Last week, I was introduced to SaveUp, a company that rewards people for saving money. Take a minute for review those last few words. I never thought I’d type anything like that. Until I learned about SaveUp, every rewards program I knew worked by rewarding spending either at a store or on a credit card. The logic behind the programs is that by giving you a reward, you’ll continue to do business with that organization. It makes good financial sense. However, rewarding people for saving money is odd and at least at first it doesn’t make much sense. I ask that you suspend belief for a bit and read on anyway.

I’ll start by giving you all the basics about how save up works. There’s a bit to know, but if you make it through I promise you 3 things:

1. a way to play a lottery with a $2 million prize for free.
2. a system for maximizing your winnings at SaveUp
3. a special offer for you, the reader of Lazy Man and Money

Fair enough? Good let’s lay the foundation so that we can get to that really fun stuff.

How SaveUp works

As I wrote above, SaveUp rewards people for saving money. The rewards are in the form of SaveUp credits. Credits can be earned for various actions on the site and in your financial accounts, which we’ll cover later. For now, we just need to understand that credits can be used to play games and win prizes (including cash) on the SaveUp website. There are three ways to play:

• Weekly Drawing – They have 5 products a week that are won raffle-style. You can choose to spend your credits to get multiple entries. Prizes are typically around $100. One prize each week is the result of the voting by the SaveUp community. This week that is a Fitbit, which I bought a little over a week ago. It is dangerously close to being the Lazy Man Product of the Year, by ironically helping him be less Lazy. Moving on…
• Instant win – Ever get a $1 scratch ticket from the lottery? These are similar to that. There are various prizes that you can win, but a lot of them amount to cash. For example, if you win the $50,000 to start your business, the people at SaveUp aren’t going to be auditing your purchases.
• Jackpot – You can put your entries in a lottery where you pick 6 numbers in hopes of winning $2 million dollars. This is like playing the lottery for free. Imagine going into your local mini-mart and asking for them to let you do that!

Playing for a prize costs 10 credits and “a play.” You get three free plays each day. You can earn more plays by inviting people to SaveUp or exchanging credits for plays. Exchanging credits for plays is expensive. It costs 100 credits for 1 play and you are limited to 5 exchanges per day.

The “play” system is very smart of SaveUp. Unless you invite others, the average SaveUp user is limited to 8 plays a day… the 3 free and 5 more that they buy for 500 credits. This allows SaveUp to not have to give prizes all the time by someone cashing in 10,000 credits for a thousand plays at once. The prizes get doled out over time based on odds of winning to the SaveUp community.

Earning Credits at SaveUp

There are a lot of ways to earn credits at SaveUp. They seem to give you credits for things like breathing and blinking. I’m exaggerating, but not that much.

The most common way to earn credits is by… saving and paying off debt. You add your savings accounts, IRAs, 401Ks, mortgages, student loans, credit cards, and “that thing your aunt gave you which you don’t know what it is”. (Okay maybe not the last thing.) SaveUp will give you credits for making payments on the debt and increasing the savings. So if you put your groceries every month on a credit card and pay it off, you will be earning credits. Add some money to your IRA and you’ll get more credits, a credit for each dollar.

This is a good time to mention the security at SaveUp. They are a new, very young company, but your financial data should be as safe as humanly possible. SaveUp uses 256-bit bank level encryption and the linking process is done through a process with Intuit, the folks who brought you Quicken and TurboTax, and bought the aforementioned Mint. SaveUp doesn’t store bank credentials or account numbers. Even though they are a new company, your data is protected by big companies and technology that is as secure as your bank.

If that’s not enough, you can also earn credits for by participating in challenges. For example, this weekend SaveUp challenged me not to spend money on one of my credit cards. No problem, I’ll just charge my other credit card. I don’t think the people at SaveUp believe that a perfect system is possible, but “perfect is the enemy of good”. In this case, what they have now is very good especially for a relatively new company.

One of the other ways to earn credits is by watching videos and answering questions about them. SaveUp isn’t just rewarding you for saving and paying down debt, but they reward you for learning. I was going to make a joke that they’ll probably send my dog a gift on his birthday too, but I just remembered that they do indeed have pair of dogs on their team and one of them is in charge of analyzing treats. Getting back to the learning aspect of SaveUp… the videos are done by my friend Bobby Lee of 2 Minute Finance. The videos are, you guessed it, two minutes long, so earning credits this way barely takes any time.

Video Watching Tip: I click on the YouTube link so the video opens in a new tab and then hit the “next button” in the SaveUp tab for the questions. I try to answer the questions before the video gives me the answers. It’s a little more fun to see if I knew it already or not.

Leveling up at SaveUp

By now, you know that SaveUp uses games and prizes as motivation for saving. Recently they added another level of motivation, the “level.” If you played any fantastic games like Wizardry, or Dungeons and Dragons, you are familiar with the concept of earning Experience Points (or XP) and earning levels. Typically, earning levels is a joyous occasion as your character earns new abilities, but at SaveUp you’ll just have to settle for a new title and a new number. Maybe someday they’ll give you more plays for attaining higher levels – one can dream.

