In April of 2019, I decided to embark on a bit of an experiment. This experiment entailed downloading an app called Digit and seeing how much cash I could stash away with no effort of my own.
What Is Digit?
Digit is a user-friendly app that enables the user to meet specific savings goals without any human interaction (after the initial set up). When you download the app, you link your bank account and can choose a specific savings rate or let the app take a percentage of your balance based on a set algorithm.
This algorithm is calculated by factoring each of the following pieces of information:
- Checking balance
- Upcoming income
- Upcoming bills
- Historical spending habits (of the user)
Once the app has enough information on your spending habits, it begins to start saving on your behalf. Usually Digit transfers money from your bank account to your personalized Digit savings account every 2-3 days.
Your Digit savings account can be titled as you please and is FDIC insured up for $250,000. The app also offers a 1% annualized savings bonus for every three months that you consecutively save money through digit.
All transactions are viewable within the app but an added benefit is being able to text their SMS service to check your balance, pause any withdrawals and save extra money.
Overall, Digit is virtually 100% hands-off and allows you to save your money passively.
Sign up for Digit through this link and receive a free $5 bonus from me! đŸ™‚
Why I Decided To Try Digit
I had been reading about different savings apps for some time, I wanted to see how truly passive these savings apps claimed to be. After all, what better of a way to prove to people that even putting a little bit away every day can add up greatly in the long run.
Anyway, Digit and Acorns consistently were rated the top two in the field. So I decided to give them each a go, but one at a time. So, Digit was first. The Acorns experiment has yet to start but I will definitely do a comparison of the two once completed.
As mentioned earlier, I downloaded the app and set up my account in April of 2019 so as of this point I have had a Digit account for 8 months. To be fair though, my Digit account wasn’t linked to my bank account for about 8 non-consecutive weeks. This was entirely my fault. I kept resetting accounts and switching things around so Digit kept get pushed to the side.
That said, in those 8 months (6 really?) Digit was able to stash away over $2,000 in a Rainy Day Fund for me. That is about $333 a month. While this may not seem like a lot of money, it definitely helped prove my hypothesis to myself.
The point of this entire experiment was to prove that you could stash away minimal amounts of cash every single day, so tiny that you wouldn’t notice, and over a period of time you would have a nice lump of change built up. Also, the hope would be that this would help make saving a habit.
This would be something I would provide to any naysayers who don’t believe that they have any extra money to save.
Digit really helps make the point that regardless of your income, you can still save money.
Something worth noting is that I would not recommend using Digit for the long-term. I think this is a great tool to help start you off on your savings journey, but I don’t think it should be used forever.
Instead, once you prove to yourself that you actually can save, I would argue that you could just pay yourself first by setting up automatic transfers. All you would have to do is set up a reoccurring automatic transfer that occurs every once of your paydays. You could choose how much you want to save and therefore you are setting your own savings rate (check out this article for more on that).
This is what we do and it really helps us stay in line with our savings goals without ever really having to think about it.
Nevertheless, using an app like Digit is still a great way to kick start your savings goals. You can finally prove to yourself that you actually can save money! All you have to do is download the app, set up your account and let Digit do the rest.
Sign up for Digit through this link and receive a free $5 bonus from me! đŸ™‚
Pros
- Helps non-savers save money without thinking about it
- Completely automatic once you set up your account
- You can earn $5 by referring friends
Cons
- There is a $2.99/month fee
- The savings bonus is nothing major (nothing to scoff at but still not a game changer)
Final Thoughts
If you are already an avid saver then Digit probably isn’t worth the monthly fee to you. However, if you could really use some assistance to kick your savings game off, I would definitely recommend giving this app a fair shot. Try it for at least three months, you’ll be surprised at how easy it is to save money with someone does all the work for you!
Have you ever used Digit? Did you like it? Let me know in the comments! đŸ™‚
Sign up for Digit through this link and receive a free $5 bonus from me! đŸ™‚
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