Compare your financial well-being to your peers and prosper.
That's the idea behind a new company, Status Money, that allows users to see how they are doing compared to others, according to Forbes. Participants in the social status site lowered their average spending by around $600 per month, according to Status Money.
The idea for the service started when its founder, Majd Maksad, discovered that during the Great Recession Americans still spent about the same as they had before the economic downturn. Any slow-down in spending during the Depression was because of unavoidable bankruptcies and foreclosures rather than any intentional savings by the population. That was counterintuitive since, during an extreme financial decline, researchers expected to find people behaving more frugally.
Maksad speculates that people will behave better financially if they can compare themselves to peers. His new site lets people see how their peers spend, take on debt, and accumulate wealth. For example, a teacher in Boston can see how he or she compares to other teachers in the area. The service will also analyze a user's financial data to determine areas of opportunity like saving money on fees or earning more interest in a savings account.
That could be helpful information, but to get it, users have to enter all their banking, investment and credit card information, including passwords and balances — a long process and a daunting security risk.
