Trying to reach financial goals on your own without the support of a spouse, friend or family is very difficult. You’ll have much more success when you reach out to them for help, than if you try to do it alone. This is the idea behind the Gifts Registry from Betterment.
I’m already a Betterment customer and fund my Roth IRA and other investing accounts with them, so when I heard about this new feature I was very excited! I’ve been feeling a little lost trying to live a life after debt, so this new goals feature is the perfect opportunity for me to get back on track.
Betterment Gifts is a registry-type site that allows your friends and family to make cash gifts towards a Betterment investing goal of your choice. While this can be used to save for major life events like graduations or weddings, it can be used by anyone with a Betterment account for any kind of goal.
For example, you may have a Betterment goal of retirement in 30 years, and Christmas is coming up. But you’re tired of the same old sweaters, coffee mugs and books. Instead you decide to set up a Betterment gift registry for Christmas. Now, your entire family can contribute to your retirement goal in just a few clicks.
What makes Betterment Gifts different?
- Unlike a plain cash gift, your gift is invested in your Betterment portfolio
- Gifts are aligned with life goals – planning for a new family, getting higher education, retirement
- There’s no additional fees! The only fees paid are the regular account fees
- Gift recipients can create a customized “thank you note” to email to anyone who gives a gift
- Givers contribute to Betterment goals via credit card transactions, with no related fees
- The Gifts platform is simple and intuitive, just like a regular Betterment account
Once the assets are invested into the customer’s Betterment account, they are subject to the normal annual fee of 0.15% – 0.35% of assets under management. This is well below the industry average of 1% for a fully managed investment account.
Setting Up a Betterment Gifts Registry
In about 10 minutes you could have your registry set up and it’s own custom URL for friends and family to see. You start by clicking “Create Your Registry” which will ask you to create a Betterment account (or log-in if you’re already a customer). If you sign up through my link you can get a $25 bonus for opening an account, which gives you a head start on your new goal!
Once you’re signed in, it only takes about a few minutes to complete the process. Next, divide your goals into manageable dollar amounts so your loved ones can easily contribute as much or as little as they want to your goals.
Then once the money is contributed, it goes under management in the recipient’s Betterment investment account, where it can grow as the money is invested. You describe the event, and enter the information about your hoped-for gifts. Make sure to save your registry and set it as “public”.
Once you set up your new registry with Betterment, you’re ready to start reaching your financial goals even faster. Here’s how:
1. Create personalized goals
There’s no way I would have been able to accomplish my big financial goals, like becoming debt free in 14 months, or starting a successful blogging career, if I didn’t set personalized goals for myself. It’s important to be specific with your goals, but remember to have fun with them!
Things like a summer abroad, a wedding registry or planning for a new baby, will make saving for your goal that much enjoyable. Which means you’re more likely to reach your goal even sooner than you originally anticipated.
2. Share your goals online
Sharing your goals on Twitter, Facebook and via email will make you accountable to a larger audience and gives you a bigger support system. This kind of positive peer pressure is good for you, because anything announced in public has a much higher chance of actually getting done.
Why? Because nobody wants to be a failure in the eyes of their peers, so you’ll work harder and faster towards your goal than if you keep the goal to yourself.
3. Ask friends and family to contribute
Anytime you have a birthday, an anniversary or a special holiday, instead of asking for regular gifts or gift cards from your friends and family, ask them to contribute towards your Betterment Gifts Registry. If a handful of people give $25 towards your goal, you’ll see much more rapid progress.
4. Watch your investments grow
Each one of your friends and family’s contributions is added into your Betterment investing account, so it continues to earn interest over time. That’s the best kind of gifts anyone can give you!
It’s an investment into your future and the gifts keep on growing and giving as they earn the returns of the market toward your long term goals. What could be better than that?
5. Give yourself a gift
While it’s nice to get help and support from others, reaching your financial goal doesn’t have to depend on other people. If your loved ones help you along the way, that’s an added bonus.
But in the end you’ve got to give yourself the biggest gift of all by saving for your future. If you choose to fund your Betterment account on a consistent basis and you’ll reach financial freedom that much faster.
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