Preparing for the future may seem redundant because no one actually knows what the future will look like. Life can be completely different a year from now. Things change unexpectedly. But, it’s always smart to be financially prepared for the future no matter what.
What we experience and do today is based upon what we accomplished or did not accomplish yesterday. If you want your financial situation to improve, like I do, then you have to prepare and do the work now.
I became an investor with Acorns back in 2018 and in my opinion, it’s one of the easiest investment methods for beginners to get started with. Today, I’m going to share a quick review of Acorns and the Digit app.
Acorns is for your all-in-one checking, investment and retirement accounts.
The signing up process is quick and easy, it can be done right from your phone. Of course you will need to link a funding source or bank account to your Acorns account when you sign up. Whichever primary funding source you select make sure it’s one that you don’t plan on changing anytime soon.
In order to switch your primary funding source you will need to supply documents- a voided check or a bank statement of the previous source in addition to your new source which can be a real hassle. Also, you can choose to have a personalized Acorns debit card mailed out to you but you have to contribute at least $25 into your account to get the card sent.
The lite tier account fee is $1.00 per month. The lite tier account allows you to have access to financial literacy material, the round-up feature, and opportunities to earn more money.
The personal tier account fee (which is what I currently have) is $3 per month. This account allows you to invest, save towards an IRA, earn more money, and spend smarter.
The family account tier is $5 per month. This account includes the personal tier benefits in addition to the “early investors” feature. This is a great option if you have kids and want to start investing and saving for them. The account can be easily transferred to the child or children later.
During tax time, you will need to report Acorns as earned income. Don’t worry, Acorns will send you an “end-of-the-year” tax form to your email address associated with your account that you will need when you go to file your taxes.
The Round-Up Feature.
Acorns offers an automatic spare change feature where every time you make a purchase using your linked bank account, Acorns will round up to the nearest dollar amount and will invest the spare change. It’s like every time you shop, you’re low key investing at the same time. I don’t know about you but I love the sound of paying myself to shop!
Recurring Investment & Savings Option.
Every month, every week, or every day (if you got it like that), you can set a certain amount to be deducted and added into your savings or investment accounts. The amount you want added can be as much or as little as you want and this option can be turned off and paused as needed. I had only been investing for a couple months and I had occurred a nice amount of money during that time.
When I became unemployed earlier this year, I had to pause on my investment account and I even made a withdraw, which I do not recommend ever doing. Withdrawing from your investment accounts early may incur a penalty or a fee. The only con I have with Acorns is that they should make your money harder to access so that you’re not dipping into it whenever you’re in a bind.
Just think if you invested $5.00 per day, that’s $35 a week, $140 per month for 12 months equals $1,680 annually for the next 40 years, totals to $73,000 + assuming a 6% annual return, that could be nearly $299K saved towards retirement.
Math wasn’t my strongest subject in school so don’t quote me on that. But, I’ll definitely take $73,000 instead of having $0 saved.
The first investment account type is for investing in large and small company stocks and bonds. I believe there is a total of 5 investing portfolios with Acorns which are: conservative, moderately conservative, moderate, moderately aggressive, and aggressive. I started at the moderately conservative level. I wanted as little risk as possible.
The second investment account type is for contributing to your Roth IRA (independent retirement account). I think it’s good to have an IRA in addition to your companies 401k retirement plan. I believe there’s a way you can rollover your 401k if you want to but I don’t know much info about that.
With the automatic investment savings option, you can choose the multiplier function of 2x ($1.00), 3x ($1.50), or 10x ($5.00). So, whatever amount you choose to have as your recurring savings amount, they will multiply it by doubling the amount, tripling the amount or times 10 which I think is a bit excessive. 3x works just fine for me.
Earn More Money.
If you are looking to earn more money, the Acorns app allows you to search and apply for open job opportunities. Some jobs may allow you to work from home. I haven’t dug too deep into this feature yet but it’s good to know. Also, there is a cash back option which is like a one-stop shop center for several different retailers like Walmart, Target, Starbucks, Door Dash, etc.
Sign up for Acorns using this link: https://signup.acorns.com/
I just love having this little app on my phone. Digit is your go-to for paying bills, reaching specific savings goals, and building a rainy day emergency fund. If you turn on the notifications, it’ll send you account balance texts, bill reminders, and other alerts. Just like with Acorns you have to link a funding source first. When you link a funding source Digit offers overdraft protection in case you over draw from your main funding source. Digit will try to transfer money into your account to essentially prevent over draft fees.
Recurring savings is honestly the best thing ever. The money is taken out before you even have time to think about it or miss it. If I had to remember to put money aside manually, it’ll never happen.
Here’s an example of an alert text:
If selected, Digit can automatically pay money towards your monthly bills like your cellphone bill, credit card payment, and student loan payment. This is a great way to fast track paying down debts.
There is an option to make an investment account but I already have Acorns for that so I don’t utilize this feature but someone might want to.
Digit’s savings bonus is calculated as 0.10% annually and is paid out every 3 months based on your average daily balances in your Digit accounts including you rainy day savings and the money accrued towards bill pay and your specific savings goals. And lastly, you can earn $5.00 for referring a friend to start using Digit. That’s a nice free cup of coffee 🙂
Sign up and download the Digit app using this link: https://digit.co/login
I am challenging myself and everyone who has read this post and my previous StackTober post (you can find the link below), to be in a better position financially by October 2021. Either by achieving a big savings goal, being one step closer to getting out of debt, or by having a flourishing investment account started.
Till next time,