Saturday, March 27, 2010

Managing Your Money, Social Media Style

One of the best panels I attended at SXSW was called “Banking 2.0: Financial Services Driven by People and Emerging Technologies.” And no, as dry as that sounds, I’m not getting paid to say that I really, really benefitted from this panel. While the panel probably could have used a more engaging title in order to draw more curious conference goers into the room, the panelists had plenty of useful information to keep those who did wander in informed and entertained.

The Panelists

Moderator: Jennifer Openshaw

Rob Garcia of

Kenneth Lin of

Aaron Forth of

Bob Weinschenk of

The Gist

All the panelists are folks who are trying to make personal finance easier via the internet and Web 2.0 tools. The two that struck me as the most innovative, social media-wise, were and is a peer-to-peer lending service. In other words, it’s all the financial benefit of borrowing and lending without the pesky, old-fashioned bank getting in the way. So how can that be?

According to the site, banks have high administrative, marketing and other infrastructure fees that are naturally passed on to their borrowers. For borrowers, this means higher interest and more time spent repaying a loan. Not to mention the fact that, with the banks running scared after the recent financial crisis, it has become harder and harder to even get a loan from a bank.

Lenders – those kind souls with money in their pockets and the desire to earn a little extra income lending it out – benefit from giving loans only to people who have met LendingClub’s stringent standards. Not to mention, they now have a formalized place to invest their money without having to go through all the trouble of obtaining a bank charter or vetting their borrower and drawing up the paperwork themselves. According to, investors receive an average 9.5% rate of return on their investment. Try comparing that to squirreling money away in a savings account or CD. And it’s all thanks to Web 2.0 technology.

But I’m not a high roller. I don’t especially need a loan (I have enough student loans as it is), and I’m not Daddy Warbucks with lots of extra money floating around to lend to my peers. That’s why I was most impressed with the social media aspects of I would dare to say that almost anybody could benefit from a site like SmartyPig.

So what is it? In essence, SmartyPig is a website that allows anybody to set a goal and save toward it. The site gives you a competitive interest rate (around 2%) and, social media-wise, allows our friends and family to help you out with your goals.

For example, let’s say Jennifer wants a MacBook Pro. She starts her savings account with and has to put in at least $10/month toward her goal. At birthday time, she may share this goal with Aunt Matilda who, upon seeing her favorite little niece working so diligently, might throw in the last bill needed to reach the goal. From there, Jennifer can either transfer the funds from SmartyPig back to her debit card, or convert it to a gift card from one of SmartyPig’s partners. All of this (except making a contribution or buying a SmartyPig gift card using a credit card) is absolutely free. To me, this sure beats getting $10 from grandma in your birthday card.

Honorable Mention –

While less social media oriented than the other companies represented on the panel, is worth a mention for its sheer awesomeness. The site allows you to monitor your FICO credit score absolutely free! (Those of you who take advantage of your yearly free credit report at, will remember those solicitations to “See your FICO Score for only $12.95!”) After a brief sign up similar to the sign up required to view your credit report from the three major bureaus, will show you:

  • Your current credit score
  • The factors affecting your credit score (i.e. high credit limits, length of time you’ve had credit, etc.)
  • Simulations of what would happen to your credit score should certain scenarios occur (i.e. paying off all of your credit cards or defaulting on your cell phone) is definitely worth checking out, especially in these days of increasing financial desperation.

So who knew I would go to a tech conference and learn more about managing my money? Next up, “ Love it or Hate It?” and “ The King of SXSW.”


  1. I hope sites like these take off because no matter how many banking regulations the government finally tries to enforce, I suspect that banks are just going to get more and more creative with their language. I have used in the past to borrow a small sum and I continue to use to track my spending. I was going to ask you what's in it for Credit Karma, but I found my answer in their faq's section. It was refreshing to finally visit a site where free means free.

  2. I don't know! I'm going to have to check it out. I was also super impressed by I regularly shell out $7-$12 for my FICO score, so to see it there for free was a revelation. I messed with the little algorithms too, and found that I'd better stick to the straight and narrow or my score will suffer mightily!

  3. I like the idea of social media banking. It's not that I don't trust bankers, but, well, I don't trust bankers. It will be interesting to see how these sites and other peer-to-peers fare over the coming years. Eventually they'll have to come under some type of oversight because the politicians just won't be able to leave well enough alone, which may be a good thing or a bad thing, depending on the nature of the supervision and the agency involved.

  4. Thanks for sharing these three sites, I especially liked the Smarty Pig-the site that allows you to save toward a goal. I'm all about making goals and achieving them!

  5. Now these are interesting. I love the idea of peer lending, mostly because I've had so many strangers reach out to help me in my life. I always want to find some way to pay it forward. Right now my investments are more likely to be microloans through something like where every little bit helps.

    Smartypig sounds like a great tool. Imagine teaching your teenagers how to save money with something like this where they can actually see it grow? It could go miles in teaching financial responsibility in a fun, cute way. There's a vaguely similar service for creative entrepreneurs called

    For all my criticism of social media, it's projects like these that get me excited. Online projects CAN help people take control and improve their lives with support from friends and strangers around the world. And that's fabulous.

    Now I'm going to go explore CreditKarma. I was sold on the algorithms. I'd love something that could tell me "If, Then" about my financials. And explain it to me without me having an accounting degree.