I have been asked on several occasions about using Digit to automate my savings. I used Acorn before because I was more interested in investing. Automated savings using those apps don’t work for me. The concept is that when you purchase something the amount is rounded up and that difference is placed into a separate savings account. Such an app wouldn’t work for me because:
1. I already save by having sums of my biweekly salary going into specific accounts (savings and college fund).
2. Given the amount I use my debit card it will never be enough to get me to any significant savings. Also, I am an admitted plastic junkie. I would be the type of person to swipe all the time for anything just to get a transfer. I’d end up over spending or back in debt where it would take me awhile to get back out.
3. Since I have created a tight budget and with all that goes out towards savings the extra that I was “saving” per month (maybe $50) was running me into a deficit. I budget almost down to the penny so me saving extra was ruining my cash flow. For example, after all my savings and other expenses I’m left with $144 per month. Less $50 of that leaves me with $90. In my mind I think I have an extra $144 to play with when in reality it’s only $90. May not be big to you but it made a difference to me.
4. I am now disciplined enough to save and not touch the savings. On occasion, and if I have a little extra left over at the end of the month, I take a small portion of that to put into my emergency fund.
Basically, since I automate almost everything down to the penny the app is not a good savings tool for me. For anyone who struggles with setting money aside or likes the idea of not thinking about their money this app is great.