Digit: How To Automate Your Savings

Glamorous Paper has just launched a new category called Lifestyle. In lifestyle, we will give tips and tricks we’ve found useful in our own lives that we hope will help improve yours. In our first Lifestyle post, we will dive a bit into personal finance which we feel interests or should interest our readers. We will talk about Digit, a new startup which that promises automate your savings. If you’re trying to save money in the new year, this post is definitely for you.

Personal finance is an important and interesting topic that a lot of people try to avoid because it makes them stressed. If you’re unhappy with where you are financially, avoiding the topic will not help. I’ve struggled with dealing with my finances head on and it’s something that continues to be stressful. Knowing exactly how bad or good your financial situation is will help you plan and set goals. I’ve been trying to save money every month and I’ve been pretty good about doing that so far. Technology has made it easier for people to manage their money. However, it’s still a mind game. I’m always tempted by that caramel macchiato (my favorite drink) from Starbucks every time I walk or drive passed one. It seems like there’s a Starbucks on every corner, I can’t escape them! I have to at least get the grande (does anyone ever get a tall?) and at $5 a cup, it’s definitely not cheap!

We’ll often look at these small indulgences as harmless. We’ll think “a few bucks here, a few bucks there” and not look at the big picture and realize how much money is actually wasted throughout the week. I’m not saying completely forbid yourself from having Starbucks but imagine going from having Starbucks every day to Fridays only. I tried this and started to value that macchiato so much as opposed to it being just an everyday thing. I looked forward to Fridays because I got a treat. It made me value that macchiato more and save money.

Looking at our finances and how much we actually waste is stressful, which is why people sometimes put it off or don’t look at all. I know that I’m definitely one of those people. A lot of blogs will talk about transferring money to savings every time you get paid and sticking to that. That’s great but after you’ve come up with a “number” of dollars to save (how do you even come up with this magical number?), you’ll always see that amount sitting in your savings. Every time you login to your bank account, it’s there temping you. How easy is it to transfer half (or all) of it to checking? It’s too easy. So you’ve been doing great about savings but then in the middle of the month you’ll transfer a little and spend it.

To combat this, some suggest an online bank like CapitalOne 360 which has a 0.75% APY so your savings interest and it’s out of your sight and a little more difficult to transfer to your checking. However, we still have the problem of trying to figure out how much to transfer. What if it’s too much and we overdraw our account? I’ve been there many times. What if it’s too little we’re saving and we overspend? I’ve definitely been there too.

digit logo

Enter Digit. Digit is a new start up that just came out of beta that will analyze your checking account and calculate exactly how much you can afford to save each month. You have to connect it to your bank account which might be a little scary but I was curious and said why not? Once it has access to your checking, it’ll analyze your transactions over the past few months and determine what are your expenses and discretionary spending. With this information, it’ll start making debits to your checking account.

Digit doesn’t have an app, they’re completely SMS based. They have a list of commands you can text them to find out your checking account balance, Digit savings balance, withdraw funds (to send the money back to your checking), and pause savings. This makes it super simple, super easy.

I’ve been using Digit for 2 weeks now and managed to save $21.03. The first time Digit was shy and only took $0.86 but the next time it was $5.96! The interesting part is I didn’t even notice that this money was missing from my account. It’s awesome how I’ve managed to save over $20 without doing anything (not even noticing that it’s missing). Digit will text you your checking account balance every morning (which you can turn off if you want) and tell you when it’s saved you money. You can withdraw the money at any time, just text “withdraw” to Digit. They promise never to over-draft your account and will refund you any fees incurred if somehow they manage to take too much.

The only negative is you’re not earning any interest with your Digit savings. Honestly, you’re not making a ton of money by keeping it in an interest bearing savings account anyway. I would seriously advise you guys to at least check it out and try Digit, it makes total sense. They figure out how much I can afford to save so I don’t have to. They’re also offering $5 for every referral you get, so if you’re the first of your friends to sign up and tell your friends you’re earning $5 for letting them know about a cool service.

What do you think about this tool? Should we talk more about this and other money management tools? I know this is a pretty length post but let us know in comments or on Twitter using #glamorouspaper if you read it and your thoughts on Digit and topics we should cover in our new category Lifestyle.

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