One of the best ways to save money is to do so without thinking about it. Even small investments made over a long period of time can have substantial results. Digit is a service that builds your savings automatically. Plus, it figures out the best amount to save each day so you won’t miss it.
When To Save and How Much
Digit’s motto is “Save money, without thinking”. One of the biggest challenges to saving is just doing it. The only way to save money over time is to set up some sort of automatic process so it just happens.
The other key is to save an amount that you won’t miss. If you keep dipping into that savings for expenses here and there, it defeats the entire purpose.
What’s cool about Digit is that once the quick setup process is complete, it makes tiny daily transfers from your checking account into the Digit savings account. The amount that it withdraws each day is calculated based on your spending habits and outstanding balance over time.
Drip, Drip, Drip
The idea is that these daily drips into your Digit account are so small that you won’t notice that they’re being saved. Over time, those drips add up. As the balance in your Digit account grows, you’ll become more comfortable with saving. It’s also a great motivator to realize that you all of a sudden have saved money, and it’s not affecting your daily lifestyle.
Where’s My Money?
When Digit makes its daily withdrawals from your checking account, they go into your Digit savings account. This account is managed by Digit. You don’t have to set up your own savings account anywhere.
The Digit savings account is FDIC insured for up to $250,000, just like at a bank.
At most banks, you are limited to the number of withdrawals you can make from a savings account each month. There is no limit with Digit. The goal of Digit is to let it accumulate those savings over time, without thinking about it or taking from it. However, you can transfer money from your Digit account back into your checking account as often as you wish, at any time.
Communicating With Digit
Digit communicates with you via text. While there is a website, as well as iPhone and Android apps, texting Digit is super simple. Each day, Digit will text you an update on what was withdrawn from your account. It will also let you know the balance currently in your Digit savings.
If you want to transfer money from Digit back to your checking account, just text “Withdrawal” and the amount. The money will be back in your checking account by the next business day.
There are other commands that let you tell Digit to be more or less aggressive with how much it saves. You can also pause savings, or set savings goals.
The Fine Print
Signing up is free, but after the first 100 days, there is a $2.99 per month fee for the service. There is a 1% annual cashback bonus on your Digit savings, which can help offset some of those fees. Digit will also deposit $5 into your account for every friend you sign up using a referral link.
Get Into The Savings Habit
Saving money is often a major financial challenge. Even saving a small amount on a monthly basis can throw people for a loop. While banks have automatic savings plans, people often feel intimidated by trying to figure out the right amount to save.
A automatic savings app helps make the process painless. Once you set it up, and realize that you’re saving without breaking the bank, saving becomes a habit. After a few months, realizing that the savings are just happening is very rewarding.
Give It A Try
Digit is easy to set up and try at digit.co. It’s simple to cancel and get your money back if it doesn’t work for you. If you do try it out, give it at least 30 days or so. Fitting a regular savings routine into your life can be a major achievement and lead to more financial success!