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Apache is functioning normally

December 5, 2023 by Brett Tams

It’s a common problem.

You’ve got some cash in a savings account earning a paltry 0.01%. You plan to spend it to buy a home or a car or something else in a few years. How can you invest the money until then to earn some extra interest?

It’s called short-term investing, and it’s tricky. Put your money in the stock market, and it could be gone when you need it. Put it in a traditional savings account, and it earns practically nothing. So, what should you do?

Recently, a listener to our podcast, Michael, emailed me with just this dilemma:

Let’s answer Michael’s question.

What is a Short Term Investment?

What exactly is a short-term investment? Well, there is no official definition. There is no governing body that defines what short-term or long-term investing is. It’s arbitrary.

For me, short-term investing is investing money you’re going to need to spend in fewer than five years.

Why five years? Because most of the time, the stock market doesn’t lose money over a 5-year period. It can, of course. Go back to the 1930s and 40s and you’ll find 5-year periods where the market was crushed, as this Bankrate slideshow demonstrates… 1932 was the worst. The 5-year period ending that year saw a drop of 60.9%.

But that’s rare.

When we have a pretty significant stock market correction or a bear market, it usually takes us at least five years to pull out of it. Of course, that’s not a guarantee. We could hit a bear market, and it could take us 10 years to pull out of it.

Either way, five years is where I draw the line. You may want to draw your own line more conservatively… or even less conservatively, for that matter. What I hope to do today is give you some information that will enable you to make a sound decision.

So, let’s begin.

The 10 Best Short Term Investments

1. Lending Club

Lending Club offers a great option with the potential for better returns. This P2P lending platform makes it easy to invest in loans to individuals and companies.

It’s also perfect for short-term lending. Loans on the platform are for either three or five years. If you know you won’t need the money until then, Lending Club is a reasonable alternative.

I’ve invested in Lending Club loans since the platform was first launched. My current annualized return, including loans that defaulted, is over 8%.

With higher returns, however, comes higher risks. Loans do go into collections and eventually default from time to time. Over the years, I’ve invested in 17 loans that defaulted.

The key is diversity. You can invest in a loan with as little as $25. By diversifying across many loans, you minimize the effect a single default will have on your portfolio.

LendingClub Pros and Cons

Very easy to invest in a diversified loan portfolio
Potential for high returns on a short-term basis

Not FDIC-insured
Cannot liquidate the loans early
Potential for losses

Expected Annual Return: 5.00 to 7.00+%

Read more: Lending Club Review

Lending Club Disclaimer:

2. Certificate of Deposit

The second option for short-term money is a certificate of deposit. CDs give us a lot more options than a savings account. The term of a CD can range from a few months to more than five years, and the longer the term, the higher the rates.

These higher rates, however, come with added risk. Here’s why.

A CD can be cashed in before it matures. For example, you could invest in a 5-year CD, but decide to withdraw your money after the first year. If this happens, however, most CDs charge a penalty. The amount of the penalty varies by bank and CD product.

As a result, it’s best to keep money in a CD until it matures. For this reason, picking the length of the CD is a critical decision.

So, you end up having this delicate dance- you want a long CD term so that you can make the most interest. But you don’t want to pay a penalty if you take the money out early.

CD Pros and Cons

FDIC insured
CD terms ranging from 6 months to 5 years or longer
Higher interest rates on longer term CDs
Can create a CD ladder

Still relatively low interest rates
Penalty for early withdrawal

Expected Annual Return: 1.00 to 2.50%

Here is a list of banks that offer high-yield CD options:

3. Investing With Betterment

Betterment presents an interesting opportunity for short-term investors. It’s not an investment. Rather, it’s an online company that makes investing in stock and bond ETFs easy.

The service can be used for all types of investing, including long-term retirement investing. To use Betterment in the shorter term, you must get the asset allocation right.

Learn More: The Perfect Asset Allocation Plan

Betterment lets investors decide how much to put in stock ETFs and how much to put in bond ETFs. For short-term investing, a 50/50 allocation protects against the downside while allowing for potentially higher returns.

Here’s the 50/50 asset allocation with Betterment:

The 50% in stocks gives us a chance to earn greater returns. The 50% in bonds helps protect short-term investors from a market crash.

There are no guarantees, of course. But looking at a 50/50 portfolio during the 2008-2009 market crash gives us some comfort.

Using PortfolioAnalyzer, I assumed we invested $10,000 at the start of 2008. Assuming we needed the money three years later, how would our 50/50 portfolio perform over a 3-year period. Remember that in 2008, a total U.S. stock index fund lost more than 37%.

Here are the backtested results of our 50/50 portfolio:

The portfolio still lost money in 2008, although far less than the 37% that the market dropped. And what was our final portfolio value at the end of 2010? It grew to $11,014, for an annual return of 3.27%.

While 3.27% is not a great return, remember that 2008 was a very bad year for stocks. Shift our time period one year forward (2009-2011) and our annual return jumps nearly 11%.

As a result, a 50/50 portfolio with Betterment is a reasonable choice for those needing the money in three to five years.

Betterment Pros and Cons

Very easy to implement
Money can be withdrawn at any time
Potential for much higher returns
Fees are very low

Not FDIC-insured
Potential for capital losses

Expected Annual Return: 0 to 10+%

Learn More: Betterment Review

4. Online Savings Account

Traditional banks pay as little as 0.01% on a savings account. That’s as close to zero percent as you can get.

One option for short-term savings that pay more is to go with an online bank. While the rates are still nothing to brag about, the top online savings accounts today pay about 0.50%. Chime® is now paying an APY of 2.00%, which is right in line with the best online savings accounts available. Chime offers a terrific online savings and checking account geared toward savers. You can see the top current rates here.

Online Saving Account Pros and Cons

FDIC insured
Funds can be withdrawn at any time
Rates better than a brick and mortar bank
No monthly fees

Interest rates are still low
Inflation exceeds the rates

Expected Annual Return: 1.30%

Here are some high-yield savings account options:

5. Municipal Bonds

There is a significant downside to bonds: taxes. Interest earned on bonds is taxed, as are any capital gains.

One option to reduce the tax burden is municipal bonds (known as “munis”). These bonds are typically free of federal income tax and may be free from state income tax, too. Munis are an excellent option for those in the higher federal tax brackets.

I’ve invested in Vanguard’s Intermediate-Term Tax-Exempt Fund (VWIUX) in the past. SEC yields on these funds are lower than similar taxable bonds. The comparison must be made on an after-tax basis. This fund currently sports an SEC yield of almost 2%.

Municipal Bonds Pros and Cons

Potential for higher returns
Tax advantages
Easy access to funds without penalty

Potential for losses
Not ideal for those in lower tax brackets

Expected Annual Return: 2 to 5% (after tax)

6. Short Term Bonds

Our third option is short or intermediate-term bond funds. More specifically, we want to look at low-cost index mutual funds and ETFs. Both Vanguard and Fidelity offer several options.

Here, you have some important choices to make. Do you want a fund that invests just in U.S. government bonds or one that also invests in corporate bonds? Do you want a short-term bond fund or an intermediate-term bond fund?

Like everything else in life, these choices involve trade-offs.

U.S. Government bonds are more secure than corporate bonds, but they pay less. Short-term bonds are less sensitive to interest rate fluctuations than intermediate-term bonds, but they pay less. Today, short-term government bonds do not pay much more than an online savings account. For example, the SEC yield on Vanguard’s short-term Treasury fund is just 1.25%.

For my money, I want to do better than that in a bond fund. While intermediate-term funds can lose money in a given year, they are reasonably stable. Vanguard’s Intermediate-Term Bond Index Fund (VBILX), for instance, costs just 0.07% and sports an SEC yield of over 2.50%.

A review of the performance of VBILX shows that it lost money in only one of the past ten years:

Short Term Bonds Pros and Cons

While not FDIC-insured, still reasonably secure
Intermediate-term bonds can yield significantly higher rates than a savings account
Money can be withdrawn from the fund when needed

Not FDIC-insured
Can lose money
Rates are historically low

Expected Annual Return: 1.00 to 6.00%

7. Bulletshares

There is a downside to traditional bond funds. They can experience capital losses as funds sell some bonds to buy new ones. If interest rates have risen, the fund incurs a loss on the sale of bonds.

Enter Guggenheim’s Bulletshares. These ETFs combine the potential returns of a bond fund with the fixed maturity of a CD. I first learned about Bulletshares from Jeanne J. Fisher, MBA, CFP, CPFA of ARGI Financial Group.

Traditional bond funds continue in perpetuity. The fund management regularly sells bonds as maturities age and replaces them with new bonds with longer maturities. In contrast, Bulletshares have a defined term of one to ten years.

At the end of the term, assets are returned to existing shareholders. And unlike CDs, a shareholder can sell his or her ETF shares at any time without penalty.

Related: What Are ETFs (and Are They a Strong Investment Option)?

Bulletshares come in two flavors: (1) corporate bonds and (2) high-yield corporate bonds. The first invests in investment-grade corporate bonds. The second buys bonds issued by corporations with a credit rating below investment grade. It involves more risk but offers higher returns.

As an example, the Guggenheim BulletShares 2020 High Yield Corporate Bond ETF has a current yield to maturity of over 5%.

Bulletshares Pro and Cons

Potential for higher returns
ETF shares can be sold at any time
Fixed maturity dates

Not FDIC-insured
Funds can lose money

Expected Annual Return: 1.50 to 5.50%

8. Wealthfront

Like Betterment, Wealthfront is a robo-advisor that makes investing easy. I list it here in addition to Betterment for one reason: It’s free.

Well, it’s free for your first $5,000 if you sign up using a DoughRoller link. After that, the cost is similar to Betterment. For both, you pay the very low fees charged by the ETFs. You also pay a Betterment or Wealthfront fee of about 25 basis points.

With Wealthfront, however, the 25 basis point fee is waived for the first $5,000.

Wealthfront Pros and Cons

Very easy to implement
Money can be withdrawn at any time
Potential for much higher returns
Fees are very low

Not FDIC-insured
Potential for capital losses

Expected Annual Return: 0 to 10%

Read more: Wealthfront Review

9. Worthy Bonds

Worthy Bonds offers you an opportunity to earn 5% on your money, with an investment of as little as $10. It’s a peer-to-peer investment site, where you can invest money in bonds issued by small businesses. The bonds aren’t guaranteed by a government agency, like FDIC, but many of them are collateralized by business inventory.

