Should You Let An App Handle Your Savings and Investing?
Being smart with your money means that you pay attention to earning, budgeting, saving, investing, and more. Of course, you also have to deal with the rest of daily life. So, sometimes it can feel overwhelming to prioritize each aspect of your finances. What if you let an app handles saving and investing? Is that something you’d be comfortable with? Or do you have doubts about the app’s ability to do what you really want it to do for you? Perhaps it depends on the app.
What Kind of App Handles Saving and Investing?
There are many different financial apps on the market today. Some of them specifically assist you with saving money. Others help you invest your money. There are apps for investing specifically in ETFS. Additionally, there are apps specifically for people interested in investing in cryptocurrency. Then there are broader apps that are about money management, which might also include saving and investing tools to varying degrees. So, honestly, there are a lot of choices out there if you’re looking for for an app that handles saving and investing.
Example: Digit App Handles Saving and Investing
Digit is one example of this type of money app. You set up both savings and investing goals inside of the Digit app. Then the app uses machine learning to help move your money around in ways that will allow you to meet these goals. The idea is that you have control over creating your own goals. And yet, you don’t have to stress constantly about the math behind making sure that you achieve those goals. You set them, the app does the work. And it does so in small increments, based upon your specific money situation, so that you’re achieving those goals without feeling the pain of excessive saving / investing.
Saving with Digit
Digit app handles saving and investing. This is in contrast to many other money apps that only handle one or the other. In terms of saving, you can create any number of savings goals, big or small. For example, you can say that you want to save $100 for Christmas gifts. You even set the date by which you want to achieve that goal. Then Digit will do the math to make sure that you’re financially able to pay your bills, etc, while also achieving your savings goals.
You can create multiple savings goals with multiple dates. So, for example, if you know that you need a certain amount for next year’s summer vacation, then set a goal for it. If you want to just set a small instant gratification goal to go get a massage next month, then set a goal for that. It’s all up to you. Additionally, you can create a Rainy Day Fund that Digit moves money into when you have extra money for it.
Moreover, you can set up goals to pay down your debt. Wouldn’t it be nice to not have to think every month about that debt and just let the app handle that for you instead? They have overdraft protection and other services as well. Therefore, you have some protections when using this tool.
Investing with Digit
Since the Digit app handles saving and investing, you also want to make sure that you consider the investment part. There are three core aspects to investing through this tool:
- Setting long term goals. This is similar to the “savings” part of the app. However, it’s for big budget items like saving for a house or for your child’s college education.
- Saving for retirement. Similarly, this is saving specifically to invest in your retirement. Of course, you might also have other retirement plans, such as your 401(k). But through Digit, you get an IRA. They use their machine learning tools too make sure that you maximize your investment in this retirement fund without exceeding annual limits. The app handles saving and investing so you don’t have to worry about whether you’re investing too much in the wrong places.
- Investing in ETFs. You can choose conservative, moderate, or aggressive investment styles. Then the app will do the work for you to figure out the right ETFs for investing your funds. People who are interested in investing but don’t want to do all of the legwork often find that tools that handle ETF investing for them are really useful.
Will You Let an App Handle Your Saving and Investing?
Digit is just one example of a saving and investing app, of course. There are many different ones to choose from. After all, this is a really popular way to automate your finances these days. Automating your finances frees your time to earn more money, enjoy your friends or family, or have a hobby. Plus it often reduces stress because you’re not thinking about your money all of the time. The apps and tools do that “worrying” for you.
Is Money Tech in General An Issue?
That said, not everyone will feel comfortable enough to let an app handle your saving and investing. Some people are wary of the apps. Heck, there are some people who still go in to the bank teller every single time the have to do a banking transaction. I, on the other hand, haven’t gone to a bank teller for anything except rolls of quarters since mobile deposit became an option! So, for some people, this just isn’t comfortable, yet. And yet, it could benefit you. So perhaps consider starting out really small to see if it’s something that could work for you.
Is Control Over Money Decisions An Issue?
We all have different money psychology. You actually do have a lot of control even when you let an app handle your saving and investing. With Digit, for example, you set the goals. You can also change them at any time. It’s just that once you’ve made the decision, you let the app handle the work. However, even this is too much loss of control for some people. In particular, if you’re the kind of investor who likes to check the stocks regularly, move money around a lot, and choose very specific investments rather than ETFs, then perhaps this type of app isn’t for you. But it might be. Again, it’s always worth a try to put a small amount of money into a new tool just to see if it turns out to be the right thing for you.
So, will you let an app handle saving and investing? Why or why not? Share in the comments for what could be a really interesting community conversation!
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