For a long time, money was a challenge for me. I accrued over $50,000 in student loans from college and worked two jobs to pay them off before I turned 29. I took a business loan of over $100,000 in 2010 and then watched as my business failed to thrive, leaving me to pay back to the loan and additional debts. I’ve since finished paying the business loan off and learned a ton about finances along the way.
I’m still learning in fact! As I get ever better with managing my money, I want to share some of the ways that I’m able to effortlessly save and build my wealth. It’s a pleasure taking a peek at my savings and discretionary spending accounts and seeing balances that continue to grow, freeing me up to do more and more things that I enjoy all while saving towards future goals. Saving money and earning money should be simple and fun!
Recently I shared scenes from my Costa Rica vacation. Though my boyfriend got that trip for us as a gift, we travel often and both regularly contribute towards the trips. The easiest way I’ve found to save for the trips we love to take is with Digit. Today I’m going to tell you what Digit is, how it works and why I find it so easy and useful.
So what is Digit? It’s an automatic savings tool that interfaces directly with my bank. Every 2-3 days, Digit transfers a small amount of money from my checking account into a Digit savings account. That money accrues as long as I’d like, and I can withdraw the money from Digit whenever I’m ready. There are no limits on how often or how much I can withdraw, and my savings is kept at FDIC insured banks and managed by Digit. In the 6 months after Digit launched in 2015 it managed over $4,000,000. Today it manages many times that and has matured into a well-known company, especially among Millennials.
There are no fees to use Digit, no minimum balance and the service is completely FREE. UPDATE April 13 2017: As of April 15, Digit will begin charging $2.99 per month.
What I love about this tool is that it’s so easy! Saving money can be painful if I have to think about it, and there are so many things I want to use my money on each month. Digit is amazing because it takes all the thinking out of the savings process. After a very simple sign-up process and connecting to your bank, Digit observes your cash flow for a few days and using its smart algorithm (which looks at things like what your balance is, what bills you have due, and your spending patterns) it starts to transfer bits of money (think $10 here, $28 there, $17 another day, the average amount is $18) to your Digit savings account. I can leave it alone to do automatic transfers or I can change how much, how often, anything I’d like. I can even pause or stop transfers to saving as needed. I can do this all via my Digit online account or even my phone, which I’ll talk more about below.
Many major banks are partners with Digit, from Bank of America to Wells Fargo to Chase and so on. The company has a very healthy backing of venture capital and also earns money from the interest our Digit savings accounts earn.
You control most of Digit’s functions via text on your phone. Digit knows many commands — here’s a list of a bunch of them. One of the first things I did after joining was to set a minimum balance for my checking account. This way, I’d never accidentally save my way into an overdraft fee! I can also tell Digit to “save more”, “save less”, “pause” or “unpause”, among many other commands.
For me, Digit is not a long-term savings plan. It’s a short-term way to save for specific goals, like a new designer bag, a vacation, or perhaps a new phone.
Above is a great example of how Digit’s texting service works — you can even use emojis to set up a specific savings purpose! I most recently used Digit to save up for my wonderful new Chloe bag I’m immensely enjoying. Before I knew it I’d saved up enough money to get the bag I wanted. Having separate accounts for each financial goal is very useful and can help you get to your goals much quicker.
I’m also at ease knowing that I can turn off savings transfers to Digit whenever I want, and that my money is in a FDIC-insured bank account just like a normal bank would have.
You may be wondering about the following…
Why do I use Digit over other savings methods?
Although I have a savings account (as well as savings through investments), Digit is perfect for my short-term savings goals. I have set up my account to send me a balance update each morning and this helps keep me on track for my short-term savings goals, towards things like vacations, excursions or big purchases.
What makes Digit so great anyway?
For people like me who have or have had a hard time saving money, Digit is the ideal solution. Digit makes building up savings easy because it uses an algorithm to watch your spending habits, and then put away very small chunks of money that don’t hurt to lose, but add up to a lot!
Unlike many bank or online services, Digit is completely free. There are no fees for transfers, withdrawals, their service, or anything else.
What if I don’t carry a big balance in my bank account?
Digit can work with an account of any size to help you save money. It’s designed to ensure that you never overdraft from your bank account to add to your Digit savings. And as mentioned above, you can easily set a minimum balance for your bank account to have before Digit makes a transfer. You can also pause Digit at anytime.
Can you stop Digit transfers?
Yes, it’s very easy to pause or stop Digit transfers as desired. You can check the quick reference guide for steps.
Is Digit safe?
Yes, absolutely, I wouldn’t use the service otherwise!! Digit uses FDIC insured banks to create your Digit savings account, so your money is in a regular savings account that would be protected up to $250,000 just like any account you’d open in person yourself at bank. Digit just takes care of all the account setup for you!
Digit has opened up a limited number invites for free new accounts!
All you need to do to get started is:
1 – Register for Digit via my invite link
2 – Provide Digit with your cell phone number — remember, though it has a website Digit is primarily an app, and will text with you for settings and updates.
3 – Connect a bank account to Digit
4 – Let the savings begin!!!
Are you using Digit? What would you like to save up for right now? What do you want help saving for?