When you use the Worthy Bonds mobile app, you can automatically add funds to your investment account. Similar to many micro-savings apps, Worthy Bonds uses spending round-ups to move small amounts of money into your investment account as you spend. For example, if you pay $4.10 for a cup of coffee, the app will charge your account an even $5. $4.10 will go to pay the merchant, and $0.90 will go into your investment account. Once you accumulate an even $10 in round-ups, the funds can be used to purchase a bond.

Worthy Bonds Pros and Cons

Invest with as little as $10
An investment of $1,000 can be diversified across 100 different bonds
Interest is credited weekly
There are no fees charged on your account
Earn interest at more than twice the rate of inflation

Pays simple interest only, and does not compound for higher returns
The maximum investment is not more than 10% of your net worth or annual income, or $100,000

Expected Annual Return: 5%

Read more: Worthy Bonds Review – A Worthy Investment for Everyone

10. SmartyPig

The final investment option on our list offers an interesting twist to online savings accounts. SmartyPig combines a high yield with savings goals. As of August 2018, SmartyPig currently offers a high yield savings APY of 1.55%.

Now, the savings goals. With SmartyPig, you set specific savings goals. You can set multiple goals, or just one. You then add to the account until you reach your goal. In this way, SmartyPig is ideal for short-term savers.

Related: 6 Keys to Setting Financial Priorities

SmartyPig Pros and Cons

FDIC-insured
Potential for returns higher than most online banks
Makes saving for a specific goal very easy

Low rate compared to other options

Expected Annual Return: 1.00+% (depending on account balance)

Is the Stock Market a Good Place for Short-Term Investing?

We could stop here. After all, the above short-term investing options should cover most situations. Yet many will ask one remaining question: Why not just put all our money in the stock market?

It’s an understandable question. Particularly when the market is rising, missing out on money can be painful. It’s funny, though. Nobody asks me this question in a bear market.

And that’s the point. With the stock market, you can lose money over a short period of time.

Thinking Long Term: Sweat In Up Markets So You Don’t Bleed In Down Markets

Let’s return to 2007 and run a test. We’ll use the Vanguard S&P 500 index fund as a proxy for the market. And we’ll assume we have $10,000 at the start of 2007, that we’ll need to use in three to five years.

How would a $10,000 investment have performed? At the end of three years, we would have $8,395, for an annual return of -5.66%. At the end of five years, we would have $9,837, for an annual return of -0.33%

Yes, 2008 was a bad year. But again, that’s the point. Investing 100% of short-term money in the stock market presents a significant risk of loss of capital. Fortunately, we have better ways to invest for the short term.

Public is an app that helps you invest in individual stocks, even if you don’t have much money to commit. What makes it good for short-term investments is its lack of fees. There is no commission to buy or sell a stock so you can move your money in and out of the market at will without worrying about minimum investment terms. Read our Public app review

How to Manage Your Short Term Investments

Track and Analyze your Short-Term Investments for Free: Managing investments can be a hassle. You may have multiple IRAs, multiple 401ks, as well as taxable accounts. And then there are bank accounts. The easiest way to track and analyze all your investments, regardless of where they are located, is with Empower’s free financial dashboard.

Empower enables you to connect all of your 401(k), 403(b), IRAs, and other investment accounts in one place. Once connected, you can see the performance of all of your investments and evaluate your asset allocation.

With Empower’s Retirement Fee Analyzer you can see just how much your 401k and other investments are costing you. I was shocked to learn that the fees in my 401(k) could cost me over $200,000!

Empower also offers a free Retirement Planner. This tool will show you if you are on track to retire on your terms.

If all of this is overwhelming and not something you want to handle on your own, you may want to think about working with a financial advisor or investment advisor. We suggest visiting Paladin Registry, where you can fill out a form online to tell them what you are looking for. It’s free to use and Paladin Registry will email you a list of three highly-rated professionals that match your needs. From there you can interview each one and choose the best fit.

Happy investing!

Rob Berger is the founder of Dough Roller and the Dough Roller Money Podcast. A former securities law attorney and Forbes deputy editor, Rob is the author of the book Retire Before Mom and Dad. He educates independent investors on his YouTube channel and at RobBerger.com.

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Source: doughroller.net

Apache is functioning normally

July 25, 2023 by Brett Tams

As a mom, finding clever ways to save money can help secure your family’s financial future.

Yes, I know, there are many other, more impactful ways to build wealth, and in the grand scheme of things, saving a buck here and there might not seem like the recipe for propelling yourself (with your entire brood in tow) to millionaire status, but hear me out.

Unless you stop the bleeding (in this case, frivolous spending), it will take you a lot longer to get there.

In my mind, building generational wealth is a combination of developing marketable skills, earning from those skills, investing wisely, and frugal spending.

…And putting your foot down when any member of your brood wants to splash $1,000 on a pair of, in my view, hideous sneakers.

That’s why I rave about How to Create a Budget and Everything You Need to Know to Start Using Coupons.

A Mom’s Guide to Saving Money the Smart Way

Of course, as with everything worth doing, it’s much easier said than done. Believe me; I’ve had moments of taking on unnecessary expenses at the grocery store despite having blown past our monthly budget.

It happens; you are going to slip up sometimes. The key is to have a solid hold on your spending habits and a savings system. That way, even if you go off the rails occasionally, you can recover and stay focused on your ultimate savings goals.

With that in mind, here are my top-secret (shhhhhh) creative ways to save money monthly.

1. Start Budgeting

It sounds obvious, doesn’t it?

Would it surprise you to learn that only 30% of American households actually have a detailed monthly budget prepared? Yes, according to a Gallup poll, two in every three Americans don’t have a monthly budget, nor do they have a long-term financial plan or investment goals.

I kid you not; budgeting is one of those things that everyone knows they should do, yet up to two-thirds of us don’t!

Having a detailed monthly budget will open your eyes to the reckless spending on everyday purchases you are currently engaging in.

From unnecessary online shopping sprees to pizza deliveries, even your grocery bill might have something you don’t need, or you can find cheaper alternatives if you just look.

You won’t know where all the money is going until you have an actual, written-down budget. THEN you will see just how badly you’ve been throwing cash around.

Here’s a quick guide on budgeting categories for the family if you want to get started right away.

2. Use Money Saving Apps

If you are anything like me, you put most of your grocery shopping, utility bills, and monthly bills on your credit or debit cards. While most of these offer rewards when you use them, you can go further and use savings apps.

Here’s why. Many of these apps highlight saving opportunities and fetch rewards such as cash back on many purchases you would make anyway.

Neat, huh?!!

Here are a few that I like using. You can check them out and see what you think:

Ibotta: I get cash back for most purchases.
Acorns: This one helps me save and invest.
Rakuten: These guys give you cash back on online purchases you make in over 3,500 stores.

3. Try Out Capital One Shopping

Now this is a tool I simply love! Capital One Shopping is not only free, but it also works in the background. So you don’t need to remember to use it every time.

If you want to find the best deals online and gift cards and coupons, you must install Capital One Shopping on your browser.

You will save a ton of money. Trust me on this one! It is by far one of my favorite and most clever ways to save money.

4. Create a Meal Plan

Have you ever found yourself at the grocery store buying things that weren’t on your list because they looked “interesting to try out?” I know I have!

I’m not saying you shouldn’t try new things and new recipes (what would life be without these little adventures?). I’m saying that meal planning will help you cut back on a lot of unnecessary expenditures when it comes to groceries.

Here’s why I meal plan:

It helps us avoid food wastage (leftovers are planned for)
Encourages a better diet
Saves money on impulse purchases at the grocery store

But most importantly, meal planning helps me save money and curb my spending habits on those nights I don’t know what my family will eat. I will already have a plan in place to help cut down on ordering in and eating out.

Check out my free printable meal plan!

5. Conduct a Personal Finance Audit

I know! I know! That sounds like what the IRS is for, but hear me out.

There are things you are paying for now that you either don’t need or don’t even remember that you are paying for unless you run a complete audit of your finances.

When was the last time you actually saw your husband reading that “Monster Trucks Forever” magazine that keeps coming in the mail?

How about you? Are you really going to visit all those vineyards someday? Then why are you paying for that subscription?

We often put so many little $1-a-month subscriptions on our cards because they seem important at the time, or a dollar a month doesn’t seem like that much. But they add up.

Run a quick audit on your bank statements to find out what you are paying for that you no longer use or don’t actually need, and cut it out.

These are just some creative ways I use to reduce our spending and save money. Saving money doesn’t have to be painful. You just need to find ways to reduce your living expenses (not necessarily lifestyle) and channel all that extra cash into your savings account.

Also see: How to get out of debt fast when you don’t have much money

How about you? What are some of your clever ways to save money?

Source: pennypinchinmom.com

Apache is functioning normally

May 27, 2023 by Brett Tams

Savings may be essential for financial health, but building a savings account is easier said than done. Between regular expenses and well…life in general, it’s often hard to figure out what you can actually afford to save, let alone prioritize planning for the future.

Fortunately, the best money-saving apps on the market today promote saving techniques that work around your regular spending habits – sometimes so smoothly you save money without even noticing.

What’s Ahead:

Overview of the best money-saving apps

App	Fees	Investing included	Account minimum	Savings account APY	Checking/spending account
Acorns	$1-$5/month	Yes	$0 ($5 for round-ups)	N/A	Yes
Digit	$5/month	Yes	$0	N/A	No
Stash	$3-$9/month	Yes	$0 ($1 for certain investment accounts)	N/A	Yes
Chime	N/A	No	$0	2.00%	Yes
Twine	0.6%/year for investment accounts	Yes	$5 for investment accounts	1.05%	No
Qapital	$3/$12-month	Yes	$10 for investment accounts	0.1%	Yes

Best for first time investing – Acorns

Cost – $3 or $5/month.
Options – Saving, investing, and checking accounts, retirement accounts, children’s UTMA/UGMA accounts, cash back extension.
Savings techniques – Round-ups, automatic paycheck deposits, cash back shopping extension.

Acorns gets its name from the idea that small “acorns” of spare change can grow into big savings if you give them a little time. As a combo savings/investing app, Acorns makes things simple for the brand new investor and doesn’t require much money to get started.

The $3/month “Personal” plan gets you an Independent Retirement Account (IRA) and an “Acorns Spend” checking account. For $5/month, you can tack on investment accounts for children as well.

If savings are your main goal, the basic account will probably be enough to get you rolling. When you link a credit or debit card to your investment account, Acorns “rounds up” your purchases to the nearest dollar and invests the difference for you once it hits $5 or higher – a popular auto-savings technique. You can add a “multiplier” feature if you want Acorns to double or triple the amount of investment with every transaction.

