If you have ever tried to start a new savings habit, you know it can feel a lot like a new diet. It goes well in the beginning, but there are often surprises that can derail your progress.
Boozy weekend brunches. New running shoes. Last minute concert tickets.
Before you know it, the “miscellaneous” line in your budget has ballooned out of control. Instead of feeling guilty, you insist you work hard and “deserve” these splurges.
That's what I have told myself, anyway.
But the fact remains—you have missed another month's savings goals.
When extra money lingers in your account, it's way too tempting to spend it. This is why savings automation can be so powerful.
Disclosure: This post may contain affiliate links.
What is Digit?
Digit is a money saving app backed by Google's venture arm.
Digit helps you save effortlessly through the power of automation.
When I first heard about Digit, I was hesitant to sign up. I'm pretty traditional when it comes to saving and budgeting. This typically means steering clear of the latest money management technology. However, I finally signed up in April. And since then, I have effortlessly saved $837.49!
How Digit Works
Getting started with Digit is pretty simple:
Sign up in minutes
Start by visiting Digit's website and entering your name, email address, and cell phone number. They will confirm your cell phone number to use with their SMS account management (more on that below!)
Connect your checking account
Automating your savings with Digit can begin once you have connected your checking account. This gives Digit the ability to analyze your cash flow. From here, the software determines how much can safely be set aside.
If you're concerned about security, you can rest assured knowing Digit doesn't store your bank login. All of your information is anonymized and encrypted. Also, your money is FDIC insured up to a balance of $250,000.
Digit saves a little every 2-3 days
Every few days Digit automatically transfers ($5-50) into a separate account. This is based upon what you can afford. They even offer a no-overdraft guarantee.
“It can find an amount that won’t put you in a bad place, and it blends in with your traditional spending, so you won’t even feel the money’s missing,” Digit CEO Ethan Bloch explains.
Easily access your money
When you are ready to access your savings, Digit can transfer the money by the following business day. This is initiated through text message!
The Perks of Digit
Free My favorite price! There are absolutely no fees to use Digit. There is no need to worry about too many transfers or account minimums.
SMS account management Digit has a basic desktop dashboard, but otherwise, it's basically app-less. It feels weird at first, but their simple functionality grows on you quickly.
Digit manages your account through daily SMS notifications. There are only eight commands, and this keeps things simple:
- savings – view your savings balance
- checking – view your checking balance
- recent – view your recent transactions
- withdraw – make a withdrawal from your digit savings
- save – move money into your digit savings balance
- pause – pause saving
- notifications – adjust balance updates
- commands – view all possible commands
Easy withdrawal – You know how most banks take a few days to transfer funds? That's not the case with Digit. Once you have requested a withdrawal, you will have access to your money on the following business day.
Referral bonus – You know what's even better than saving with Digit? Earning $5 for each friend you refer.
The Downsides of Digit
Minimal interest Digit's lack of interest is kind of a drag. Instead of interest, they offer Savings Bonuses (.5 for every $100, every three months = 0.05% return). I get around that by regularly transferring my savings into a high-interest account. Basically, I'm using Digit to identify “extra” money in my checking account, automatically set it aside, and then put it to better use.
Random savings algorithm I have no idea how their algorithm determines how much I can save every few days. If not having 100% control over your money gives you anxiety, you may not like this. Obsessive budgeters may find the random transfers annoying. However, it's comforting to know you can easily access the money within one business day.
Limited website functionality – Don't dig managing your Digit savings account through SMS? You're out of luck. The website is mobile-friendly, but it's just a basic snapshot of your account information.
Digit has won me over as a tactic for boosting savings automatically. Earning no interest isn't ideal, but their fast transfers and unlimited withdrawals make it easy to work around. Overall, it's a handy tool that I'll continue to use.
Readers: Have you tried Digit? Do you recommend other savings apps?