Putting money aside is unbelievably tough.
Even though I naturally lean toward frugality, I’ve never been very good at stashing cash for anything besides trips.
Until about a year ago I had no emergency savings and was only barely contributing to retirement.
I knew that wasn’t smart, so I set up automatic deposits to a Roth IRA.
But that still left me without an emergency cushion.
To fix that, I needed savings to be A) automatic, otherwise I wouldn’t stick with it, and B) held in a separate account, otherwise I’d likely blow it on travel.
I kept putting it off…
Until I discovered a new service that watches your checking account and automatically moves amounts you can afford into savings every few days.
I signed up about ten months ago and haven’t looked back. Here’s the rundown.
The Automatic Method That Grew My Savings to Almost $2K
So how did I finally build an emergency fund?
Digit.
This clever app examines your paycheck and spending to “evaluate your income and expenditures, and locate funds it can safely set aside for you.”
Unlike a fixed transfer set up with your bank, Digit doesn’t take the same dollar amount each week or month.
Instead, it watches your account activity and spending habits, and “attempts to move small sums from your checking into your Digit account” on a regular basis.
The transfers usually range from $5 to $50, according to Digit, though I’ve seen them reach $61 and dip to as little as $0.70.
Once money lands in your FDIC-insured Digit savings account, it remains there until you request it back.
When you need funds, text Digit or make a request through the site or app, and the money returns to your checking account the next business day. You can move funds back as often as you want.
The service is free for the first 30 days, then costs $2.99 per month after that.
Access Digit via the web or its iPhone and Android apps. It works with more than 2,500 banks and credit unions across the U.S., but isn’t available internationally yet.
What I Accumulated With This Mindless Savings App
I joined Digit in May 2015. By March 2016, I had accumulated $1,774.88.
If I weren’t so lazy and referred five friends, I could snag an extra $25 and push past the $2,000 mark.
It might seem obvious, but worth mentioning: The more cash you keep in checking, the more Digit can save for you.
After I increased my income by taking a full-time writing position at Savinly, my checking balance stayed higher. Digit noticed it could pull larger amounts — and my savings grew quickly.
That’s the genius of Digit’s approach: it continually adapts to your cash flow. If funds are tight, your savings will accumulate more slowly — but even small amounts add up over time.
Is Digit a Good Fit for You?
What works for me won’t be ideal for everyone.
So, is Digit right for you?
If you require total control over every dollar, probably not.
Because I use Digit, my checking balance fluctuates, which doesn’t bother me. But if you need absolute predictability, this might not be your best option.
That said, Digit keeps you informed: you can text for your savings or checking balances and receive alerts whenever money moves.
I turned off the frequent notifications because they annoyed me, but others might appreciate the extra reassurance.
If your checking account is often near zero, it’s likely not a fit.
Digit offers a no-overdraft guarantee, but if your account is frequently near empty, Digit won’t be able to save much for you.
If you’re uneasy about linking a site to your bank, probably not.
Digit requires a connection to your checking account to operate.
I’m comfortable because Digit uses 128-bit bank-level encryption and doesn’t store your bank password. Plus, deposited funds are FDIC-insured up to $250,000.
If you want to earn meaningful interest, this isn’t it.
This is arguably Digit’s biggest downside.
Because it charges a modest fee, Digit operates by investing your balances and retaining the interest it earns.
For me, the interest a regular savings account would pay is negligible, so I’m fine letting Digit keep the cents. It’s worth avoiding the effort of conscious saving (which is essentially impossible for me).
Additionally, Digit awards quarterly “Savings Bonuses.”
If you want to save automatically without thinking about it, absolutely yes.
I couldn’t be more pleased with Digit so far.
Seriously — I’ve nearly got $2,000 tucked away. My emergency fund still isn’t where I ultimately want it, but it’s infinitely better than zero.
I plan to let it continue growing and will eventually move it into an account that earns interest.
For now, I like that it’s separate and out of sight — it keeps me from splurging on plane tickets.
Want more details? Check out our digit review. Interested in trying it? Learn how to save money with digit savings app.