Learn more about Acorns or read our full review.

Best for flexible savings – Digit

Cost – $5/month (first 30 days are free).
Options – Savings, investment, and retirement accounts.
Savings techniques – Automatic fund transfers, credit card debt reduction.

For $5/month, Digit’s algorithms analyze your spending patterns and cash flow, then make a savings plan tailored to you. When you can spare a little extra, Digit transfers some cash to a linked savings account. When you have just enough to pay the bills, Digit skips the transfer.

This method can work well for people with fluctuating incomes or anyone who has trouble deciding in advance how much to save. If Digit does overdraft your account (which they promise not to), they’ll reimburse fees for up to two overdrafts.

Like most money apps, Digit lets you pick your own savings goals, and if you’re paying down credit card debt, Digit can automatically send the amount you’ve saved to the credit card company on your behalf.

Learn more about Digit or read our full review.

Best for lots of investment options – Stash

Cost – $3 or $9/month.
Options – Savings, investment, and retirement accounts, checking accounts, individual stocks and fractional shares, life insurance.
Savings techniques – Round-ups, stock-back, automatic saving.

For people who want to watch their savings grow, Stash offers over 150 ETFs, stocks, and other micro-investment vehicles. You have more control over your portfolio picks with Stash than you do with Acorns – you can design your own portfolio or pick a pre-selected one from Stash. You can even pick ETFs that align with your values.

Savings options are flexible, too: you can choose an amount to put in savings each month, invest your spare change with the “round-up” method, or let Stash’s “Smart Stash” feature figure out what you can afford to save based on your cash flow.

Stash comes with a debit card, something a lot of savings apps offer, and its own unique “stock-back” incentive. Whenever you use the Stash bank card to buy something at a publicly-traded company, Stash gives you a small fractional share of company stock to add to your portfolio.

The app’s cost depends on how many extra features you want. Most everyday savers will be fine with the $3/month Growth plan, which includes a debit card, an investment account, and stock-back perks. You can also add a tax-advantaged retirement plan (a good idea if you haven’t opened a retirement account yet). Serious investors can upgrade to the $9/month “Stash+” for 2x stock-back returns and extra market info.

Learn more about Stash or read our full review.

Disclaimer – Paid non-client endorsement. See Apple App Store and Google Play reviews. View important disclosures.

Investment advisory services offered by Stash Investments LLC, an SEC registered investment adviser. This material has been distributed for informational and educational purposes only, and is not intended as investment, legal, accounting, or tax advice. Investing involves risk.

¹For securities priced over $1,000, purchase of fractional shares start at $0.05.

²Debit Account Services provided by Green Dot Bank, Member FDIC and Stash Visa Debit Card issued by Green Dot Bank, Member FDIC. pursuant to a license from VISA U.S.A. Inc. Investment products and services provided by Stash Investments LLC, not Green Dot Bank, and are Not FDIC Insured, Not Bank Guaranteed, and May Lose Value.” because the article mentions the debit card.

³You’ll also bear the standard fees and expenses reflected in the pricing of the ETFs in your account, plus fees for various ancillary services charged by Stash and the custodian.

⁴Other fees apply to the debit account. Please see Deposit Account Agreement for details.

⁵Stock-Back® is not sponsored or endorsed by Green Dot Bank, Green Dot Corporation, Visa U.S.A, or any of their respective affiliates, and none of the foregoing has any responsibility to fulfill any stock rewards earned through this program.

Best for low fees – Chime®

Cost – No monthly fees.
Options – Savings and checking accounts.
Savings techniques – Round-ups, automatic transfers to savings, paycheck transfers.

Chime is a mobile app that takes advantage of the lower-cost online-only financial app model to pass savings on to customers. They don’t charge a monthly fee, so you keep any money you save.²

Chime’s free checking and savings accounts offer plenty of the features you’ll find at a bank*, like:

A Chime Visa® Debit Card.
Check deposit options.⁴
Bill-paying functions.
Two-day advance on directly deposited paychecks.³

Checking and savings are linked; whenever you make a purchase with your checking account, Chime rounds up to the nearest dollar and adds the difference to savings.^{^} Or you can have Chime auto-deposit 10% of every paycheck into savings before the rest hits checking.¹ Either way, the app does all the work.

Learn more about Chime or read our full review.

* Chime is a financial technology company, not a bank. Banking services and debit card provided by The Bancorp Bank, N.A. or Stride Bank, N.A.; Members FDIC.
^ Round Ups automatically round up debit card purchases to the nearest dollar and transfer the round up from your Chime Checking Account to your savings account.
¹ Save When I Get Paid automatically transfers 10% of your direct deposits of $500 or more from your Checking Account into your savings account.
² There’s no fee for the Chime Savings Account. Cash withdrawal and Third-party fees may apply to Chime Checking Accounts. You must have a Chime Checking Account to open a Chime Savings Account.
³ Early access to direct deposit funds depends on the timing of the submission of the payment file from the payer. We generally make these funds available on the day the payment file is received, which may be up to 2 days earlier than the scheduled payment date.
⁴ Mobile Check Deposit eligibility is determined by Chime in its sole discretion and may be granted based on various factors including, but not limited to, a member’s direct deposit enrollment status.

Best for joint savings – Twine

Cost – No fees for saving, 0.6% of invested assets/month for investing.
Options – Interest-bearing savings account, investment accounts, joint accounts.
Savings techniques – Automatic fund transfers.

Twine is ideal for people who are saving for a goal together (though you can use it on your own, too!). It combines savings-app automation with robo-advisor guidance, which can be helpful if you have more than one savings goal.

The basic free Twine savings account earns you a little interest – there’s a 1.05% variable Annual Percentage Yield (APY). They encourage you to earmark accounts for certain financial goals, either “general savings” or specific goals like a vacation or a down payment on a house, and pick a monthly goal deposit amount so you can track your progress. If you’re saving with someone else, you’ll pick a joint goal but open individual accounts.

Investment portfolios are optional if you want to take your savings to the next level. Twine pre-selects diverse portfolios for you, and they only require $5 to get started.

Learn more about Twine or read our full review.

Best for creative saving techniques – Qapital

Cost – $3, $6, or $12/month.
Options – Interest-bearing spending account, “goals” savings account, investment accounts.
Savings techniques – Round-ups, automatic fund transfers, “triggering activities” savings, “guilty pleasure” savings, 52-week savings, “spend less” savings, payday savings.

Qapital runs on behavioral economics – their multiple savings strategies use your routines, habits, and everyday purchases to help bulk up your savings.

Here’s how it works: you get a spending account that earns you 0.1% in compounded monthly interest, and a “goals” account to grow your savings. To fund your goals, you can transfer regular, set amounts from a linked bank account to your goals account, or pick one of Qapital’s “rules” or savings tricks.

There’s the “round-up” rule, which lots of apps use. There’s the “trigger” rule which saves a specific amount every time you engage in a certain activity (something simple you do regularly, whether it involves spending money or not).

The “guilty pleasure” rule moves a little cash into savings whenever you indulge in your favorite pricey latte, takeout, etc. The “52-week” rule lets you gradually increase the amount you stash in savings over a year. Qapital has other rules, too, and you’ll probably find one that works for you.

Their pricing is higher than most money-saving apps – a $3/month basic plan has all the savings tools, while the $6/month plan unlocks pre-selected investment portfolios and gives you a Qapital debit card. The $12/month master plan lets you open joint savings with a partner, similar to Twine.

Learn more about Qapital or read our full review.

Why should you use money-saving apps?

You’re just starting to build savings

The idea of building a savings account might be intimidating, but it’s much simpler to stash away 50 cents whenever you buy a cup of coffee or a dollar whenever you refill your gas tank. That’s mostly what these apps do – take the work out of savings one small amount at a time, so your regular budget isn’t disrupted.

Read more: The Pros And Cons of ‘Spare Change’ Investment Apps

You struggle to make savings a habit

If your money management style is on the “spend now, save later” side, it may be unrealistic to overhaul your habits right away and heap everything into savings. That’s not how habits work; they take time to develop.

A free 30-day trial of Digit or Qapital, for instance, could be enough to show you how much the app can grow your savings in a typical month; and after 30 days, you’ll be more used to putting a little cash aside.

You’re curious about small-scale investing

Investing can be a great way to save, but it’s inherently risky, and you don’t want to launch yourself right into an investment account without knowing what you’re doing.

These apps make micro-investing as easy as sticking to an automated savings plan and assessing your risk comfort level. And they let you start with small balances, so you don’t have much to lose.

Read more: 7 Easy Ways To Start Investing With Little Money

Why shouldn’t you use money-saving apps?

You have a savings pattern that works for you

If you’re already saving money on a timeline that fits with your goals and income, a savings app could help you skim a little more off the top of everyday purchases, but it might not be worth the fees.

You already have substantial savings

The savings accounts built into money-saving apps are great tools to get started, but they’re not the highest-yield accounts out there. You’ll earn more money keeping your savings in a bank or investment account that offers a higher APY (Annual Percentage Yield), especially if you have decent credit.

Most important features of money-saving apps

Automated saving

Money-saving apps take the “how much can I afford” guesswork out of savings by putting them on autopilot. You won’t see a huge interruption to your regular cash flow, which is nice – saving money doesn’t have to feel like a penalty or a punishment.

And most apps make the automation flexible; if you’re having a lean month or two, you can temporarily stop withdrawals (or, as with Digit, the app stops them for you).

Most importantly, you’ll get into the savings habit after a while.

Saving for short- and long-term goals

Sometimes it’s easier to save if you have something to look forward to. Money-saving apps keep you motivated by letting you choose your goals and showing you how much your savings have progressed.

“Rounding up” purchases

This auto-savings technique is available on almost every app now. By rounding up your purchases to the nearest dollar (or two dollars, or three – some apps let you multiply) you’re saving small, manageable, regular amounts while you spend.

Checking accounts

Several apps set you up with a checking account and debit card, though you can usually link an existing checking account as well.

Everyday money management

For elaborate budgeting templates, look for a budgeting app specifically (you can find our recommendations here). But savings apps have plenty of tools to keep your finances in line, especially if you tend to be disorganized and overdraft your accounts by accident. You can observe your spending patterns, set up payment reminders for bills, and get regular balance alerts all through the app.

Investing options

While investment accounts aren’t available with every savings app, they seem to be becoming more of a standard offering. “Micro-investing” lets you start out with spare change. Once you really get the hang of it, you may choose to switch to a higher-yield investment account elsewhere.

Summary

Money-saving apps are a great starting point, but they’re only one aspect of a solid financial management plan.

