As a young adult, nearing 30, and as a public school teacher… I understand how hard it is to build any type of long terms savings. I even just had my very first meeting with an Edward Jones investment guy! Time to really get to work saving money for retirement, but in the mean time, that is why I work so hard on my house – sweat equity. Someday, I am hoping a couple of these house projects will pay off in resale value.
However, I have also been researching a few different ways to save dollars that might seem unorthodox or weird. I am writing this post based on how I personally feel about these apps – not because I have been asked to write it.
1. The first, and the one that has surprised me the most, is the Digit App. Digit is an app that monitors your accounts and sneakily, without you knowing, takes a little bit of money here or a couple of bucks there, and sticks it into a rainy day savings account. They text you daily updates about what your checking account balance is from your bank, they let you know if something big happens like – if your mortgage payment finally clears or if your paycheck just hit your account. It is wonderful.
I have been using digit since September, 2016, and have saved over $1,050.00 without even realizing it!! They don’t take out money if you’re having trouble, and you can stop their process; I paused the service during the holidays. It is incredible. Now, even though I have researched them, I made the personal decision to transfer funds to my “real” savings account (the one with my bank) each time my Digit savings account hits $500.00.
Digit only costs $3.00 a month. Check them out and do some of your own research… but trust me – my savings account just got fatter.
2. The second is equally interesting, though it doesn’t have such a mightily immediate return. It is called Acorns. It is an investing app. If you use a debit card and make a purchase that is… for example: $9.67 it will take the $.33 and invest it into a portfolio for you. It just rounds up change to the nearest dollar and invests it. Again – you’ll never miss 33 cents… Now, I’ve been using this app for about the same amount of time, since September, and my portfolio is now at about $240.00. Pretty small. You can choose to add more money as you see fit in increments of $10, but when you think about it – since this is just using my spare “digital change” as it were, that isn’t too shabby. At least I have a chance to see some teeny, tiny growth.
You also have the opportunity to choose the “risk” profile of your portfolio. I am currently on the lowest risk model because I still don’t feel confident enough, even with my measly $200 to do much else. However, as I continue to learn and grow, we will see how I do! Take a look and research for yourself!
3. The last thing I will mention here is a portion of the Dave Ramsey method of saving money and managing debt. I may write something up about him later, but you could just Google his methods and learn a lot more. He also has a radio show and tons of books! However, his envelope method of spending is great. I do it myself! What you do is you create an envelope for each of your major areas of spending outside of bills you pay online. An example list would be: gas, groceries, take out meals (including coffee, or in my world, tea!), extraneous fun, etc.
Once you’ve made your list, you determine how much money you can, or should, spend on each category. Then once your paycheck hits your accounts and any ordinary bills are taken care of, you draw cash out of your account to place in each envelope that has been appropriately labeled.
The rule is… You are NOT allowed to go over the amount in each envelope for each category. If you spent all the money in your ‘take out meal’ envelope for that pay period, you’re eating at home until your next paycheck. I make it like a game – I see how much I can leave left over in each envelope each pay period! You’ll be surprised at how much money you save. What I do is I take the left over money and I put it into a completely separate envelope to be deposited once I’ve hit a certain goal. Or if I’m saving for something in particular, I will only use that money to save for that item.. it is super great!
Those are just a few Money Hacks that work for THIS young adult! I have a few other super simple ones, but I’d love to hear yours as well!!