Galia in NY Daily News “SAVING GOES SOCIAL. WEBSITE ADDS FUN, REWARDS TO BUDGETING”

by Galia Gichon on July 8, 2011

By now many of you have heard of Mint.com.  If you have not, check it out!  It can save you a great deal of time managing your personal finances and gain clarity on where your money goes.  If you are already on Mint.com, check out Payoff.com.  I was interviewed in the NY Daily News to give my opinion on both online budget sites and which are better for different individuals.  Here is the full article:



SAVING GOES SOCIAL. WEBSITE ADDS FUN, REWARDS TO BUDGETING

BY PHYLLIS FURMAN DAILY NEWS STAFF WRITER

Hey guys, look how much debt I’ve paid down!

Payoff.com, a new free financial website that launches on Monday, wants to help you budget, save money, erase your debts – and tell your friends about it along the way.

Like other money sites, Payoff lets you set goals and track your spending. But it adds games, rewards and connections to friends via social media to motivate you to keep moving along your path.

“Payoff will make money simple, social and fun,” said Scott Saunders, the company’s CEO and founder.

As you would on other financial management sites, such as Mint.com or HelloWallet.com, you link your bank, credit card, mortgage and loan accounts to Payoff.com.

But Payoff layers on some added features that try to connect your money to your life.

You start out by stating your dreams – like a trip to Paris – as well as more practical goals, like paying off a credit card or starting a business.

If you’re the type who likes to share, you can invite your friends through Facebook or via email, to comment on your dreams, track your progress and cheer you on.

Want some added incentive to stay out of Starbucks? Payoff.com will reward you with badges – the kind you got in first grade – if you do things like put money in a savings account and not touch it for a month.

The more badges you earn, the greater the chance you’ll win small prizes of $25 to $50. There are sweepstakes, too, like a $500 “Payoff Pays Your Bills” contest for people who join Payoff and “like” it on Facebook.

“It’s all about motivation,” said Payoff.com COO Eden Warner.

Payoff.com has been in a test phase for the last few months and has attracted several thousand customers and $4 million in funding so far. Investors include prominent New York venture capital firm FirstMark Capital.

The tech company makes money when users leave its site and connect with third-party vendors recommended by Payoff, such as online bank ING Direct and money-saving site BillShrink.com.

Over time, it will allow merchants to offer rewards to Payoff users who meet their financial targets.

Jon Stein, CEO of Betterment.com, a new online brokerage, said he believes there’s a market for sites like Payoff, which uses game dynamics and goal-setting tactics to help people stay on course. “They engage people longer and lead them to better outcomes,” he said.

Galia Gichon, a personal financial expert who heads Down-to-Earth Finance in Manhattan, said she has found Mint.com to be a powerful tool in helping her clients stick to their budgets.

But she said Payoff might make a good fit for younger people who want to be part of a community and have debts to pay. “They seem to be focused on people paying off debt, which Mint doesn’t seem to focus on as much,” Gichon said.

Whether a site like Payoff will appeal to you depends a lot on your desire to share information about yourself – Payoff does steer clear of revealing actual dollars and cents – and your willingness to link your accounts to a financial website.

To keep financial information secure, Payoff uses heavy encryption technology and does not store user names and passwords. Even so, some might be leery.

“I think the concept is great,” said certified financial planner Scott Brewster, president of Brewster Financial Planning in Park Slope, Brooklyn. “But if you are somebody who does not like to share information, this would not be for you.”

In the future, Payoff plans to add investments to the mix, but will keep things simple. “We will give you rewards for things like starting a 529 college savings plan,” Warner said. “The main thing is to offer motivation to do the smart thing.”

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