Think of them as a helpful tool to analyze your spending behavior and nudge you into the next steps, whether that means breaking down a monthly budget or working towards financial freedom.

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May 26, 2023 by Brett Tams

This post may contain affiliate links, which helps us to continue providing relevant content and we receive a small commission at no cost to you. As an Amazon Associate, I earn from qualifying purchases. Please read the full disclosure here.

Are you wondering how much money you should have saved by 25?

If so, this post is for you.

You need to learn how to save from a young age to be financially responsible and enjoy your life without stress.

In this post, I will outline the steps that I took to save a total of $25,000 by age 25. That ultimately led to becoming a millionaire well before most people earn that 7 figure status.

My goal is to help motivate and inspire you to save as much money as possible.

I believe that if everyone saves just 20% of their income each year, we could create massive waves of positive change across the world. So let’s get started!

How much money should you have saved by 25?

It’s never too late to start saving for your future.

By age 25, you should be working through paying off debt and starting to improve your savings rate.

Below are guidelines on how much money a 25-year old should have saved by the age of 25.

Save a Total of $20000

By 25, you should have saved $20000.

Given the average savings for this age is only $11,250 and the median savings is $3,240 (source), you will be ahead of the curve with those super savers in this age group. However, most twentysomethings fall in the middle of the bell curve and could barely afford a job loss or any major expense.

Save at Least 50% of your Annual Expenses

Another rule of thumb for a 25-year-old is to save 50% of your annual expenses.

Let’s say, you spend an average of $20000 a year on rent, food, insurance, discretionary spending, etc, then you would need to save at least $10000.

This method will make sure you have enough money saved based on your lifestyle.

How much money should you have saved by age 30 for retirement?

If you want to have a comfortable retirement, you should save as much money as you can by the age of 25 and 30.

Most people don’t save enough for retirement and twentysomething (age 20-29) only have average 401k balances of $10,500 (source).

That means at a retirement age of 65, your account balance would be $94,259 in a taxable 401k / IRA or $228,107 in a Roth 401k / Roth IRA. The assumptions include no additional contributions and an 8% rate of return.

To prepare for retirement, aim to save between $15000 and $20000 by age 25. To stay on track, use a benchmark to figure out how much you need to save each year and customize your target based on your individual circumstances.

If you’re not saving for retirement yet, start contributing to 401k plans and IRA accounts now so that you’ll have a solid foundation when it comes to savings.

Save at a Minimum of 10% of your Income

This needs to be non-negotiable at the age!

It is very easy to find ways to pay yourself first and save 10% of your income. While you may prefer to hit that happy hour or buy those designer shoes, you are better off trimming your spending and up your savings while you are young.

Then, each year increase your savings percentage by 1% until you reach the 20% threshold.

But, you don’t have to stop there! Many Gen Zs are wanting to explore why there are young and healthy and not be a slave to the workforce. That means you need to save more to make that happen.

What should your net worth be at 25?

Most people in their 20s are typically swaddled in debt, especially student loan debt.

Your goal is to have a positive net worth – even if by $100. That means your savings is greater than any debt you have.

Your goal is to double your liquid net worth quickly.

What is the average savings rate for people in their 20s?

Okay, let’s be real… okay?

Most young adults are spending more money than they are saving. That means each month their spending exceeds their income.

As such the statistics do not even include this age group.

how much should I have in savings at 25?

At 25, you should have about 3-6 months of living expenses saved up in the bank.

Additionally, it is important to start thinking about your long-term financial goals and make sure you are building a foundation that will support those goals.

What are the different savings goals that people in their 20s should have?

Saving for your future is important, and you need to make it a top priority.

There are many different savings benchmarks to choose from including:

Save an emergency fund of at least $2000.
Participate in one of our popular money saving challenges.
Start contributing to workplace retirement and save enough to get the company match.
Begin saving for those big purchases like a gently used car or downpayment for a house.
Set up a Roth IRA and start making contributions (even baby amounts count).

This will make sure you are on your way to becoming financially sound before you turn 30.

What are the list of ways to save money?

If you want to save money, there are a few things you can do.

Saving money in your 20s is the easiest age to save as you don’t have as many responsibilities and obligations as you will in the future.

Here is a list of the most common ways to save money:

1. Use Budget Percentages as a Guide

If you want to save money by 25, you’ll need to start by setting a budget and sticking to it. You can reach this goal by using different budgeting techniques, such as the 50/30/20 rule.

The 50/30/20 rule is a good place to start:

50% of your income going towards necessities (housing, food, utilities)
30% going towards discretionary expenses (groceries, entertainment, travel)
20% saved for emergencies

This will help you be consistent in your savings habits is key to saving money.

2. Track your spending

Tracking your spending is key to understanding where your money goes.

Save receipts from each purchase and go over them once a week to get a better understanding of your spending habits. This can help you see where you might be overspending and make improvements to your budgeting techniques.

Great apps to help you include Simplifi or Rocket Money.

2. Use AI Powered Savings Apps and put your savings on autopilot

With AI, you can save money by automating your savings process.

Setting up recurring transfers to automatically deposit money into your savings account means that you won’t have to worry about finances anymore.

The popular AI saving apps can also help you save for your retirement, as well as any financial goal you may have. Thus, reducing the amount of time spent on financial planning.

Top AI Savings Apps:

4. Use gamification to save

Gamification can help make saving fun and more likely to be kept up.

Gamification can help people save money by providing a tangible benefit to work towards and providing some valuable encouragement.

By using the method of gamification, you help others save money by motivating them to reach a goal while you work to complete the same goal.

For example, if you’re trying to save money for a trip, you could set up a game with friends (aka accountability partners) where you earn points every time you save money with the 100 envelope challenge. Those that save the goal amount get to go on the trip.

5. Collect your employer’s 401(k) match

If your employer matches your contributions to a 401(k) plan, it’s important to take advantage of the match.

A 401(k) match is a free money offer from your employer, so it’s worth maxing out your contributions in order to gain the most benefit.

Also as long as you meet the qualifications, you can also contribute post-tax dollars to a Roth IRA account. This is another great way to increase savings for retirement.

6. Delay buying a home

Buying a home is not easy, but it’s important to have goals and plan for what you want to achieve.

The down payment on a house is one of the most important factors when buying a home as such you may need to delay buying a home for as long as possible to save money.

Also, by delaying buying a home, you can save money by taking the time to research different neighborhoods, compare prices, and get pre-approved for a mortgage.

Not only will this save you money in the long run, but you will also have peace of mind knowing that your future home is exactly what you wanted.

7. Use Open banking to track your spending

If you’re interested in tracking your spending and saving money, you can use Open banking to do just that.

Open banking allows customers to access their bank account information and manage their finances through APIs.

This means you can see how much money you’ve spent and where your money is going, which can help you stay within your budget. Additionally, open banking tools can be used to better understand your bank’s products and services.

Many of the best budgeting apps, such as Quicken, allow you to utilize open banking data to help you organize and manage your money in one place.

8. Use credit cards sparingly

Even those Gen Z has the lowest credit card debt amount (source), it is still wise to make sure you are using credit cards appropriately.

Credit cards can be a great way to earn rewards or get cash back, but only if you use them sparingly and pay off your balance in full each month to avoid interest charges.

It’s also important to check your credit report regularly to make sure there are no outstanding debts you didn’t know about.

9. Use a budget

If you want to save money, using a budget is a great way to accomplish it.

By tracking your expenses and setting limits on how much you can spend each month, you can make sure that you are always saving money.

A budget is a great way to save money because it allows you to choose where you actually want to spend your money rather than figuring out where you spent your money afterward. It also allows you to optimize your spending so that you don’t waste money on unnecessary things.

10. Invest for the long term

Investing for the long term can be a great way to save money as you let your money grow instead of having to create new streams of income.

You can buy stocks in companies or ETFs and hold onto them for a long time, adding money to your account regularly. This strategy can help you take advantage of market volatility and make money over the long term.

You also need to make sure you’re properly investing your money in order to reach your savings goals.

What is the best advice to save money by 25?

To save money by 25, individuals should aim to save 10% of their income.

It may be difficult to save more than 10% of one’s income, but it is possible.

Saving money is essential for financial security at any age, and you can start by being determined and making sure you’re saving at least 10% of your gross salary.

Simple Tips to Save Money by 25

You should focus on spending as little as possible to save money, and set a fixed budget rather than relate your expenses to your income.

Be consistent in your savings and avoid impulsiveness to save money.

Save up on transport or any other thing you might feel is a luxury rather than a necessity.

What is the average savings rate for people in their 20s?

The average savings rate for people in their 20s is $11,250, so it’s important to start saving as soon as possible.

The median savings is $3,240, so most people in their 20s have modest savings.

Savings Tools to Build Cash Fund Savings

There are many ways to save money, so find what works best for you.

People in their 20s have a lot of opportunities to save money, so don’t wait to start!

You want a savings plan that matches your long-term financial goals!

Pay yourself first

In order to have a successful future, it is important to start saving from a young age. There are a few different ways to save money, and one of the most important is to pay yourself first.

This means putting your own money into your bank account before spending it on anything else.

This will help you build a strong foundation for your future, and you will be able to save more money

Save Consistently

Set aside money regularly so you have a stash of cash to use when you need it.

That means each you save $100 or each paycheck you save $250.

Whatever the amount, do it consistently.

Trim Spending

If you want to save more money each month or year, try cutting back on unnecessary expenses.

Don’t rely on your income to directly influence your costs – track how much you’re spending each month and try not to exceed your allotted amounts for each category.

Do not overspend just because there’s more money in your checking account – create healthy financial habits that will last long-term.

Use Cash Windfalls Strategically

These cash windfalls could be from bonuses, inheritances, or even some left hand itching lottery luck!

You want to save those cash windfalls and make a plan on how you will spend them.

Additionally, you may be able to use the money to pay down debt or buy a home. This is an important lesson to learn if you have unexpected money coming your way—you don’t have to spend it all!

Save Increases in Income

Dedicate additional income to savings so that you’re really putting your money where your mouth is.

You can increase your savings by dedicating a percentage of your income to savings. Dedicate 10% of your income to savings, for example, and then an extra 1% to save search year.

Savings will grow along with your income, and you will have more money to use for other needs.

Make Saving a Habit

Your saving habits will change as you reach your 20s and into your 30s.

However, it’s important to keep track of your progress and make saving part of your regular routine. There are many different ways to save and reach your goals, so find what works best for you.

FAQs

If you have a low income, there are still ways that you can save money.

