Facebook and Beyond: Social Networks for Saving Money

Last Updated Jun 17, 2010 10:35 AM EDT

Twitter, Facebook, Myspace, LinkedIn: Take your pick; social networking has become America's new favorite pastime. These platforms help us find new jobs and long-lost high school loves, spy on our neighbors, post pictures, and fan Betty White. But did you know social networking can help save you money, too?

Here's the thing: We already share plenty of random news with friends, family, co-workers, and even strangers. Right now the status updates on my Facebook page announce the following:
  • Daniel is "in a open relationship."
  • Inna is asking for donations for a friend whose house burned down.
  • Sarah is inviting us to join her at her Red Cross Blood Drive next Saturday.
  • Ajay "finally got to reserve an iPhone 4."
  • Nick just had a baby boy!
So while we're posting so much information, why not use our social networks to communicate our savings goals? Sharing and updating financial goals and putting them out there for all to see (either on your own page or by creating a new group dedicated to your goal) not only makes our ambitions more serious and real in our mind; it may spark help from our community of friends and family - in the form of advice, support and maybe even some donations.

If relatives know you're saving up to redo your deck and your goal is to save up $15,000, maybe they'll get you Home Depot gift cards for birthdays and holidays instead of stuff you don't really need. Perhaps your Uncle Tom will whisper a recommendation for a trustworthy contractor.

And if you're shopping around for a good savings rate, let it be known. Someone you know may have a great tip.

Financial companies are also tapping into the social networking market to help customers boost savings.

At Smartypig, for example, you can sign up for a savings account specific to your goal and invite friends and family to donate money. Once you've reached the finish line you can redeem your cash on either a debit card or various gift cards.

At GreenNote, students saving for college can use the online service to create a college savings campaign and request donations from their social network.

The FriendlyFavor site helps you ask friends and family members for favors - like donations, swaps or volunteer help. For example: "I'm moving out of my house on Friday, come one, come all. Free pizza in exchange for your time and upper-body strength." At the end of the move, you've gotten all the needed help and saved a few hundred bucks in moving costs - all thanks to your social network.

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    Farnoosh Torabi is a personal finance journalist and commentator. She is the author of the new book Psych Yourself Rich, Get the Mindset and Discipline You Need to Build Your Financial Life. Follow her at www.farnoosh.tv and on Twitter at @farnoosh.

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