Here we are starting the second half of 2009, a year that has been an absolute roller coaster ride for the global financial sector and by association, the individual. There are few people in the developed world who have not been affected in some way by the economic meltdown that started in ernest last year. One of the fundamental shifts that I see occurring is the real skepticism we now approach our financial services with. This skepticism is a good thing in that it makes us more prone to research the products offered before investing our hard-earned money. In the past we were all too likely to fall for the allure of a Madoff investment that promised questionably high returns. Now, we are looking behind the curtain at the details and at the people responsible for managing the services we purchase.

Not too long ago I wrote a post entitled “economic recovery the neighborly way“, which described a community supported system of local currency that helped individuals get by in a time of wide-spread local financial hardship. Today I am inspired by another simple concept – that of saving for something you want rather than buying it on credit. Kind of old-fashioned I know, but nonetheless an effective way to make sure you limit opportunities to live beyond your means. Combine this age-old strategy with the revolution of the internet and you get SmartyPig. SmartyPig is a savings plugin for your current banking strategy. By plugin I mean that you can combine the compelling returns of a SmartyPig savings account with your existing funds management strategy, rather than replace it with an on-line bank. Better yet SmartyPig is a goal oriented savings concept that you can promote to friends and family via various social networking services.

SmartyPig works like this: I want to buy a new mountain bike – instead of using my Visa and paying interest I open a SmartyPig account on-line and indicate in my profile why I am saving the money and when I expect to have accumulated the required amount. I can then use my Facebook/Twitter/Blog, etc. profile to let my friends and family know that I am doing this and if they feel inclined (say for my birthday) they can give a gift contribution to the savings plan. My own contributions are calculated for me by SmartyPig (how much $ to save by what date) and then I approve a monthly transfer of that amount from my current bank account(s) to my SmartyPig savings account. Voila! New mountain bike!!

Basic, easy, old fashioned savings. Too simple some might say and they would be right – too simple not to work! Today SmartyPig has over $100 million on deposit and is growing quickly. Kind of makes me think about the way I am starting to treat my money, from the cash in my pocket to my retirement savings and everything in between – I want to protect what I have and prudently and carefully invest what I can in simple, basic and safe ways that will clearly help me reach whatever goals and objectives I may have. I can see a potential place for SmartyPig in my future plans, if theirs include continuing to grow internationally.