Over the years, people have set up all sorts of methods to ignore the reality that they have a savings account. Automatic contributions from direct-deposited paychecks comprise one way to save without thinking. A more extreme way is to set up a new account at different bank specifically for savings and then pretend it doesn’t exist — out of sight, out of mind, after all. But the emergence of new financial technology has made saving easier than ever and you don’t need to set up a secret bank account.
Savings establishes a safety net for emergencies and it can create a runway for a large purchase or investment in something one believes in, whether that be a new business or more education.
But saving is hard: “A penny saved is a penny earned” couldn’t be truer for lots of us. One Redditor even devised a mental “time machine” scenario to save:
I like to imagine that I’m taking that money and just putting it into a time machine that is instantly being sent to retirement age me. And I imagine how psyched an older and more tired version of myself will be when the doors of that money-stuffed Delorean swing open.
More people may be using mind tricks like that one to save, according to Bank of America survey results released in early 2018 that showed that saving is on the rise among millennials (people 23-37): One in six millennials has more than $100,000 saved up.
If saving $100,000 seems impossible, there are other encouraging signs: Some 63 percent of those surveyed say they “are saving.” So, if you want to join the two in three millennials who aren’t spending their entire paycheck, below are three technologies to help you save without even thinking about it, thanks to algorithms and automation. In the era of justified outrage over confusing banking fees, these tech alternatives may save you money up-front, too.
What Digit Does: Digit sets up a ghost savings account for you, and the result a surprising amount of money saved after a relatively short amount of time — without you realizing it. “Every day, Digit checks your spending habits and moves money from your checking account to your Digit account, if you can afford it,” the service promises. “Easily withdraw your money any time.” And crucially, Digit offers to reimburse you in the “very unlikely event your account is overdrawn by Digit.”
The Digit Secret Sauce: Once you connect Digit to your checking account, it monitors spending patterns and withdraws money two or three times a week in amounts of $10 and $30. It can be as little as a nickel or as high as $150, depending on your balance and spending habits. You text “save more” or “save less” to Digit’s texting chatbot to settle on a savings that feels right for you. Find something that works for you and start saving.
How Does Digit Make Money? It’s free for the first 100 days and after that, it costs $2.99 a month.
One More Thing: I’ve used Digit for more than two years now so I want to offer you this tip before you get going: Turn off daily text notifications about your Digit savings balance. The less you think about it, the less you might be tempted to withdraw money. And if you buy your plane tickets more than a month before your trip, turn up saving as soon as you buy the tickets to build up some petty cash before you go.
What Qapital Does: Qapital is more than just a savings app. It offers checking and a Visa debit card to spend your money in the real world. It also allows you to set up goals in the app that enable you to divide your savings by project. Want to save up for a new bicycle? Make a goal for it. A new TV? Make your goal that amount. Even better, you can create “Joint Goals,” so you and your roommates can pitch in via the app. You can move money from your Goals section to your funding/checking account for free. With videos that show artists talking about their work Qapital is intent on positioning itself not just as a savings app, but one with a mission. That mission is to help people save for the things they want.
The Qapital Secret Sauce: “What Qapital is doing is trying to give us those tools that will help us live in a better way with our money,” says Dan Ariely, the chief behavioral economist for Qapital and a professor of psychology and behavioral economics at Duke University. Like some investing apps, Qapital puts its mission front-and-center: helping people live better lives by saving money and thinking more deeply about spending and saving. Oh, and watch Ariely’s full video. It’s fascinating, whether you choose Qapital to save or not.
How Does Qapital Make Money? The service is free, but there are of course ATM fees for you to pay. Qapital makes its money via fees from the debit card: “When you swipe it, we get a cut of the small fee Visa® charges to vendors for accepting cards,” the company states.
One More Thing: The only way to access your funds is through the app, so don’t look for a brick-and-mortar Qapital bank, not that you’d like to go to one, anyway.
What Chime Does: More than a savings account app, Chime is a full online bank that sets up automatic savings features that direct money into savings accounts every time you get paid. Chime definitely is seizing on the public’s frustration with corruption at the big established banks, releasing a video in February marketed to people upset over fees (of which there are many!). Like PayPal’s own expansion into banking features (FDIC-insured accounts and ATM cards), Chime might also be helpful for the “unbanked” population, which is decreasing across the world thanks to technology. World Bank research estimates there are 2 billion people without a bank account. It’s easier to rent an apartment, get a car, and get out of poverty if one has access to a bank account.
The Chime Secret Sauce: If you like getting paid early, Chime can help. If you get direct deposit from your employer, you’re eligible — it’s not a standard feature — to get your money two days earlier.
How Does Chime Make Money? Like Qapital, Chime makes its money off fees Visa charges vendors.
One more thing: Chime has its own news section, where anybody can become more informed about personal finance, which is an objectively awesome public service. “Chime members are tech-savvy consumers who want a modern, fee-free banking option,”a company rep tells Inverse. “Chime members are mainstream, mostly millennial and dispersed across the United States. The company is adding about 100,000 accounts a month, says the rep.
There you have it, three savings apps to download and crack open this year. Remember that not all of them may be available outside the United States. Love a savings app that’s not on here? Tell me your story at firstname.lastname@example.org.