Stock investing for dummies
Saving is like eating your vegetables – you know how important it is, but probably don’t give it the attention it deserves. Maybe you make a contribution here and there, but more than likely infrequency and inconsistency has your savings goals in a rut.
Thankfully, technology has given us the ability to take personal responsibility out of the equation. Automatic savings apps are an easy, reliable and foolproof method to keep your finances in check.
Read on to learn about some of the most popular, and get your finances on the right track.
- Digit: This site links with your bank account and transfers a certain amount every day. It also gives you updates on your account and lets you see your recent charges. Digit is a favorite of top personal finance experts like Amanda Abella, Paula Pant and Jon Dulin. Abella said the app has saved her $500 in less than three months without her realizing it.
- Acorns: This app rounds up every purchase to the nearest dollar and invests the difference. It will ask you questions about your income, net worth and risk tolerance to determine what kind of investments to choose for you. For those interested in investing but afraid or unaware of how to start, Acorns is a good first step. Like other investment programs, Acorns charges a $1 monthly fee if your balance is less than $5,000 or a .25% annual fee if your balance is more than $5,000.
- Bank of America: This bank was one of the first to offer automatic savings through its Keep the Change For those who already have a BOA account, this may be a seamless transition to automatic saving. Newbies will have to open a checking account, savings account or debit card through BOA.
- Level: For spendthrifts who hate to budget, Level is a perfect app. It links to your checking or savings account and tells you how much money you can spend. It will also project your spending for the year, so you can see how much your high-end coffee habit really costs you.
- Unsplurge: Saving money can be hard without a specific goal. That’s where Unsplurge comes in. It aims to make your goals visually appealing by asking you to choose a picture to symbolize what you’re saving for. Unsplurge lets you know how close you are to your goal and also provides a community forum where you can see what other people are saving for. Talk about inspiration.
- Toshl Finance: For people who want to be more mindful of their expenses, Toshl is a godsend – but it’s not for everyone. The app will create a budget based on current expenses, but users have to enter those expenses manually. This forces devotees to come face-to-face with their spending habits. If you’re not the type of person who wants to whip out your phone every time you buy something, however, skip this app.
- Daily Budget: Aiming to simplify budgets, Daily Budget calculates how much you can spend every day. You can also plug in a savings goal so you don’t have to worry about managing your spending and savings categories separately.
- Simple: This bank works more like your personal budget consultant. The app will tell you how much is “safe to spend,” making it easy to plan your budget. You can also plug in your savings goals and the bank will automatically transfer money so you can reach your goals easily.
CFP Ben Wacek of Wacek Financial Planning said that he understands the popularity of these apps, but doesn’t think they work for everyone.
“For those who are closely following a budget, these automatic savings apps can actually do more harm than good because it can throw their budget off and make it harder to track,” he said.
In other words, don’t automatically assume you’ll benefit from using one of these apps. They can be endlessly helpful – especially for young, tech-savvy people – but are generally aimed at those who want to casually manage their finances. If you’re a penny-pincher, a more hands-on approach is probably best for you.
But if you aren’t the type of person who wants to budget carefully, these apps can help. Let them do the heavy lifting for you, and start working smartly towards your goals.
Do you use automatic savings apps? Why or why not?
– stock investing for dummies