It didn’t take me that long to gain a lot of levels. I was at level 6 in just a few hours of importing my data. Don’t mess with this savings ninja.

How Does SaveUp Make Money?

By now you are probably that very question. Many live by the saying, “If it sounds too good to be true, it probably is.” If that sounds like you, way to use those critical thinking skills. The first thing that people jump on is, “they are selling my information or other stuff that I wouldn’t like.” This is not true. Their privacy statements makes it clear they do not do this.

SaveUp gets many of its prizes donated to them via corporate sponsors. That free Virgin America flight you that Joe D. won can be thought of product placement in a movie. Virgin America gives a little back to a community that encourages good financial habits, and get a little bit of advertising, for what amounts to less than a grain of sand in a sandbox that is their marketing budget. These donated prizes keep SaveUp costs of doing business low.

SaveUp also partners with banks and white-label a version for them. Banks like this because it encourages people to stay at the bank. Customer retention is something that banks will pay for and SaveUp is happy to help them for a fee.

Finally, SaveUp may make a financial suggestion like you’d see from Mint where they get a small amount of money if you sign up for a savings account. If you aren’t interested in these offers don’t sign up for them. I personally haven’t seen an offer yet, but they tell me they are there, so I won’t argue.

How to Beat the Odds at Save Up

Now that we got all the basics out of the way, let’s get to that fun stuff. Playing games and scratching virtual tickets is fun, but I like to come up with ways to tips the odds in my favor. With that in mind, I took some time to analyze the odds of winning. After all, who wants to play a game that you can’t win?

What I did was look at each of the games that SaveUp has: the $50,000 games, the $25,000 games, the $10,000 games, the $5,000 game and the $2,000,000 jackpot. I multiplied the value of the prize by the odds of winning to determine the value of that prize. The highest value prizes are ones that give you the most money with the best odds. Then I added up the cash prizes for each game to determine the value for that game. (I didn’t factor in the potential of earning credits because I am concerned with winning straight cash homey.)

Then I did a little math to figure out if you played the game 3 times a day for 365 days how much you could be expected to win… on average. I did the same for playing 8 times (assuming you convert 500 credits for 5 extra plays each day). The results are in the table below. The $50,000 game had the best payout of all the instant win games paying an average of $17.52 if you played 3 times a day for 365 times a year. This is more or less free money. The reason why the $50,000 game is so good is because there is a 1 in 5,000 chance of winning $50. In a year of playing 3 times a day, you have over 1,000 chances making that roughly a 1 in 5 chance at $50… plus the odds of the numbers above. No other prize gives you that kind of value.

If you’ve jumped to the table below, you’ll see the jackpot is listed there as well. At first glance the $2,000,000 jackpot looks like the best value even though the odds are 1 in 170 million. However, the the fine print says that the payment is made in 30 equal annual installments without interest. For this I had to calculation the value of the prize with inflation factored in. I created another table of 30 payments of $66,666.66 and lowered the value by 3% each year to factor in the true value after inflation (the 3% was my educated estimate of inflation) . I won’t include that table in the post because it is long, but I’ve uploaded it for your enjoyment. This analysis showed me that the real value of the jackpot is actually $1,345,897 as the value of the buying power in year 30 is only around $28,290.

In rerunning the jackpot analysis with the $1,345,897 number the value of the prize doesn’t quite match the $25,000 or the $50,000 games. Thus I suggest you play the $50,000 for the best odds of winning.

That said, I wouldn’t blame you for taking a go at the jackpot. If you use all 8 plays each day for a year you’ll have 2,920 entries in that jackpot which brings the odds of winning it down 1 in 58,298. Keep in mind that per year, so even if you plan to live nearly 600 years you’d still have at best a 1 in 100 chance of winning it in your lifetime. However, in the grand scheme of things it isn’t bad and SaveUp will save you money even if you just use it instead of buying lottery tickets.

You may be wondering why I didn’t calculate the raffle drawings. I have no way of knowing of how many entries, so the odds are unknown. Thus I stay away from them.

Special Offer

At the very beginning of the article, I mentioned that I had a special offer for Lazy Man readers. Since the people of SaveUp think I’m the most handsome blogger around (or perhaps for some other reason), they’ve decided to offer my readers (that’s you), 100 free credits for signing up. They couldn’t make signing up any easier. You can connect through Facebook or just enter your name, email, and a password. In about 20 seconds you can be playing to win $2,000,000. All that stuff about connecting accounts can be done later if you choose to.

To get started and claim your 100 free credits, simply click here.

Finally, I’d like to thank SaveUp for leading me in the direction to accomplish a personal goal of mine… to link to multiple DOS-era based games that provided me thousands of hours of entertainment.