SANDY, Utah, Dec. 18, 2018 -- With New Year's resolutions just around the corner, Ally Bank, Member FDIC, put some of its customers to the test with four easy-to-do savings challenges designed to help overcome absent-minded and needless spending habits. The customer results showed that even the simplest of tasks that take just minutes can lead to savings.
Each of the 48 customers performed one of four challenges and on average, discovered $50 they could save. The total potential savings for all four challenges on average, was more than $200.
"We found that when consumers look at spending in smaller sample sizes – like these four easy challenges – it leads to more active saving," said Anand Talwar, Deposits and Consumer Strategy executive for Ally Bank. "Traditionally, consumers struggle with saving when asked to track spending in big categories."
Half say they would go from mindless spending to proactive saving
By becoming more aware of their spending habits, 50 percent of those who participated in the challenge said they would put the extra money into a savings account. An additional 27 percent said they would pay down debt and 17 percent would invest it. The challenge outlined four tasks to help consumers better understand their spending habits and uncover money they could be saving.
- Money Confessions – Take note of spending outside the normal budget of food, transportation, housing, utilities, etc. then try to eliminate one or two of those purchases each week.
- The Shopping Cart Challenge – Before checking out when grocery shopping, reassess what is in the cart and remove items that are a want and not a need.
- Internet Responsibly – When online shopping, don't purchase in the moment. Leave the item in the online cart, wait a day and reassess.
- Unsubscribe – Monthly automatic payments for streaming music and video services, online video games and more all add up. Take stock and eliminate something not used regularly.
Many participants found the challenges "helpful" or "very helpful" in better understanding areas where they may be spending mindlessly. One of the customers in the challenge even removed future temptations by unsubscribing to retailers' email lists.
A video produced by millennial personal finance expert Whitney Hansen also highlights the challenges consumers have being mindful of their spending behaviors as they spend money on things that enhance their social experiences like clothes, shoes and eating out.
Internet shopping challenge yields biggest savings
The challenge that netted the largest total savings was thinking twice before clicking "buy" when shopping online. In fact, on average, participants said they could save more than $70 by either not buying or waiting a day or two and finding a better deal elsewhere online.
Megan Montague, an Ally Bank customer who took part in the challenge, found that slowing down the purchase process helped her save. "Simply adding something to my cart yet delaying making the purchase enabled me to really think deeply about if that purchase was a want or a true need," she said. "In one case, delaying the purchase enabled me to find a cheaper deal elsewhere."
Look for better
An additional challenge for consumers that takes just minutes would be to double check their savings account interest rate, Talwar noted. For example, the average interest rate on savings accounts in the U.S, according to the FDIC, is .09 percent as of Dec. 17, 2018. Many of the largest retail banks have rates as low as .01 percent. Ally Bank's Online Savings Account currently is 2.00 percent. This simple change could mean almost an additional $500 in annual interest for the average U.S. savings account of $25,000.
Talwar also suggested consumers review their bank's statements for things like account maintenance or overdraft and ATM fees to uncover additional ways to save. Ally Bank does not charge monthly maintenance fees, only charges one overdraft fee per day if customers overdraft their account and provides free access to 43,000 Allpoint® ATMs nationwide while reimbursing up to $10 a month for withdrawals at other ATMs.
About Ally Financial Inc.
Ally Financial Inc. (NYSE: ALLY) is a leading digital financial services company with assets of $173.1 billion as of September 30, 2018. As a client-centric company with passionate customer service and innovative financial solutions, Ally is relentlessly focused on "Doing it Right" and being a trusted financial partner for its consumer, commercial, and corporate customers. Ally's award-winning online bank (Ally Bank, Member FDIC and Equal Housing Lender) offers mortgage-lending services and a variety of deposit and other banking products, including CDs, online savings, money market and checking accounts, and IRA products. Ally also promotes the Ally CashBack Credit Card. Additionally, Ally offers securities brokerage and investment advisory services through Ally Invest. Ally remains one of the largest full-service auto finance operations in the country with a complementary auto-focused insurance business, which together serve approximately 18,000 dealer customers and millions of auto consumers. Ally's robust corporate finance business offers capital for equity sponsors and middle-market companies.
For more information and disclosures about Ally, visit https://www.ally.com/#disclosures.