Saving money is important – not only for the future but also for the rainy days. This holds true especially in the post-pandemic world today when the survey data recorded shows an unemployment rate of 14.8% (April 2020) – the highest since the last survey done in the mid-20th century.
With the precariously balanced economic systems hit by COVID-19, people now realize the importance of building up a rainy-day stash. Thankfully, the pandemic has also pioneered revolutionary innovations in technology, which have also found their way into the financial management universe.
This has birthed a few highly efficient, goal-driven, mobile phone-based applications that automatically help users save money.
Why Automate Your Savings?
The classic way to save money – tried and tested since the time of great-grandparents – is to secretly hide away little amounts of cash whenever you can. While some people still practice this method, it seems to be losing its relevance in the digital world. Millennials (and every generation that came later) rarely ever participate in cash transactions.
With the money world going digital, it makes sense for savings to do the same, too.
Automatic savings apps can cure your forgetful habits of stashing money away for the tough days by automatically doing that as you are spending.
Some apps are programmed to make payments rounded-off to the nearest whole number and save away the “change” you would receive if the transaction were done in cash. This is only one form of automatic savings done through applications.
Many other methods exist that help you save money automatically with every expenditure incurred. Automatic savings apps are the smart way to save money today.
7 Best Automatic Savings Money Apps
Each app listed here has its own unique features to help you save as much as possible. The trick lies in selecting the one that best resonates with your spending habits and nature of expenditures.
First launched in 2015, Digit started out as an SMS-based chatbot that targeted the millennials to help them save money. Today, it is a full-fledged app with automated savings features.
Digit is a smart one — based on your transaction history, this app can draw up estimations of your future expenditure. It automatically relocates anywhere between $5 to $50 about every 3 days into your Digit Savings Account. Withdrawals are easy and done via sending a text message to Digit, wherefrom the specified amount is transferred to you from your savings.
This app is a great fit for someone who does not have any savings system in place or cannot be bothered adding another task to the list. Busy people with little time for saving money can leverage Digit to sail them through this. However, Digit is a paid app, and quite a few people find it hard to keep the subscription alive with the kind of returns it generates.
Digit allows a 0.1% “savings bonus” annualized and paid quarterly and a 30-day free trial.
Acorns is a hybrid platform that not only helps its users save money but make money, too. The true concept of “spare change” is digitized by Acorns in a highly discreet way. For every transaction a user makes through Acorns, the app rounds the amount up to the nearest dollar, putting away the “spare change” in savings.
The app then does something amazing – it invests this money into low-cost ETFs. This is what makes Acorns a popular app. Its savings-investments hybrid model helps its users dabble into the financial trade market in a controlled manner, eliminating the risks.
The user has the flexibility to select the ETFs they want, based on the ones that Acorns trades in. The best part about using this app is that you don’t need to monitor or adjust the funds invested in the ETFs. Acorns does that automatically whenever the value of your savings reaches $5. Additionally, Acorns also allows you to set up a recurring investment system.
Acorns is a highly suitable app for those who want to save and invest simultaneously but don’t have enough time to understand the trading market. Letting Acorns invest in the ETF sector for you is a good start for bigger things down the line in the future – by then, you will have amassed enough funds through Acorns!
The subscription costs anywhere between $1-5 a month based on the portfolio you select.
3. Empower Finance
Those looking for a well-rounded application to manage their personal finances will find Empower to be of great use. This app is a convenient platform to create a big picture of your finances and see a clear roadmap of where it is going.
Empower Finance connects with your bank account and draws up information on:
- Bills and bill cycles
- Debts and loans
- Income and credits
Using this data, Empower creates a “picture” of what your financial health looks like. The app then automatically sets apart spending budgets based on the kind of expenses you make through the accounts linked to it.
This app also helps you set money aside to handle the debts and loans you may be struggling with. You can easily track your spending and also put some money into the savings kitty with this app.
Empower Finance is a good application for users just venturing into finance management; the functionalities are intuitive, easy to follow, and, quite frankly, basic. As a result, they hold good for the novice user – that being said, people who already track their finances may find Empower rudimentary.
Empower Finance is free for the first 14 days, post which you will be charged $8 per month.
For users who want to have control over when and how much amount gets put aside for savings, Qapital is the app. Its rule-based savings system allows users to decide which expenditures trigger a savings event and what the amount would be. The rules can be anything; for example, Qapital can be programmed to save $10 for every $50 spent on shopping.
