So…I feel like I’m full of ideas lately – it’s been that kind of week. Most ideas are born out of frustration, by finding a problem and saying, “Damn-it, this is annoying. There has to be a better way to do this.” This idea is no different. As always, this idea, like the others on here, is put out there for free. If there’s already a company doing it, I wanna know about it (so I can use it, since it’s an awesome idea), and if there isn’t – use it and get rich (and remember me, haha).

So, right now I’m saving money every month for three things: a vacation to Peru this summer, a down payment on a new car, and a Big-Ass TV. But I only have one savings account, even though I’m saving for these things at different rates. Every month I put money into my account so it can go into those three things, as well as just saving to save.

The money isn’t accumulating as fast as I’d like (does it ever?), but I’m getting pretty close to being able to say, “Okay, I’ve saved enough for my trip to Peru (which is the only thing that has a timeline), so now I’m going to focus on the car and the TV – the car more than the TV, since my old beater won’t last forever. I’m trying to be RESPONSIBLE here, folks.

But it’s hard. Because my savings account makes no distinction between cash I put in there for Peru and cash I put in there for a car. I try to write it down, but it seems like busywork, so sometimes I just deposit and don’t record it. But then I forget how much of the money goes to what.

I was thinking about that while checking my email the other day and I noticed that I had my inbox in Outlook all organized into folders for separate clients. I get mail and then organize it easily through a drag and drop interface. It’s slick, when you think about it.

Why can’t I do that with the money in my bank account? Why can’t I subdivide my savings account into specific folders? Better yet, why can’t I set caps, or goals, whatever, on the folders, as well as percentages that automatically divide my deposits between separate folders, at least until the “goals” on those folders are reached?

Beyond folders tied to my main savings account, why don’t banks allow people to set up “single use” savings accounts for specific things? You create an account, set a number as a goal, and deposit regularly. When the account reaches its goal, the bank lets you know and cuts you a check or helps you spend it the way you want to spend it. If you weren’t paying attention, it’d be like a holiday from out of the middle of nowhere – you reached your goal. Time to buy that Big-Ass TV.

Some people might say that this is a solution looking for a problem. I understand that that viewpoint. But the people who say that are probably responsible. They balance their checking accounts every month. They write down items in a list every time they use their debit card. They pay their bills on the first day they can instead of a few days before it’ll be late. They PAY ATTENTION.

Well, some of us don’t. Some of us get bugged for three days by their significant others to write a check for the rent, not because we don’t have the money, but because we don’t like dealing with or thinking about money. It’s anathema to us, the “dealing” part. Spending is easy. It’s like the bit in Zen and the Art of Motorcycle Maintenance when the main character says his friends just can’t groove on technology like he can. Well, some of us just can’t groove on finances, you know? Something about dealing with it hurts, so we avoid it as much as possible.

I know I should pay more attention to it. That would be the best option, sure, but failing that, I want to be able to set up a system that automatically pays attention for me. I want to be able to deal with it all in one sitting, when I’ve built up the required gumption, and then not worry about it for awhile.

So here’s how it would look: I set up a savings account with four folders. I set caps or goals on those folders, and I determine percentages for those folders. I imagine all this would be handled through some sort of web interface.
Big-Ass TV – $1400 – 15%
Peru Trip – $2000 – 30%
New Car Down Payment – $5000 – 30%
Being a Responsible Adult Who Saves – No Cap – 25%

So say that I deposit 1000 bucks a month (man, I wish. But a round grand makes the math easier) into savings and I do it every month, starting in January. I don’t have to watch it, since the system will notify me when the goals are reached, via email or something.

