Reminders work. That’s why retailers sell $1 billion a year in post-it notes and virtually all alarm clocks come with a snooze button. Maybe it’s time to put the power of prompt to work in your savings strategy too.
A growing body of research suggests that money reminders tweeted, texted, emailed or otherwise delivered through social media fall on receptive eyes. Researchers in the Philippines, Bolivia, and Peru found that banks reminding clients to save via text message and other means increased the likelihood of reaching a savings goal by 3.1% and the total amount saved by 6.3%.
(MORE: The Hidden Cost of Text Refunds)
A study led by Barbara O’Neill at the Rutgers Co-operative Extension found that Twitter and Facebook messages to adults raised awareness about money issues even if they didn’t always lead to behavioral change. In the study, banks tweeted clients up to nine times a day with messages like:
- Think yourself rich. Savings starts in ur brain, not ur bank account.
- Plug ur spending leaks & save: snacks, soda, lottery etc. $5/ day = $1,825/ yr + interest. Small amts add up.
Susan Beacham, a financial educator, regularly sends texts with money reminders to her teens. It’s a great idea. Young people send and receive an average of 3,339 texts a month. Remarkably, they actually read them.
But texting money reminders can be for adults too, and now you can sign up for a helpful dose of savings prompts through the America Saves campaign from the Consumer Federation of America. The program is ongoing. But if you sign up by the end of April you will become eligible for a $500 reward.
The texting service is simple. You register with a specific goal and will receive three texts a month through the end of the year reminding you to take steps toward reaching your goal. Standard texting charges apply.
The most popular goals include: setting up an emergency fund, saving for education, repaying debt, saving for a home, and saving for retirement. Your text reminders will look something like this:
- Reminder: You pledged to save for a home. Have you made your savings deposit this week? Reply “y” for yes & “n” for no.
- Transferring money from checking to savings automatically is the fastest way to save $500 to $1,000 for emergencies.
- Rounding debit payments up to the nearest $100 goes a long way toward getting you out of debt faster.
- How do you eat an elephant? One bite at a time. Don’t let the fear of your debt stop you from conquering it one little bite at a time.
Sound silly? So is a snooze button, which simply leads you to set your alarm 10 minutes earlier. But it works.