Qapital finds great favor with users that wish for a more goal-oriented savings system. For example, if you have a goal to amass $1,000 by the end of the year, you can use the “Goals” feature of the app to set aside a small amount of money into this goal, triggered by a spending action as described above.
You can even have multiple “goals” running at the same time following different rules.
This app helps users save smartly and simultaneously for different purposes. It also helps the users make prudent decisions on spending and withdrawals, seeing how its budgeting features allow good financial management.
Qapital is a membership-based program and is available on trial for free for 30 days. Post this period; users can choose a plan based on the functionalities they need. After that, the plans cost anywhere between $3-12 per month.
Chime is changing the way banking works. Primarily for those with tight finances, Chime makes perfect sense. While other banks charge a fee for minimum and maximum balances, overdrafts, foreign exchange, and maintenance, Chime sets its users free from this.
This makes total sense for the young population just starting out fresh in the real world without a penny to their name. Chime requires no minimum fee to start an account and also offers easy transfer capabilities to pay bills. It has all the basic functionalities to get a person started in the world of banking and finance management.
One very attractive feature that Chime offers is the SpotMe program, where an overdraft of up to $200 can be availed fee-free. In addition, once the negative balance is paid for, the user gets the option to tip Chime some money – which is a healthy alternative to forced fees.
Chime follows the standard round-up-to-the-nearest-dollar rule to initiate a savings event in your account. It is rewarding, too, with a 0.5% APY. Additionally, users can also opt for a second saving method: Save when I get paid. Finally, Chime can be programmed to automatically put a 10% chunk of your income into your savings stash as soon as your paycheck comes in.
There is no membership fee required to join Chime. It aligns perfectly with their fee-free finance management experience.
6. Keep The Change
Keep The Change app was started by Bank of America to offer its account holders an automatic savings option. It does exactly what it says: it keeps the change in a savings account for you.
When you make a transaction using your BofA credentials, the amount gets paid in whole figures. The change you would otherwise receive, as in cash transactions, gets deposited into your savings.
This app allows automatic savings. However, you need to be an account holder at the Bank of America to register on it. This makes it problematic for new members to join the band. But since it is a bank that belongs to an actual bank, the assurances and guarantees are all more reliable.
If you already have an account at the Bank of America, you won’t need any other financial management app to look after your automated savings or budgeting. Keep The Change can handle all of this for you. Additionally, for BofA members, the transition into this app is more seamless and definitely an upgrade.
Mint is a powerhouse application that is meant for a no-nonsense kind of user. If you are working with multiple checking accounts and would like to see them all in one place, Mint is the right application. It can:
- Integrate multiple accounts at the same time
- Categorize all your transactions automatically for better visibility
- Predict spending patterns and habits to create graphs and a big picture for budgeting
- Generate its own budgeting strategies if you don’t want to do that
Mint is a highly secure app – you need a password to access it. In case of a misplaced device, the app can be deactivated through the Mint website for added security and prevention of digital robbery.
The way Mint creates visual representations of your financial data is beneficial in fixing bad spending habits – because seeing is believing. At the same time, the human brain cannot understand numbers all that clearly; seeing those numbers in graphical forms works as an eye-opener.
If you have multiple accounts to track and no time, Mint is for you. Mint is free to use; however, a premium version with credit functionalities costs $16.99 a month.
The Automated Savings Benefit
Making money is important, and saving it even more so. Savings enable you to prepare for the rainy days or your future and your dreams.
The way an automated savings system works is that it treats your money saved as just another expense, bringing it up on the priority list. What you see as going out as an expense turns up years later as the money you saved over time.
Automated savings actually utilize a “pay yourself first” philosophy when put to work as soon as the paycheck comes in. They enable you to see your paycheck with a certain amount relocated from the get-go into your savings.
It helps to plan expenses better while still letting you save. For example, if you are CPA certified or preparing for CPA certification, you can work on your own terms and dedicate a portion of your fee towards automatic savings.
The Bottom Line
Automatic savings apps are paving their own niche – and it looks like they will be the future of financial management. Many intelligent apps employ the power of AI and ML to deliver deeper and more meaningful insights into a user’s financial life, thus helping him make informed decisions and still plan a financially stable future.
Downloading an automatic savings app is the new, millennial way to look at managing your money. If you think of supplemental income, redirecting it to your automatic savings will help you prepare for a better future.
These apps are especially appealing to millennials and Gen Z because they are precise, no-frills, and result-driven.