Try to focus on paying off high-interest debt first and then saving three months of living expenses.

Another way to save money is by reducing unnecessary expenses with a 30 day spending freeze.

The answer to this question depends on your individual situation and goals. However, we can offer some general advice on saving habits for a 25 year old should include:

First, it’s important to set a budget and stick to it. This will help you track how much money you are spending each month, and allow you to make better decisions about where to cut back. Add 1% to your monthly savings each month until you reach your goal of $20000 saved.

You also need to be mindful of how you spend your money. Try not to rely too heavily on credit cards or other forms of debt, which can quickly add up over time. Instead, try investing in stocks or bonds instead – these tend to provide more reliable returns over time and offer less risk than some other investments.

Finally, don’t forget about savings! Whether it’s into a high-yield savings account or an emergency fund earmarked for unexpected expenses, putting away some extra cash will help ensure that you have enough resources when necessary.

How much should I have in my emergency fund by 25?

By 25, you should have saved at least $1000.

However, 2% of your annual salary is a better threshold.

By age 25, most people should be saving at least 5% of their income and contributing an additional 1% every year.

If you can’t save enough money to contribute at the recommended rates, don’t worry – you can still save for retirement by gradually increasing your savings rate.

Saving money can be difficult, but it’s important to focus on not spending every penny you earn.

One way to do this is to set aside a certain amount of money each month that you will not spend.

Another way to save money is to find ways to reduce your monthly expenses. For example, you can cook at home more often instead of eating out, or you can carpool with friends to save on gas.

If you’re determined and have the skills, you can quickly learn how to make money online for beginners.

Side hustles are the name of the game right now.

Stick around Money Bliss – we have plenty of ways to help you earn extra money.

If you want to pay off your debts more quickly, you should start by saving money each month.

You can use your savings to pay down your debts faster if you focus on high-interest debt first.

If you have three months’ worth of living expenses saved up in case of emergencies, that would also be a good place to start. Check out the best debt apps to help you.

First, you need to make sure you are financially stable in other areas. You are fully funding your retirement accounts and Health Savings account, you have stable housing.

Then, you can consider saving for a child’s education through a 529 plan.

Saving for a child’s education can be difficult and expensive, but it’s important to start early if you have the extra income to support it.

To save money for a vacation, start by setting a specific amount you want to save each month. Then, calculate how much money you need to save by the date of your dream vacation.

Set a date by which you want to have traveled and begin backing out the math needed for that trip! As long as you continue saving 20% of your income each month and stay within budget, travel is always possible!

How to Save for a retirement

To save for retirement, you should start by investing 5-15% of your paychecks into a tax-advantaged account.

You should also plan your retirement based on your income, age, and desired lifestyle. You can save for retirement by consistently increasing how much you put in retirement accounts.

Don’t forget to include that employer match!

What should I do if I don’t have enough saved by 25?

Don’t get down on yourself!

Start now!

Waiting will only exacerbate things.

There are many different savings techniques to try, so it’s important to find one that works for you:

Start by putting away $50 every month and then add more funds as needed.
Pick one of our money saving challenges.
Use cash or debit cards instead of credit cards.

Even if you don’t have any big expenses planned in the near future, saving is still important for long-term financial stability. You’ll be on your way to having enough money when you’re older!

What are the consequences of not saving by 25?

You have nothing to show for your hard-earned income.

That is the cold and honest truth. But, you are only 25 years old, so you have plenty of time to change your ways.

If you’re not saving by 25, you may have to make some sacrifices in order to reach your financial goals. You may need to cut back on your spending, take on a second job, or make other changes to your lifestyle.

However, if you’re willing to make these sacrifices, you can still reach your goals.

Savings Steps for your Twenty-Something Self

When it comes to your twenties, there are a lot of things you want to do and accomplish.

One of the most important things on that list should be saving money.

After all, the earlier you start saving, the more time your money has to grow.

Starting to save money from a young age can lead to a larger nest egg over time. Plus, if you start early, you can take advantage of compound interest, which will help your money grow faster.

An individual’s earnings and spending patterns are still in flux during their twenties, so there are many opportunities to save.

Also, you need to remember there is more to life than just saving money–put other goals on your list (such as starting a business) and figure out how much you need to save each month in order to reach your targets.

Now, learn how much should I have saved by 30.

Source: moneybliss.org

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May 24, 2023 by Brett Tams

Saving for a comfortable retirement doesn’t have to mean a radical lifestyle makeover.

December 11, 2017

How much should millennials save for retirement (especially without giving up beloved treats, like avocado toast at your favorite brunch spot)? That’s the $1 million question and, if you’re a millennial, you’re probably looking for a hint so you can get your finances into shape.

Ultimately, how millennials should save for retirement depends on their income, debt, long-term financial goals and what options they have for stashing money away for the future. Even if it seems way too far off to worry about, numbers don’t lie: The earlier you start saving, the smaller are the amounts you have to sock away at any one time, and the more you will ultimately have when it comes time to kick back in retirement.

Still, 46 percent of millennials say they can’t afford to invest for the future, including by putting money into a retirement account, according to a Bankrate survey. Another survey, also conducted by Bankrate, found that millennials are not saving any money at all (or they’re not saving more than 10 percent of their income).

If you’re struggling to find the cash to save and running into obstacles to millennials saving for retirement, don’t fret. With simple changes, it’s possible to get your savings on track without committing to a total lifestyle makeover (you can still order that avocado toast this weekend). Here’s how:

1. Strike a balance between student debt and savings

Student loan debt is one of the biggest obstacles to millennials saving for retirement. The average student loan debt for graduates from the class of 2018 was $29,200, according to Bankrate. That’s a 2 percent increase from the year prior.

The interest rate on your loans is a huge factor when deciding how much should millennials save for retirement, says Michael Lux, an Indianapolis-based attorney and the founder of a website dedicated to student loan education, strategy and borrower advocacy.

“If you have a student loan with a 3.00% interest rate, it makes sense to invest in retirement rather than aggressively paying down the debt,” Lux says. “However, if you have high interest rates on your student loans, money used to pay down the debt will go much further than many investments.” So if your loans carry a higher rate than what your investments are earning before taxes, you may get more bang for your buck by accelerating your debt payoff.

While you can’t wave a magic wand to get rid of your loans, you can sometimes find a way to make them less taxing on your wallet. Consolidating or refinancing your loans at a lower rate could offer savings by potentially reducing your monthly payment or interest rate. If you’re able to lower your payment without stretching out the loan term, you could use the extra money to start compounding your savings for retirement.

2. Track your spending

Keeping tabs on spending can go a long way toward overcoming the obstacles to millennials saving for retirement.

Kevin Michels, CFP^®, says having a clear understanding of your cash flow can help you find the money to save.

Using a financial app can take the hassle out of tracking your spending. These apps link with your checking and credit card accounts to record your purchases so you can see at a glance where your dollars and cents are going.

Michels says once you understand what your current financial picture looks like, you can aim to improve it. This can help answer the question of how much should millennials save for retirement.

“Can you cut out unnecessary expenses or increase your income with a side hustle?” he says, suggesting gigs like freelancing, moonlighting as a ride-sharing driver or hiring out your services via online marketplaces that connect consumers with people willing to lend a hand with everyday tasks. “Figure out exactly how much you can add in surplus each month to go toward saving for retirement.”

Once you’ve added income where you can, and if you feel like you still want to trim your expenses, taking a closer look at your discretionary spending might reveal some easy ways to save on everyday expenses. If you pay for a monthly gym membership, for example, perhaps you could change up your workout routine and start running or do yoga at home instead. If you go out to eat regularly with friends, consider swapping a night out for a potluck dinner or an at-home Sunday brunch—avocado toast and all—to save cash. Finding money for retirement doesn’t mean giving up fun completely. You may just need some new ways to approach it. This could help eliminate obstacles to millennials saving for retirement.

3. Cash in on your employer’s retirement plan

Figuring out how millennials should save for retirement begins with understanding the options. If you have access to a retirement plan at work, that’s a great place to start, says Jake Serfas, lead financial strategist at a financial planning firm in Washington, D.C.

“A 401(k) offered through your employer can be your biggest tool in terms of saving money and preparing for retirement,” he says. Contributions to a 401(k) are deducted from your taxable income, potentially reducing your tax liability for the year. And you can use a 401(k) to grow your retirement savings faster if your employer offers a matching contribution. Not capitalizing on your employer’s 401(k) plan is actually a common retirement savings mistake.

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So how much should millennials save for retirement in their employer’s plan? Serfas says you should at least be saving enough to get the match, if there is one. Matching formulas can vary, but one common match is dollar-for-dollar on the first 6 percent of employee contributions. When you don’t chip in enough to get the match, you’re leaving money on the table.

But what if you don’t have a 401(k) at work? In that case, you could open an IRA. A Discover IRA CD, for instance, offers competitive rates at fixed terms. Both 401(k)s and IRAs offer millennials a tax-advantaged way to save for retirement.

4. Don’t be afraid to start small

Getting past the obstacles to millennials saving for retirement sometimes means having to work on a small scale to achieve your big-picture goal.

Michael Banks, founder of a personal finance and investing blog, says to answer the question of how much should millennials save for retirement, you need to have the right perspective.

“There’s no minimum amount required to start saving for retirement,” Banks says. “Even $20 a month is good, if you invest it in the right places.” Banks suggests micro savings apps, which allow you to invest your spare change in various diversified investments. Banks says the convenience of being able to track your investments from a mobile device may be especially appealing to on-the-go millennials.

“The amount you’re saving isn’t what’s important,” Banks says. “What matters most is saving consistently, early and often.”

If you’re starting your retirement plan from scratch, the Discover IRA Savings Account might be a good option. With no minimum balance to open, this account allows flexible contributions to fit any budget.

Set goals to avoid obstacles to millennials saving for retirement

The question of how millennials should save for retirement doesn’t have a one-size-fits-all answer. Setting goals based on where you are financially can help you reach your retirement savings objective. Making small changes can help you keep the ball moving toward your ultimate goal of a comfortable retirement without feeling overwhelmed.

Articles may contain information from third-parties. The inclusion of such information does not imply an affiliation with the bank or bank sponsorship, endorsement, or verification regarding the third-party or information.

Source: discover.com

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May 23, 2023 by Brett Tams

Looking for the best money saving apps and websites?

When it comes to using technology to save money, there are a variety of money saving apps and websites to choose from. I’ve sifted through the best personal finance apps to find which ones will help you save the most money, and I’m sharing a list and summary of your best options.

What I love about these kinds of apps is that you can easily keep track of your savings. You can simply pull out your phone and see what’s happening with your finances.

