SaveUp.com Review: Using Lottery Prizes To Encourage Saving?
Another startup designed to encourage people to save more is SaveUp.com. The inspiration came from a new economics idea called “Prize-Linked Savings”. People tend to like lotteries, even though they are mostly a losing proposition. So what if you effectively gave out lottery tickets in exchange for saving money instead? If you think it sounds like a Freakonomics idea you’d be right.
First, you have to link up your financial accounts like banks, credit cards, and student loans (yep, usernames and passwords). Next, whenever you perform a positive activity, you earn credits towards prize drawings for $100 gift cards up to a $2 million prize. For example, every time you increase your savings account balance by $1 earns you one credit, and every $1 that you lower your debt earns you one credit. There are also various small challenges:
How does SaveUp make money then? Here’s a snippet from their press release:
SaveUp’s prizes are furnished through advertising and sponsorships with top consumer brands, including Virgin America and others. SaveUp’s brand partners receive significant exposure to a highly aspirational audience through frequent brand placements, exclusive content or category ownership, social media linkage, and the ability to offer coupons, promotions and other exclusive deals to SaveUp users on the site.
Data aggregation service is provided by Intuit (owners of TurboTax and the popular Mint.com). SaveUp.com is currently offering 100 bonus credits to My Money Blog readers for joining (it’s something, but don’t get too excited as it’s not that much). I opened an account and have been playing with it… the overall user experience is smooth and I do get a little “scratch-off ticket” buzz. I’ve put all my credits towards the drawing for the $100 Home Depot gift card. Daddy needs a new Makita hammer drill… but I’m afraid if I don’t win anything in a couple weeks I’ll probably get bored. :/
By Jonathan Ping | Reviews | 7/9/12, 2:38am
July 9th, 2012 at 4:40 am
I have to say my usernames/passwords aren’t worth a $100 gift card. Personally, this will be one I pass on.
July 9th, 2012 at 9:17 am
By my calculations the $50k instant win games are worth about 1.6 cents. The $2M jackpot is worth slightly more if you treat it as actually 2 million, but less if you treat it as the present value of a $2M annuity. I’ve kept doing it because it hardly takes any time, but I don’t know how long I’ll stick with it and it doesn’t bother me when I miss a few days. Maybe if I actually won something I’d feel differently.
It’s hard to know how to value the drawings, but it seemed to me like the entry numbers were sequential, and subtracting my last from my first in a given drawing and dividing the prize by that made me think the expected value on those was worse than on the instant games. Of course that could be wrong if there are actually fewer entries than I thought.
July 9th, 2012 at 3:32 pm
I’m tempted to do this but giving my username and passwords really scares me….
July 9th, 2012 at 7:12 pm
This hardly seems worthwhile. Until they get a real system in place, as discussed in Freakonomics (which will never happen with our government) they provide very little value.
July 13th, 2012 at 5:52 pm
I have used Saveup.com for a couple of months now without any wins. I can’t believe this website’s potential prizes are worth the time.