|By: Laura Walton AFC®|
Everett Dirksen, Senate Minority leader in the 60’s, is noted as saying, “A billion here, a billion there, pretty soon, you’re talking real money.” Take off a few zeros and the same is true for you and me.
When I’m working with a client to create their net worth statement, they often say “Oh, wait, I also have another savings account – I started it using this savings app.”
What app? Turns out there are several – below are the ones I’m hearing about:
Qapital: Their Chief Behavioral Economist is the well-known Dan Ariely. Their “applets” allow you to “reward yourself for good behavior, to deter bad habits, or to just turn silliness into savings”. Examples: save every time you check something off your to-do list, every time it rains (maybe not for Tucsonans), every time you go to the gym – have fun with it while your savings account grows.
Digit: If there’s money in the checking account, it typically gets spent, right? Digit is the app form of a spending intervention. It gets to know you and how you spend money by tracking your checking account and transferring money to savings based on your spending habits. Their no-overdraft guarantee offers peace of mind but know that a fee kicks in after 100 days.
Acorns: Link your credit and debit cards to this app and every purchase is rounded up to the next dollar. That spare change goes into your Acorns savings account. Their Found Money option links with lots of major retailers. When you make a purchase, the retailer puts cash in your Acorns account. Balances over $5000 pay .25% a year while lower balances pay $1 a month. Do the math – $1 a month on a small balance can be a high percentage.
ChangEd: The ChangEd app rounds up your spending and applies the spare change to your student loans – what a concept! Each month ChangEd tells you how much you’ve saved on your student loans by applying your spare change to your balance due and it adds up. Again, do the math – fees are $1 a month
I often say that wealth is built on the margins; that is, saving a little here, making a little more there. Doesn’t seem like much at the time but over the years it adds up! These kinds of apps, nothing more than behavioral tricks after all, make it painless and even fun!