Here’s How to Get Rewarded for Saving Money
Saving money can be challenging. If you do save, it seems like an emergency always comes up as soon as you reach your savings goal. If you’ve been having trouble padding your nest egg, you’re not alone. A recent Bankrate survey found just 39% of Americans would be able to pay for a $1,000 unexpected expense from a savings account.
However, a new app is available that could help you stick to a savings plan. The Grand app is set up so you can win prizes for saving money. The Cheat Sheet spoke with Grand’s founder and CEO, investment banker Matt Cohen to learn more about the app and get some tips on how to turbocharge savings. Here’s a peek into our conversation.
The Cheat Sheet: What prompted you to produce the Grand app?
Matt Cohen: In my normal course of reading I came across two terribly sobering stats in back-to-back weeks: 1) 70% of the country has less than $1,000 saved. 70%! And 2) Americans spend $75 billion on lottery tickets every year. This is a staggeringly large number. It’s more than we spend on all forms of entertainment combined (sports, movies, TV, etc.) and it means that the average person spends more on lottery tickets than he spends on milk.
As someone who spent the last 10 years as a venture capitalist investing in companies using business levers to solve social problems, those two stats sent me out dreaming of a way to encourage people to save. Eventually it hit me… “a can’t lose lottery” could be a big idea and help a ton of people.
CS: How can app users win prizes?
MC: Every dollar a user saves is an entry into our weekly cash drawing. We make saving to Grand as simple as possible. A user connects her existing bank account (we connect to any bank account in the U.S.) and sets a weekly amount to save. The amount is changeable at any time and our users can always withdraw their money. Our drawings are every Friday at 2:00 p.m. eastern standard time. We have one grand prize winner and thousands of additional winners.
CS: In your opinion, why is saving so hard?
MC: It’s nowhere near as fun as spending. The payoff is way into the future, so there is no instant gratification. Meanwhile, buying a latte, a pair of shoes, or a scratch-off ticket is fun now!
CS: What are some of your best tips for saving money?
MC: Set it and forget it. Automate your savings so the money is gone before you have a chance to spend it. Either use Grand or find some other way to make saving fun, because, by itself, saving is as fun as going to the dentist.
CS: Where do you hope to see your company in five years?
MC: We’ll be giving away very large, life-changing, weekly cash prizes as well as bonus prizes to help people with other problems they face, like paying off their student loans.
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