Whether they make managing your money easier, allow you to make or save more money, simplify financial tasks, cut your expenses, or something else, there are many benefits to the apps I’m sharing today.

Saving money is so important, but it can be difficult to do with the rising cost of things. That’s why every little bit counts when it comes to saving money!

The money saving apps and websites below will help you:

Save money from your phone
Save/earn money when shopping online
Manage your money online
Side hustle online
Save when you grocery shop
Set and reaching savings goals
Invest for your future
Improve your spending habits
Cut your expenses

And more.

The apps I’m sharing will work on Apple iOS, Android, laptop, and/or tablet. You should be able to sign up for them through your phone’s app store or by visiting the company’s website.

In today’s article, I am going to explain the top money saving apps and answer frequently asked questions, such as if money saving apps are safe, why these apps are willing to pay you cash, and more.

20 Best Money Saving Apps

Before we begin, I want to quickly list out all of the best money saving apps below:

Personal Capital
Capital One Shopping
Upside
Fetch Rewards
Ibotta
Qapital
Yotta Savings
Swagbucks
Rakuten
Acorns
American Consumer Opinion
Neighbor
Survey Junkie
InboxDollars
Decluttr
Bestmark
RVshare
Get Jerry
Chime®
Albert

1. Personal Capital

Personal Capital is a very popular personal finance and investment portfolio tool.

With Personal Capital, you can see your net worth, see if you’re saving enough for retirement, set a monthly spending target (and organize your spending and savings), analyze your cash flow, check up on your investments, and more.

There’s even a feature that analyzes your investment fees. It helps you identify places you can save on fees, which will help you put more of your money to work for you.

Personal Capital also has a high-interest rate savings account. This is a fee-free, FDIC-insured account, and it currently offers a savings APY of 3.35%!

Plus, it’s a free personal finance app that you can access right from your phone.

You can learn more about Personal Capital here.

2. Capital One Shopping – Automatically apply coupon codes

Capital One Shopping is one of the best money saving apps because it automatically applies coupon codes when you’re shopping online. That means you don’t have to search for coupon codes, which can save you time and money.

This is one of the best automatic savings apps because you don’t have to do anything extra. The Capital One Shopping app does the work for you by running through a variety of coupon codes as you check out, and then it automatically applies the best digital coupons for you and your purchase.

It’s free to use Capital One Shopping, and it is a browser extension that works with all major browsers.

You simply just shop as you normally do, and the Capital One Shopping app works in the background. I have it installed on my laptop, it works great, and I am always able to find the best deals with no extra time spent on my end.

You can sign up for Capital One Shopping here.

3. Upside – Save at gas stations

Upside helps you find gas stations, groceries, and restaurants where you can earn cash back on your purchases. You simply sign up for a free account, and then look at the Upside app to find places near you.

You can earn up to $0.25/gallon cash back at gas stations, up to 30% back on grocery purchases, and up to 45% back at restaurants. This app can help you offset the cost of inflation by helping you save money on everyday purchases.

App users can earn cash back at more than 50,000 locations nationwide, such as Shell gas station, Phillips 66, Burger King, Dunkin Donuts, Piggly Wiggly, and so much more.

One of my favorite Upside features is the map that tells you how much each gas station in your area is charging for a tank of gas. This helps you find the lowest price possible, while also giving you cash back.

You can check out Upside here to learn more.

4. Fetch Rewards – Scan your grocery receipts

If you’re looking for the best money saving app for groceries, I’ve been using Fetch Rewards the last few months, and it is so easy to save on groceries and other daily purchases!

Fetch Rewards is a cashback and gift card app that rewards you for purchases that you’ve already made.

With Fetch Rewards, you can earn points by submitting your receipts to the Fetch Rewards app from any grocery store, clothing store, restaurant, gas station, and more. Yes, ANY!

Then, you can redeem the points that you have earned for gift cards (to places such as Target or Amazon) and other rewards.

All you have to do is take a picture of your receipt with your cell phone, and you can easily earn points. I scan any and all receipts into my Fetch Rewards app and can easily earn rewards.

Here’s how Fetch Rewards works:

Shop like you normally would
Scan your receipt after you’re done
Earn points on Fetch Rewards

You can sign up for Fetch Rewards here.

5. Ibotta – Submit your receipts on your everyday purchases

With Ibotta, you simply create an Ibotta account, unlock rebates and rewards, go shopping, verify your purchases, and then get cash.

This is a great daily savings app. You can redeem rebates from over hundreds of stores, such as The Home Depot, Walmart, Chewy, and Best Buy.

You can earn cash back online as well as in-store, which is where Ibotta really stands apart from other companies. Plus, you can connect your favorite loyalty cards to your Ibotta account as well, and then Ibotta automatically applies loyalty discounts.

Ibotta is one of the easiest and best money saving apps because you’re making money shopping like you normally do. Ibotta then pays you in cash or gift cards to Amazon, Starbucks, and other stores.

6. Qapital – Save with minimal effort

Qapital is an app that can help you to save, invest, and spend with money better. This award-winning savings app has over 2 million users who have saved over $3 billion!

You can set triggers for saving, like when you post a status update to Facebook, every time you go for a run, when the space station flies over your house, etc. You can also set automatic deposits, do round-ups, and more. This can be a great way to get into automatic savings.

Qapital also has goal-based savings features, making it a great app for saving money for a trip, your wedding, emergency fund, and more. You simply set a savings goal, and Qapital automatically moves money into that account to help you realize your goal by your deadline.

There is a small monthly fee to use Qapital, but you can get a 30-day free trial. After that, they have three pricing tiers from $3 a month to $12 a month.

You can sign up for Qapital by clicking here.

7. Yotta Savings – Win up to $10 million weekly

The Yotta Savings app gives you the chance to win up to $10,000,000 weekly.

Yotta Savings uses the psychology that drives Americans to play the lottery to instead motivate Americans to save money.

For every $25 that you save with Yotta, you have the chance to win $0.10 all the way up to $10,000,000, every week.

If you don’t win, the cash you’ve saved still has a 0.20% savings rate, which is twice as high as the national average.

I personally signed up for Yotta Savings, and I think it’s a fun way to get people into saving more money. So many people enjoy playing the lottery, and this can be a great way to motivate people to save their hard-earned income.

There is even a Yotta debit card where you can earn 10% back and the chance to get any item you buy for free with the Yotta Debit Card. Plus, your savings accounts with Yotta are FDIC insured.

You can click here to download the Yotta Savings app. You can also learn more in my Yotta Savings Review.

8. Swagbucks – Complete simple tasks online

I started using Swagbucks years ago, and it has helped me easily earn extra cash on the side, and all you need is an internet connection.

There are many ways you can earn money on Swagbucks, such as:

Watching videos on their website
Playing free games online
Scanning your receipts
Installing the Swagbutton
Printing coupons
Answering daily polls
Searching the web and using their search engine

And much more.

Here’s how Swagbucks works:

You can join Swagbucks through my referral link, and receive a $10 bonus.
You can then earn points by taking online surveys, searching the web like you normally do, watching videos on Swagbucks, and shopping online.
Then, you can redeem your points for PayPal cash or gift cards (such as to Amazon or Walmart).

As you can see, Swagbucks is very easy to use!

9. Rakuten – Get cash back at online retailers

Rakuten (used to be called Ebates) is one of the best apps for saving money, and it allows you to earn free money for spending how you normally would online.

All you do is click on a store that you want to shop through (they have tons of stores such as Walmart, Target, Old Navy, etc.) and shop just like how you normally would shop online.

Rakuten makes a commission for referring you to the store you just shopped at, and they give you some of that money back as a reward. This can help you to trim your expenses and put a little more money back in your pocket. Who doesn’t love putting their money to work?

When you sign up through my link, you’ll receive a free $10 cash sign-up bonus.

10. Acorns – Invest your spare change

Is there an app that saves your spare change? Yes, and it’s called Acorns!

Founded in 2012, Acorns is the original micro-investment app. Micro-investing means you’re investing in fractional shares of stocks. So instead of buying a full stock share, you can invest with smaller amounts of money, which makes investing more accessible than ever before.

Acorns allows users to link and round up transactions to the nearest dollar from both debit and credit cards and essentially invest their spare change. Acorns also does 2x, 3x, and 10x multipliers on round-ups so you can maximize your investments.

For example: If you use a linked card to buy a $4.58 coffee, Acorns will round it up (to the nearest dollar) to $5 and invest the $0.42 difference.

Acorns also has many other features within their app, such as the ability to earn money while you shop, find jobs, and more.

You can click here to sign up for Acorns.

11. American Consumer Opinion – Paid online surveys

American Consumer Opinion is a survey company that I recommend, and it is free to sign up.

You can earn anywhere from $1 to $50 per survey taken through American Consumer Opinion, but $50 for surveys is pretty rare. It all depends on the length of the survey, and I would say the average is probably more around $1 to $5 per survey taken.

American Consumer Opinion also sometimes gives you free items to test out and give your feedback on.

They have paid out over $35,000,000 to survey takers and have posted over 20 million surveys. There are also over 7,000,000 active members.

You can sign up for American Consumer Opinion here.

12. Neighbor – Rent out your garage

Do you have unused storage space? If so, you may be able to earn money with it.

Neighbor is the Airbnb of storage space.

You can use this website to list your unused space for rent and earn up to $15,000 per year. With Neighbor, you can rent out your garage, driveway, basement, or even an unused closet.

You can set your own prices and decide for yourself what storage reservations you want to approve. You can even talk with renters in advance before deciding if they’re a good fit.

You can sign up for Neighbor for free here.

13. Survey Junkie – Share your feedback

Survey Junkie is a top survey company that provides online surveys that pay cash. You simply build a profile with them, and they match you to paid online surveys that fit your information.

They pay either cash through PayPal or with gift cards to places such as Amazon, Target, and more.

Survey Junkie accepts members from the United States, Canada, and Australia.

You can take surveys for cash by signing up for Survey Junkie here.

14. Inbox Dollars – Play games online and use coupons

InboxDollars is an online rewards website that rewards its members for watching videos, taking surveys, redeeming grocery coupons, playing games online, and more.

It is free to sign up and free to become a member.

Most of the paid online surveys on Inbox Dollars pay from $0.50 to $5.00 and take 3 to 25 minutes to complete.

Sign up for InboxDollars here and receive a free $5.

15. Decluttr – Sell your old phone

Decluttr is a website where you can sell your old cell phones, CDs, DVDs, games, and books.

