed into developing more self-control, willingness to battle procrastination and the ability to handle short-term sacrifices.
Well, it sounds like someone was listening.
Introducing SaveUp, a new incentive program that rewards consumers for saving money and paying down their debts with the opportunity to earn rewards including cars, vacations, and smaller items like gift cards and electronics.
SaveUp has partnered with more than 18,000 U.S. financial institutions so that their members can register savings and debt-bearing accounts. Will it work? Well, some people certainly think so.
While the model of rewarding certain behaviors with chances to win prizes isn’t new, the fact that SaveUp is encouraging healthy behaviour coupled with some attractive rewards makes it a site to watch.
Prize-linked savings could be a good way to get low-income consumers to save more money, according to this recent paper published by the National Bureau of Economic Research -- particularly if set up like a lottery.
The big difference, of course, is that win or lose you always get back the money you put in although the chances of winning drop as the prizes get more appealing.
People in the U.S. have already proven they have a voracious appetite for state lotteries that provide a similar thrill but with greater downside, NBER suggests.
And there is a precedent. Many Latin American banks give out prizes, while holders of Britain’s Premium Bonds can win extra cash if their account is the one called out during a regularly-scheduled lottery.
If SaveUP makes it across the border, will you sign on? Would the chance of winning a prize change your behaviour in any way?
By Gordon Powers, MSN Money
Posted by: Sylvia Brandt | Dec 2, 2021 3:19:28 PM
I am currently on disability. Being a single mother with a 15 year old girl in dance and an 11 year old boy in hockey; I would definitely be interested as I enter every contest I can just hoping to get ahead. A new car, a flatscreen tv, ANYTHING to make our lives easier and more manageable. I try to put at least 20.00 a month away for emergencies. I just pretend I DONT EVEN HAVE IT.
Posted by: STEVE | Dec 2, 2021 9:09:28 PM
ASK YOURSELF THIS. WHY CAN A BANK USE YOUR MONEY TO INVEST IN ANYTHING WTHOUT YOUR PERMISSION? FURTHER WHY CAN THE CEO OF ANY BANK MAKE 10 MILLION A YEAR? AND BONUS HIMSELF 200 MILLION FROM INVESTMENTS THAT ARE MADE THROUGH YOUR MONEY? WHILE GIVING YOU 1 PERCENT INTREST ON WHAT YOU KEEP THERE? A WISE MAN SAID A PERSON IS SMART, PEOPLE ARE STUPID! AND MAN ARE PEOPLE STUPID! WHILE YOU SIT AND THINK, MY BANK WILL NEVER FOLD LIKE INDEPENDENTS IN THE STATES. THEY ARE USING YOUR MONEY TO MAKE THEMSELVES RICH AND ALL OF US WHO WORK 50 HOUR WORK WEEKS AND CAN BARELY DO ANYTHING BUT PAY AND EAT SUFFER. WHEN IS IT TIME TO SAY ENOUGH??? AND RISE TO MAKE IT EQUAL FOR US ALL??
Posted by: Mama | Dec 2, 2021 9:47:09 PM
uh Steve? What’s with the rant about the big evil bank? I think this is a great program, sometimes what is needed is not necessarily the incentive (although great) but the publicity that the incentive generates. People need to save more, borrow less frivolously. This is a great reminder of how important that is. And why not reward fiscally responsible behaviour?
Posted by: Western Guy | Dec 3, 2021 1:57:53 AM
Its obvious. Steve isn't doing well and needs somebody to blame. He is on the right track for a couple of points though. I invest my money through other mediums than a bank or brokerage house. Their margins are just too small. At the same time I have a 7 figure loan from several banks to cover my investments. My average interest rate is about 4% and its locked in. I personally can't feel that upset at banks as that is a really cheap rate for somebody in their 20's to get that amount of money. Its allowing me to make a very healthy profit each year
As to the article. I think it is a great idea. It will give a perceived incentive to people to save. Realistically they should anyways but I understand few figure that out.
Lastly the world is full of boundless opportunities. Everybody has a reason why they are hard done by and how it isn't their fault that they are in trouble and suffering. If they took a look back at their lives and honest with themselves however they will see many instances where they took the easy route, the lazy route, didn't go the extra mile. Personally I can see where I do it all the time and yet the opportunities are so bountiful that for me its simply because I am content with what I have already gotten. Everybody is exactly in the situation they decided to be in.
Posted by: Trixie | Dec 4, 2021 9:58:04 AM
Why are YOU harddone by, Western Guy? HAS anything really bad ever hit you? (You don't seem to understand Steve at all, yet say everybody has been "hard done by.")
I sit here wondering what has ever gone wrong in your life and hoping nothing really serious ever does because you probably won't be able to cope.
To answer the question, no, the chance of winning is just that, a chance.
Posted by: The Wanderer | Dec 7, 2021 7:36:47 AM
My wife just turned 65 , for the past 4 yrs. she has beencollecting from her own private pension-OMERS .AT 65 bang! a $300. reduction .Don't worry tho OAS kicks in and gives her a net increase of almost $100. Whjat's wrong here ? A private plan that when we turn 65 allof a sudden becomes controlled by BIG BROTHER , who if you aren't already aware has a level of income that they feel should be sufficient . No questions, no options just do as you're told . I ask , just what is the point in anyone takinmg part ina private pension plan ? To you young people out there a couple of suggestions : either start investing insomething with a reasonable rate of return , or take any money you can manage to set aside and stick it under your mattress . Don't get involved in anything that the government can keep TABS on . You might just be surprised at how much you have if and when you reach that magic time : RETIREMENT !!
Posted by: Dana | Dec 8, 2021 2:48:54 PM
To Western Guy: If you are born a rich white male, you basically have nothing to stop you in life unless you choose to do nothing. Even if you are a poor white male - with a good work ethic...nothing will stop you. It's called white privelege. There are certain things that are available to you that people of lower class, women, or people of colour will never have the opportunity at. If you believe racism and discrimination doesn't exist...well, it's probably because you're a white male. If not, I would be very interested to know.