What if the burden of managing your personal finances could be turned into a game? And what if, in the course of playing that game, saving or paying down your debts gave you the chance to win a lottery-sized chunk of change?
Those "what ifs" have been turned into reality by SaveUp, a personal finance site that aims to encourage good money habits through a system of education and rewards.
Put another way, the site is like cheese sauce on broccoli -- a way to make the things you need to do for your financial health more palatable.
SaveUP CEO Priya Haji, who has been something of a serial entrepreneur in Silicon Valley, wanted to find a way to help people engage more efficiently with their finances.
"We're all aiming to succeed financially by increasing assets and decreasing debt, especially after the recession," Haji said. "So how do we apply some of the newest technology in social media?"
Hence, the gaming focus of the site, which makes growing your personal money tree interactive and, hopefully, a bit more fun.
Gaming the System
The inspiration for SaveUp came from the prize-linked savings accounts that are popular in countries such as the U.K. and Germany. Under those systems, for every, say, $25 you bank in your savings account, you get the get a chance to win the interest on everyone's savings. It's like a mini-lottery: For the cost of foregoing your own incremental interest, you have a chance at a much bigger prize.
Though such platforms are illegal in the U.S., the reward format they use lit an idea light bulb for Haji. The SaveUp team recognized that people find the rote calculations of money-management boring and its organizational aspects overwhelming.
"To pay down your debt, you have to do it little by little, up the hill," Haji said. "Most people don't have the patience. Or it's hard to stay motivated."
But with SaveUp, every time you take one of those small actions, you get positive feedback. First, register any account you're using to save money, or any debt you're trying to pay down. Then, any time you save $10 or pay down $10 of debt, you accrue SaveUp credits. The credits can be spent on lotteries for things such as Banana Republic shopping sprees, Virgin Atlantic tickets or payoff opportunities of up to $50,000 worth of student loans. There's even an option to gamble on a shot at a $2 million prize, with the same odds as a state lotto drawing.
Haji likens the system to a gym where instead of motivation for regular workouts -- calorie burning and incremental improvement -- one random workout could net a lucky person his sought-after physique.
"What if I knew every time I go to the gym, there was possibly a magic wand that was going to make me as thin as I wanted to be," Haji said.
Playing With Your Money Educationally
Credit card companies reward customers with frequent flyer miles and the like, but with those programs, you have to wait until you cross a high threshold to redeem your points. With SaveUp, you can play for prizes almost immediately.
The site also offers built-in financial advice based on its analysis of your accounts and activity. If, for example, you're holding a substantial amount of money in your checking account, SaveUp might suggest you open an interest-paying savings account. If you've maxed out your 401(k), the site could suggest you open an IRA -- and provide you with an instructional video on the subject.
Any number of sites can help you to organize your finances and provide tools to aid you in visualizing where you stand -- Mint.com is a fine example -- but the task of getting all that data together can be overwhelming for the average person. SaveUp takes a softer and more dynamic approach.
"90% of people start sweating when they see their bank account," Haji said. "This is an experience to motivate those people. There's a little box that allows people to check all your balances ... playing for prizes, seeing financial beneficial information."
SaveUp earns money through advertisers and sponsors as well as through referral fees from financial services companies. For example, Charles Schwab pays SaveUp a referral fee when a user opens an IRA with them thanks to SaveUp's advice.
The User and The Way of The Future
The demographic breakdown of people using SaveUp skews fairly young: 35% of its users are between 25 and 35, and another 30% are between 35 and 45.
"We don't see a lot of older people," Haji said. "Having a fun experience [with financial advice] is a little foreign to them. [But] I think they're getting interested in positive rewards and behavioral economics."
For younger people, though, for whom Facebook, Twitter and social gaming are already a part of everyday life, personal finance help with a Web gaming boost may be just the ticket.