It is one of the most popular buy-and-sell electronic/tech websites, and for good reason: They pay well and quickly.

Here’s how to make money on Decluttr:

Open Decluttr’s app and get a free instant valuation for the items that you want to sell.
Tell them the make, model, and condition of your cell phone. If you’re selling CDs, DVDs, or games, then you just enter your barcode or take a picture of the barcode with the Decluttr cell phone app.
If you’re happy with the amount that they are offering you for your item, then you simply get a box (any box that you think will keep it safe while it’s in the mail) and pack it up safely to ship to Decluttr. Decluttr sends you a free shipping label, and all you have to do is print out and tape it to your mailing box.
Once your item arrives at Decluttr and it’s been looked over and verified, you will receive payment the next day by direct deposit to your bank account or PayPal.

As you can see, it is easy to use this website. If you have items around your home that you are no longer using, then this can be an easy way to make money. I also recommend shopping through Decluttr if you want to save money on electronics!

You can check out Decluttr here.

16. Bestmark – Mystery shopping

Companies hire mystery shoppers because they want to get a better idea of what the customer experience is actually like. This could be a clothing shop, a car dealership, a movie theater, and more. Basically, any business that’s selling something to customers can benefit from mystery shoppers because they want to see their business through their customers’ eyes.

Mystery shopping can be an interesting way to make extra money online, while shopping in-store, over the phone, and so on.

In the past, I have done mystery shops that paid me actual money, and others paid me in free items too, such as a nice dinner out and makeup. After using Bestmark for mystery shopping, I highly recommend them.

There is no monthly fee with Bestmark, and it is free to sign up!

You can learn more at Want To Make An Extra $100 A Month? Learn How To Become A Mystery Shopper.

17. RVshare – Rent out your RV

If you have an RV that you aren’t currently using, then you may be able to earn $100 to $300 a day or more by renting it out to others through RVShare.

Think of RVshare as Airbnb for RVs.

You can rent all kinds of RV on RVShare, such as:

Camper vans
Travel trailers
Pop-ups
Class C Motorhome
Class A Motorhome
Toy hauler

RVshare also securely handles all payments and releases funds to your bank account one business day after the start of each rental.

Related: Have an RV that you want to rent out? Check out How To Make Extra Money By Renting Out Your RV.

18. Get Jerry – Save money on car insurance

When was the last time you shopped around for car insurance?

Even though it’s very easy, shopping around for insurance is something that most people avoid because it takes time. The problem is that not shopping around can cost you tens of thousands of dollars over your lifetime.

Jerry is an insurance comparison company that will help you get the best value car insurance.

With Jerry:

You can sign up in just 45 seconds
Compare quotes from over 45 companies
Save an average of $879 per year

You can shop car insurance rates through Get Jerry here.

19. Chime® – Round-up savings app

Chime is an award winning financial app that will help you save money and make the most of your spending. One of their most exciting features are automatic round-ups when you make a purchase. Chime will automatically round up your purchase to the next dollar amount and save the rest for you.*

Here are even more Chime features:

Get paid up to two days early^ when you set up direct deposit
No monthly fees and fee-free overdraft
Send fee-free payments to friends and family
Higher-than-average APY*

You can sign up for Chime here.

Chime is a financial technology company, not a bank. Banking services provided by The Bancorp Bank, N.A. or Stride Bank, N.A., Members FDIC.

*Round Ups automatically round up debit card purchases to the nearest dollar and transfer the round up from your Chime Checking Account to your savings account.

*The average national savings account interest rate of 2.00% is determined by FDIC as of November 17, 2022 based on a simple average of rates paid (uses annual percentage yield) by all insured depository institutions and branches for which data are available. Visit National Rates and Rate Caps to learn more.

^Early access to direct deposit funds depends on the timing of the submission of the payment file from the payer. We generally make these funds available on the day the payment file is received, which may be up to 2 days earlier than the scheduled payment date.

20. Albert – Simple saving and investing app

Albert is an app designed to make it easier to save and invest all in one place. This app has features for saving, investing, and budgeting.

They even have a Genius feature, which is an in-app chat where you can ask one of their Geniuses anything related to money, from credit cards, buying a car, student loans, and more.

You can learn more about Albert here.

Do money saving apps actually work?

Yes, money saving apps and websites actually work. They exist for a reason!

Now, not every single one will work for everyone, but there are many options that you may be able to try out.

I have personally used many money saving apps and websites over the years, from online savings accounts, to cash back websites to paid online surveys, and more.

Are money saving apps safe?

The money saving apps and websites included in this article are safe and legitimate.

I did thorough research on each company, and I use many of them myself.

Where do money saving apps get money from? Why would they pay me?

Many of the money saving apps and websites listed above make money in ways such as:

They may get paid a commission when a customer buys something from one of the company’s partner sites.
Selling market research data, which is what survey sites pay you for.
Display advertising – which means getting eyeballs to their website, app, etc. – may earn them money through advertising on their website/platform/app.
Some of these apps make money because you are selling something to them, and then they resell it, such as with Decluttr.
Mystery shopping companies make money from the company that is hiring them to have the mystery shop done. For example, a clothing store may pay them to find mystery shoppers and conduct the mystery shop.

They all make money in some way, which is why they do what they do.

They are all legitimate, and many people earn money with each of the ways listed in this article.

What are the best money saving apps for iPhone? And what are the best money saving apps for Android?

Out of this list of apps, Acorns and Ibotta are two of the top-rated iPhone and Android apps. But that doesn’t mean those are the only ones you should check out. These companies all have very user-friendly and safe apps.

What are the best money saving apps?

To quickly recap the above, the best money saving apps include:

Personal Capital
Capital One Shopping
Upside
Fetch Rewards
Ibotta
Qapital
Yotta Savings
Swagbucks
Rakuten
Acorns
American Consumer Opinion
Neighbor
Survey Junkie
InboxDollars
Decluttr
Bestmark
RVshare
Get Jerry
Chime
Albert

The money saving apps above may help you to save money, cut your expenses, reduce your fees, build larger savings accounts, improve your spending habits, get rewards, make money, and more.

What are your favorite money savings apps?

Apache is functioning normally

May 15, 2023 by Brett Tams

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Technology is changing many aspects of our world — including change. When I was young, I remember the thrill of cash and the spare change it generated when I spent it. I would scour my change looking for rare coins and deposit the ordinary ones into my trusty piggy bank.

Today that thrill is gone, along with the simplicity a piggy bank or coin jar brought to saving money. Whether you were working on building an emergency fund or simply wanted to save money for a rainy day, change was always there to give you a head start. Today we swipe a piece of plastic or pay for everything online with no paper bills or coins changing hands.

Thankfully, a new type of technology is filling the void electronic transactions have created. Savings apps that automatically round your purchases to the nearest dollar are bringing back the simplicity that spare change brought to saving.

The Best Round-Up Savings Apps

The apps on our best money-saving apps list all do one or two things very well, if not more. For example, some use psychological triggers to help you save wisely while others focus on helping you teach your children how to set and manage long-term financial goals. And while most aren’t officially banks, most have FDIC-insured checking accounts built in, protecting your money from the unknown.

Acorns

Our Rating

Acorns is a comprehensive personal finance app with a built-in checking account, automated budgeting and savings tools, and multiple investment accounts for all stages of life.

Monthly Fee

Deposit Insurance

Up to $250,000

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Acorns is built around the idea that you can build your finances to be as sturdy as an oak tree with a start as small as an acorn.

Though Acorns is much more than a round-up app, its simple round-up feature is key to its value. Just connect your credit cards and debit cards to your account and it will automatically round your purchases up to the nearest dollar and deposit the change for you. Once you have at least $5 in round-ups ready to process, Acorns transfers the money from your checking account to your investment account.

Acorns offers four different types of financial accounts: a general (taxable) investment account, a custodial account for children, a retirement investment account (IRA), and a checking account. It has two paid plans, with monthly membership fees starting at $3.

Acorns offers mobile apps for Android and iOS devices. They have all the features and capabilities of the desktop version.

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Chime

Our Rating

Chime is a personal finance app that helps you manage your money, save for the future, and build credit. It has one of the best savings yields of any FDIC-insured round-up app.

Monthly Fee

Deposit Insurance

Up to $250,000

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Chime is a mobile-first personal finance and online banking app. You don’t have to use it as a round-up savings app, but it’s easy enough to do so — just opt in to have your Chime Visa debit card purchases rounded up to the nearest dollar and transferred to your Chime savings account.

And that savings account is among the best on this list. Your cash earns 2.00% APY¹, far higher than what most other round-up apps can manage.

¹The Annual Percentage Yield (“APY”) for the Chime Savings Account is variable and may change at any time. The disclosed APY is accurate as of May 12, 2023. No minimum balance required. Must have $0.01 in savings to earn interest.

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Qapital is a goal-based savings app that makes it easy and fun to save automatically. Its biggest downside: an unavoidable monthly fee of at least $3.

Round-up savings is actually just one way Qapital does this — it’s one of several custom rules (in this case, the “Round-Up Rule”) you can set to put your extra cash to work. Other rules include the Set & Forget Rule (which puts aside a set amount every week or month) and the Freelancer Rule (which saves a set amount from each deposit to cover estimated taxes).

Qapital also has an FDIC-insured checking account and debit card for everyday spending. Balances earn interest at a low rate, but it’s better than nothing.

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Worthy Bonds

Our Rating

Worthy Bonds is a crowdfunding platform, not a banking app. But it does allow round-up investments from a linked bank account, starting at just $10. With all bonds paying 5.65% APY, it’s the highest-yielding option on this list.

Monthly Fee

Deposit Insurance

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Worthy Bonds is not a traditional round-up savings app, if there even is such a thing. It’s a crowdfunding platform that sells shares (also called Worthy Bonds) in loans made to small businesses and development projects across America.

All Worthy Bonds yield 5.65% APY. If you want, you can link an external bank account to your Worthy Bonds account and round up each purchase to the nearest dollar. Once your balance hits $10 — the value of a Worthy Bond — Worthy Bonds buys you a new bond.

Worthy Bonds is a fun and rewarding way to support everyday entrepreneurs, but there’s a catch: no FDIC insurance. So don’t invest more than you can afford to lose.

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Greenlight

Our Rating

Greenlight is a family finance app that helps kids (and parents) manage and grow their money. With high-yield savings, an investment platform, and even a credit card for parents, it’s the most comprehensive app on this list.