If I don’t reallocate the percentages once the goals are reached, but just set it up to put that overflow into the no-cap folder, here is what happens:
Big-Ass TV – $1400 – 15% – Reached in October of first year (10 months)
Peru Trip – $2000 – 30% – Reached July of first year (7 months)
New Car Down Payment – $5000 – 30% – May next year (17 months)
Being a Responsible Adult Who Saves– No Cap – 25% – $9350 (17 months)

All goals are reached by May of the year following the beginning of the savings plan. Of course, they could be reached faster if the percentages are reevaluated when the capped goals are reached, but you get the idea. I don’t want to get all caught up in the math. I just want to demonstrate it here.

So what are the advantages of this? Many.

First, it allows me to set it all up in one sitting to save for multiple things and then let the system work itself out. I don’t have to think about it every month.
Second, it helps me plan exactly when I will reach my goals by telling me how close I am to my goal, and projecting, at my current rate, when I will reach it.
Third, it encourages me to set goals, and more importantly, to save for those goals. I want to talk about that one a little more.

One of the huge problems in America is debt. Everyone is in debt, because credit is so easy to get and so easy to max out. Right now, instead of saving for a Big-Ass TV, I could just stroll into Best Buy tonight and buy a Big-Ass TV for the price of a bunch of low monthly payments.

The problem with that, of course, is that I’d be paying for my Big-Ass TV for a couple of years and I’d probably also end up paying twice as much for it, after principle plus interest. Not to mention the fact that once I get the TV paid off there are newer, awesomer (yeah, I know that’s not a word, but I like it) TVs out there.
However, if I save for the Big-Ass TV and then buy it, I’ll own it outright, pay less for it in the long run, and have the newest TV out on the market for my price when I buy it. Everyone knows that saving is a better system over credit, if you can swing it.

But it’s hard, because so many things are set up to push on your instant gratification button so companies can charge you interest and trap you with monthly payments. However, we’re a strange and multifaceted species. We get pleasure in strange ways, from strange things, and instant gratification isn’t the only thing that feels good.

Working toward a goal and then achieving that goal feels good, too. It feels like winning, and winning is awesome. People say that sometimes the anticipation of the thing is sometimes better than the thing, and while I don’t know if that’s completely true, the anticipation enhances the whole package. It’s like green beans at dinner. They aren’t better than your steak (or your veggie burger, should you swing that way), but the steak isn’t as good without the green beans, either. They both go into a good meal. That’s a pretty lame metaphor, but you see my point: anticipation by itself sucks. So is just having something unexpectedly if you don’t feel like you earned it. But together, they taste lip-smackin’ good. Smack your lips with me, folks. Yum.

Okay, so we’ve talked about how this would benefit the customers. How would this benefit the banks? Well, it’ll give them happier customers, for one. That’s a big deal, since retaining customers is an issue. But secondly, it might encourage people to keep money in the banking system for longer. If I buy a Big-Ass TV at Best Buy tonight, part of my paycheck goes to paying Best Buy every month. The money is put in and then taken out pretty quickly. However, if I save for the Big-Ass TV, that takes months – months where the money stays in the bank so they can lend it out, or whatever banks do with money that’s sitting in their savings accounts.

Certainly banks aren’t making insane interest on loans (through Best Buy) when people save instead of use credit, but the same banks making those loans might not be the same banks who have your savings account. If they aren’t the same banks, it behooves the one with your savings account to keep your money in their system longer.

Those two benefits are pretty big, but beyond that, I don’t see any impetus for banks to implement this system, because I certainly would not pay for a system like this. I get nickel and dimed enough. In the meantime, I’ll just keep track of it myself, even though it’s a royal drag.

So, I don’t feel as though a simple thing like putting folders in your savings account would fix the problems we have with credit in America. Not by a long shot. But fighting that disease isn’t one huge problem – it’s a million little problems. And putting folders into your savings account to help you work toward goals while saving your money fixes one of the small problems.

I talk about all types of problems here, both big and small. I’m getting all hippie about it, trying to improve the world, trying to make it better every day. That’s kinda half the point of the whole friggin’ human enterprise, right? (The other half is really good hamburgers, you know, when the meat is tender and the bun is toasted, with thick pickles and…anyway…)

Every little bit helps.