According to CNBC, 21% of Americans don’t put any of their income in savings. Costly living expenses and not getting around to it are the most common reasons why so many people don’t save. However, savings apps are making it easier than ever for individuals to build up a substantial amount of savings. But just what are the benefits of using these apps over more traditional methods of saving?
Savings Apps Encourage you to Save More
Many savings apps can help you save more than you otherwise would by stashing spare change away for you. Apps such as Digit, Keep the Change, and Acorns all round your everyday purchases up to the nearest dollar and either put the remaining amount into your savings account or invest it in the stock market. The Bank of America reports that if you buy a coffee once per week, you’ll save an additional $36.40 every year, and a further $76.95 will make its way into your savings account if you spend money weekly on your dry cleaning.
It’s estimated that 189 million Americans are in debt. Having debt can cause your credit score to decrease and lead to other repercussions. For example, 58% of millennials have been unable to obtain credit for large purchases due to low credit scores. The good news is that the factors that determine whether you’ll get credit or not aren’t always just based on your credit status. Some lenders will lend you cash when your credit history could be improved. Typically, this will be a smaller amount than normal.
But regardless of how much you borrow, a helpful tool for paying off debt can be a savings app, as they are a great budgeting tool. Many of them automatically assess and review your finances and will stop you from overspending on items you don’t need to ensure that you can meet your loan repayments. They also allow you to set savings goals monthly.
A Nudge in the Right Direction
Unfortunately, 58% of Americans have less than $1,000 in savings. Too often, saving nothing or very little becomes a habit, but savings apps are working to turn this around. These apps can be connected to your current account, and they can send prompts and nudges to encourage you to increase the amount you’re putting away each month. For example, if a bonus from work lands in your bank account or you cancel a magazine subscription, the app will send a message encouraging you to squirrel this sum of cash away.
Around the Clock Money Management
Last year, it was reported that 4% of bank branches closed down within the previous 12 months. Wells Fargo, Chase, Bank of America, and U.S. Bank all closed over 100 branches each in the space of the year. These closures make it difficult for the nation’s savers to move their cash around and track the state of their savings. As a result, many have lost faith in traditional methods of saving and avoid it altogether. But this is where savings apps come into their own as they allow consumers to manage their money around the clock. Whether it’s within minutes of being paid, at the end of the month, or even when they’re on vacation, a savings app user can now move their money around as freely as they want without having to worry about finding a branch that’s open near them.
Track Your Credit Score
According to the New York Post, 1 in 8 Americans is unaware of what their credit score is. Keeping track of your credit score is highly recommended as it allows you to make better financial decisions. However, this isn’t the only reason why you should monitor your credit score regularly. If your score unexpectedly plummets, it’s a sign that a lender has made an error. When this is the case, you should urgently contact the lender and ask them to rectify their mistake so that you don’t have issues obtaining credit in the future. Another possibility is that you’ve been a victim of fraud. In this instance, you need to alert the relevant lenders and authorities instantly so that the appropriate action is taken to fix your credit status and to stop the perpetrator.
Avoid Costly Bank Fees
Bank account holders in the U.S. are accustomed to paying more than $4.50 per month in fees, according to a Deposit Accounts study. Also, overdraft fees and ATM fees take a further $36.28 per month from individuals. But some savings apps are eliminating these fees, making it easier than ever to save as much as possible. Chime is a prime example of a no-fee savings app that is giving more to its customers. Also, putting a stop to fees, customers also benefit from not being able to spend more than what is in their account. So rather than falling into your overdraft when you attempt to make a purchase you can’t afford, the transaction will be declined.
Expert Financial Advice
A CNBC study found that 75% of Americans manage their finances and receive no financial advice. While it’s great that so many individuals are keen to take control of their own money, the nation’s $13.86 trillion debt crisis suggests that they need a helping hand. The Tony Robbins savings app provides financial advice from the man himself, as well as high-profile guests. While you can’t physically put any of your savings in this app, you can enter your personal information for a tailor-made solution to your finances.
Savings apps are certainly a popular way of saving right now, and they are becoming even more popular as more people are starting to use them and appreciate the multiple benefits that they offer. Whether it’s saving more money or receiving a helping hand, when it comes to budgeting or investing, you can be sure that there is a savings app out there that’s right for you.
Author Bio: Amy Fletcher is a freelance writer and researcher with a keen interest in business management. In recent years she has written for various online magazines, journals, and blogs. When she’s not writing she enjoys long walks with her daughter and two dogs.