Monthly Fee

$4.99 and up

Up to 5.00% APY

Deposit Insurance

Up to $250,000

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Greenlight is an online custodial bank account that’s designed to help parents teach their children about money. A Greenlight account comes with a customized debit card and advanced ways to save and earn, including round-ups. Every time your children swipe their customized debit cards, the total value of the purchase is rounded to the nearest dollar and the spare change is transferred to their savings account.

That spare change has the potential to earn much more change. Depending on the type of account you open, your children can earn between 1% and 5.00% APY interest on their savings.

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Methodology: How We Select the Best Round-Up Apps

We used six metrics when comparing the micro-saving and micro-investing apps that offer round-up saving functionality. These metrics relate to the cost of the service, allocation of money saved through round-ups, the types of accounts they offer, and other functionality. Here’s what we paid the most attention to in our analysis.

Cost

Round-up apps are all about saving money, so it’s pointless to use them if the fees eat all your savings. To be fair, most apps with this functionality charge reasonable fees, but we did come across a few with fees that were a huge turnoff.

All apps on our list cost under $10 per month, even for the most premium memberships. Two options — Chime and Worthy Bonds — are 100% free to use with no monthly or hidden fees.

How Round-Ups Are Used

It’s important that the money you save grows over time. After all, inflation is a very real force in finance — if your money isn’t growing, it’s shrinking. All the options on our list offer ways to grow the money you set aside, whether through investing in the stock market or earning a meaningful interest rate on your savings balance.

Custodial Accounts

Financial education is valuable at any age, and the sooner you start teaching your kids concepts like savings, the better off they’ll be.

That’s why options like Greenlight are on our list. Custodial accounts and giving kids access to financial information are a great way to teach your children about money management.

Risk Management

Many of the best round-up apps focus on micro-investing — investing small amounts of money over time — to begin building a meaningful portfolio. But investing can be risky. We paid close attention to the risk management features each investing-focused round-up app offers. Every investment-focused app on this list offers highly diversified stock and bond ETFs to help keep risks at bay.

Savings Triggers

Round-ups are a great way to start your savings, but if you’re only saving your spare change, it will take forever to generate a meaningful safety net. All options on this list offer round-ups as well as at least one other savings trigger, like the ability to automatically transfer money to savings on a weekly, biweekly, or monthly basis.

Some apps offer other, more elaborate savings triggers.

For example, Qapital offers several triggers. You can set a spending budget, and when you spend less, the difference automatically goes into your savings.

Additional Banking Features

According to the FDIC, about 5.4% of Americans — more than 7 million people — don’t have bank accounts. That’s why we love to see companies like Chime make quality banking services available to everyone. Many of the companies that made our list offer accessible online banking services.

Round-Up App FAQs (Frequently Asked Questions)

If you’ve never used a round-up app, chances are you have a few questions you need answers to before you get started. Answers to some of the most common are below.

Do Round-Up Savings Work?

Round-up savings apps are a great way to kick start your savings, but their effectiveness largely depends on you. If you don’t spend frequently, round-up savings won’t generate meaningful balances. It’s best to use this feature as a small part of your work toward your overall goal of saving money.

If you want to aggressively save money, consider using round-ups in conjunction with other features, like scheduled savings contributions.

Which Is Better: Acorns or Stash?

That depends on how you’d like to invest your savings. If you’re interested in building and managing your own investment portfolio of individual stocks and ETFs, Stash is the way to go. If you’d rather let the pros handle the investment decisions and rebalancing efforts, Acorns is your best bet.

What Is the Best Round-Up App for Kids?

The hands-down best round-up app for kids is Greenlight. The platform was designed to give children some financial independence while giving parents a fun way to teach financial literacy. However, if you want a family experience on a platform where your and your children’s accounts can be viewed in the same place, you may want to consider Acorns.

Final Word

The options listed above are our favorite automatic savings apps, but by now you know they’re not all the same. Each app has its own features, costs, pros, and cons. Here are a few features you should compare before you decide which one to sign up for:

Cost. Some round-up apps are free and others have monthly fees. Consider the cost and how it might impact your savings before you sign up.
Banking Features. Are you one of the millions of Americans who are underserved by traditional banks? If so, consider signing up for an option like Chime that offers complete online bank accounts.
Investing or Saving. Do you want to grow your money in the stock market or a savings account? Have you considered investing in high-yield savings products like those offered at Worthy Bonds? Make sure you consider where your money’s going when you round up before you sign up with a provider.
Do You Have Children? If you have children, consider signing up for an app that offers custodial accounts, or signing up for Greenlight for your children and using a different app for yourself.

STASH DISCLOSURES

Paid non-client endorsement. See Apple App Store and Google Play reviews. View important disclosures.

Nothing in this material should be construed as an offer, recommendation, or solicitation to buy or sell any security. All investments are subject to risk and may lose value.

¹ Stash Banking services provided by Stride Bank, N.A., Member FDIC. The Stash Stock-Back® Debit Mastercard® is issued by Stride Bank pursuant to license from Mastercard International. Mastercard and the circles design are registered trademarks of Mastercard International Incorporated. Any earned stock rewards will be held in your Stash Invest account. Investment products and services provided by Stash Investments LLC and are Not FDIC Insured, Not Bank Guaranteed, and May Lose Value.

² All rewards earned through use of the Stash Stock-Back® Debit Mastercard® will be fulfilled by Stash Investments LLC and are subject to Terms and Conditions. You will bear the standard fees and expenses reflected in the pricing of the investments that you earn, plus fees for various ancillary services charged by Stash. In order to earn stock in the program, the Stash Stock-Back® Debit Mastercard must be used to make a qualifying purchase. Stock rewards that are paid to participating customers via the Stash Stock Back program, are Not FDIC Insured, Not Bank Guaranteed, and May Lose Value.

3 Group life insurance coverage provided through Avibra, Inc. Stash is a paid partner of Avibra. Only individuals who opened Stash accounts after 11/6/20, aged 18-54 and who are residents of one of the 50 U.S. states or DC are eligible for group life insurance coverage, subject to availability. Individuals with certain pre-existing medical conditions may not be eligible for the full coverage above, but may instead receive less coverage. All insurance products are subject to state availability, issue limitations and contractual terms and conditions, any of which may change at any time and without notice. Please see Terms and Conditions for full details. Stash may receive compensation from business partners in connection with certain promotions in which Stash refers clients to such partners for the purchase of non-investment consumer products or services. Clients are, however, not required to purchase the products and services Stash promotes.

Stash has full authority to manage a “Smart Portfolio,” a discretionary managed account. Diversification and asset allocation do not guarantee a profit, nor do they eliminate the risk of loss of principal. Stash does not guarantee any level of performance or that any client will avoid losses in their account.

Joshua Rodriguez has worked in the finance and investing industry for more than a decade. In 2012, he decided he was ready to break free from the 9 to 5 rat race. By 2013, he became his own boss and hasn’t looked back since. Today, Joshua enjoys sharing his experience and expertise with up and comers to help enrich the financial lives of the masses rather than fuel the ongoing economic divide. When he’s not writing, helping up and comers in the freelance industry, and making his own investments and wise financial decisions, Joshua enjoys spending time with his wife, son, daughter, and eight large breed dogs. See what Joshua is up to by following his Twitter or contact him through his website, CNA Finance.

Source: moneycrashers.com

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May 10, 2023 by Brett Tams

Save more, spend smarter, and make your money go further

Making your money work for you is an important step on the road to financial security and independence. Earning money by trading your time is important, but it’s just as important to find a way to make money without having to be actively involved. While you might dream of being able to make money while you sleep, there are plenty of steps you can take that will help put your money to work.

Pay Down Your Debt

The most important thing that you can do to make your money work for you is to pay down and eliminate your high-interest debt. This includes things like credit card payments, some auto loans, and other types of consumer debt. You may be paying up to 20% or more in interest — which means that when you put money towards paying off that debt you’re getting a 20% return on your investment. It’s hard to beat that kind of guaranteed return.

Start a budget, figure out your income and expenses and start paying down that debt. The exact debt repayment strategy that you use is less important. What is important is that you make a plan and start sooner rather than later. Once you have eliminated your high-interest debt, you can start with the other suggestions in this article.

Open a High-Yield Savings Account

One place to start can be to open up a high-yield savings account that is separate from your checking account where you keep the money to pay your regular monthly expenses. This is important for two reasons. The first is that keeping your savings separate from the money you use for your regular savings helps keep you from raiding your savings to pay your bills.

The second reason is that a savings account may offer slightly higher interest rates than a checking account. Currently, interest rates are at historical lows. That is great for refinancing or taking out a mortgage, but not great for savings accounts. Still, a high-yield savings account is a great place to put your emergency fund money. For anything more than that, you’ll want to look at investments that offer higher returns.

Grow Your Wealth Through Investing

If inflation hovers around 2-3% every year, any investments you have should make at least that much. Otherwise, while you may have more money, that money will be worth less than it was the year before. If all of your money is in a savings account earning 1% interest or less, then you are actually LOSING money to inflation each year. There are many ways to earn residual income, and you’ll want to pick the one that makes the most sense for you. As one example, Investing in the stock market has historically returned around 7% per year.

Take Advantage of Credit Card Rewards

Another way to make your money work for you is to take advantage of credit card rewards. Many credit cards offer rewards of up to 5% back or more in certain spending categories. There are also several cards that offer initial welcome bonuses that are worth $1000 or more. Taking the time to strategically use credit cards can be a worthwhile investment. Check out our list of the best rewards credit cards to see if one of them might make sense for you.

Start a Passive Income Stream

The holy grail of financial independence is passive income. Passive income is income that continues to make money with little to no day-to-day involvement on your part. There are many different ways to generate passive income. A few passive income ideas might be creating and selling crafts, writing a guide or book, starting a blog, or investing in the stock market.

Investing time and money in real estate can also be a way to earn (relatively) passive income. While rental real estate is not without complications, when it is all working, each month you earn rental income. That helps pay down your mortgage balance, hopefully with some extra left over each month. If you think that becoming a landlord is not for you, another way to invest in real estate is through a Real Estate Investment Trust (REIT). REITs combine some of the best parts of real estate and investing in the stock market.

The Bottom Line

There is an important difference between earning money and having your money work for you. While earning money through a job is important, the real key to financial security is earning passive income. Pay down your debt, start investing and watch the returns come in. You may not make money while you sleep, but following these tips will help set you on the right financial path.

Save more, spend smarter, and make your money go further

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Dan Miller is a freelance writer and founder of PointsWithACrew.com, a site that helps families to travel for free / cheap. His home base is in Cincinnati, but he tries to travel the world as much as possible with his wife and 6 kids. More from Dan Miller

Source: mint.intuit.com