SmartyPig.com - Is it worth it?

Today I randomly came across SmartyPig.com . I was immediately intrigued by the concept. The general idea is that you create savings goals and contribute to those goals every month.

However, it is not that simple and has several different factors that make this attractive:

• The first thing that I noticed was the very high interest rate (currently it is at 2.01%). Their highest has been 4.3% back in April 2008 and it appears that they usually are within the top 3 highest among all of the saving accounts (check out: http://www.depositaccounts.com/blog/2010/01/bank-deals-weekly-summary-for-january-23-2010.html#mma ). These numbers are incredibly high considering the small deposit requirements.
  
  
• If you are saving for something that you can purchase at one of their preferred retailers, you could end up getting an additional percentage on top of your goal amount (as high as 12%). So if you are purchasing something from Macy's that is $2,000 worth, you would get an additional $240! As of right now they have Amazon.com (4%), Bass Pro Shops (6%), Cabela's (5%) and several others: http://www.smartypig.com/about/best-in-class .
  
  
• You can have "public" goals that allow people to contribute to those goals, or give them the ability to see how you are doing on those goals. This would be useful if you are raising money to go somewhere, but it wouldn't be useful for what I would be using it for.
  
  
• When they first launched, they had quite a few different fees. However, it looks like they got rid of the majority of those fees, and the main fee they charge is for contributing to a public goal with a credit card.

The dilemma I have been facing recently is whether to open up several saving/checking accounts and where to keep my emergency fund.

I do not like to keep everything in my checking account, because then it is a temptation to spend it all. I also like to be organized in that I want separate savings account for my emergency fund and my car fund, for example.

Below is how I would use this service. Thanks to this blog post, I think I can make this work: http://myfinancialjourney.com/archive/switching-my-high-yield-savings-to-smartypig .

1. I would create a goal that I would use as my emergency fund. When I meet that goal, I would just keep the funds in the account to earn the high interest. If I would need to withdraw from my emergency fund, I would create another goal that is the amount I would need to withdraw, transfer those funds to that goal and then do a transfer to my checking account.
   
   I have read that some people do not think the funds at SmartyPig are liquid enough to be an emergency fund, but transferring to my checking account in 3 business days is liquid enough for me.
   
   
2. I would use the same general idea for a car fund.
   
   
3. If I needed to purchase anything from any of the retailers that provide a bonus %, I would create a goal for that amount, transfer the funds, and then request the gift card. This is especially going to be useful around Christmas time. The only thing to keep in mind that when creating a new goal, it has to be at least $250.
   
   
4. This would allow both me and my wife to setup goals for things we want to save for. It puts more emphasis on the goal of saving (being able to see percentages and time frames) than it does on the process of saving.

So I can be as organized as I want in regards to saving money, without having multiple checking/savings accounts, and get one of the highest interest rates for a savings account in the industry.

Do you think this is a good idea, or am I trying to stretch the point of this service to much? Would you use SmartyPig?

Our First Home Purchase

Note: I actually wrote this when we were in the process of buying the house (and didn't publish it). At this point we have been living in the house for over a month and we still absolutely adore this house. We are hoping spring comes early this year so that we can utilize the deck and yard.

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We have wanted to purchase a house ever since we got married, but the door really wasn't open to us the last 4.5 years or so. The biggest obstacle has been the down payment and the fact that we didn't want to buy a house with too much debt.

Since about September 2009 we discovered the rural development loan which would allow us to 100% finance a home purchase if we could find a house in an area that they consider rural. That combined with the $8,000 tax credit meant that we not only could be in a house before the end of 2009, but that we could take out a huge chunk of our debt and be debt free earlier, if we purchased a house this year.

There were several options that we found, and we spent a lot of time looking at and re-looking at the properties that were listed on MLS. We found a house where the seller was pretty desperate in getting the property out of his hands. It was in a good location in a great neighborhood, and we loved the house. In fact, it seemed almost too nice for our first house (at least in what we had pictured in our head), and there are very few things we do not like about it. From the second we walked into the house, we fell in love with it. The more we thought about the house, the more we realized that this was the one we were going to purchase.

Below is an itemized list of things we like about this house:

• We love the kitchen/dining room/living room layout. It has a very open feeling and gives us plenty of space in having people over. It also has a much larger feeling to it than our previous properties (it has vaulted ceilings) and it has a lot of windows. On top of that, the layout makes it easy to make things very kid friendly.
  
• It has a large car garage.
• It has three official bedrooms, and one extra room where I can have my office. So if we do decide to add to our family, we have plenty of space (or a guest bedroom).
  
• It has a huge room that can be used as a dedicated theater room or as a gaming room in the basement.
• There is a large fenced backyard with three mature trees. The back fence is lined with a lot of large trees that will give us privacy in the spring and summer seasons. There is also a nice mature tree in the front yard. 

• There is a large deck in the backyard, which is partially covered. This was a huge plus on my list.
  
• They installed an underground sprinkler system in both the front and backyard.
• There are a ton of gardening spots in both the front and backyard (which are also watered by the underground sprinkler system). Both Andrea and I are excited about doing some gardening (fresh vegetables and flowers).
• There is 2.5 bathrooms, including a master bathroom.
• There is a small, detached storage shed on the property.

We could see ourselves living at this house the rest of our lives. We have never felt this way about any of the properties we rented. We are very grateful to God for being able to afford this house and we are excited in how we can bless other people with this house for many years to come.