How Automated Investing and Saving Services Help You Grow Your Money

Saving has long been considered too difficult and boring for many, which is why we tend to see such a low savings rate in the western world. The USA, for example, recorded an average personal savings rate of just 7.6 percent in 2019. But, could automated investing and saving services be the key to changing this statistic and unlocking the key to transforming our personal finances?

This is what we’ll break down in this article: 

• Why do we struggle to save?
• How can automated investing and saving apps help you?
• Which are some of the apps you can use?

 

Why do we struggle to save? 

There are various reasons why most people struggle to save, such as rising day-to-day living costs, mounting debt, and not earning enough money. However, the most common reason people struggle to save is that they simply forget to save or don’t put aside money at a logical time, such as payday.

According to Katherine Milkman, “One of the biggest reasons people don’t save is they fail to appreciate future gains. People tend to discount the future very heavily relative to the present.”

Many of us, prefer to focus on the here and now rather than what may be best for the long-term, so when it comes to payday, everything else takes priority from saving. This can be particularly dangerous, as saving does not only help protect you from financial emergencies, but can help you avoid debt, reduce your financial stress, and allow you to invest and grow your money.

 

How can automated investing and saving apps help you? 

Over the past five years or so, we’ve seen more and more fintech apps cropping up which are helping to make investing and saving significantly easier for the average person. Some of these apps have brilliant features that can make it significantly easier to manage your money and allow us to start saving more.

 

Autosave options

Many Fintech apps now allow you to transfer money automatically. For example, when you receive money every month, such as payday, you can have a certain allocated amount transferred to a savings or investing account. This allows you to pay yourself first and enables you to consistently save each month. Chime found that the people who enrol in their automatic savings program saved 240% more than those who aren’t enrolled.

 

Reduce and split bills 

 

Fintech apps such as Plum can also help you save on your bills and expenses. Their AI assistant will keep an eye on your bills, calculate how much you could save if you switched and let you know you if you’re being overcharged. You can then compare and switch seamlessly in a few taps. Plum has found that the average user saves themselves an average of £179 using their bill switching service.

 

Goals and pots 

 

Monzo and Revolut, amongst others, allow users to set up saving pots. These pots allow users to keep their savings separate from day-to-day spending. Pots can be used to save for specific things such as a holiday, wedding, emergency fund etc. They even make the saving experience more enjoyable by allowing you to add pictures to visualize your goal, track the progress you’re making towards your goal, and setting goal dates. If you don’t trust yourself to not touch your savings, there’s even a feature to lock your savings. This will restrict the money until a specified date in the future.

 

Helps you to budget 

Before you can begin to cut expenses or save money, you have to track exactly where your money goes each month. Many Fintech apps have built-in budgeting tools to help people analyze their spending. These budgeting tools allows users to set parameters around various spending categories such as rent, bills, entertainment, etc. Many apps also have automatic monitoring and instant notifications to let users know when they’re close to their set spending limits.

 

Automated investing solutions 

 

Arguably one of the most important areas in Fintech, which helps users grow their money is automated investing solutions. Investing has long been deemed inaccessible to most people, however, due to advancements in technology Fintech services are helping to democratize investing and make it accessible to the masses.

Most investing apps allow you to start investing from anywhere between $100-$500. These services can help determine users risk appetite and create an investment strategy that fits their needs. Some of these FinTech solutions even tap into the benefits of artificial intelligence to deliver a better investing experience. Investing puts your savings to work and allows your money to compound over time.

 

 

Which are some of the apps you can use? 

 

We briefly touched on some of the apps above which offer some great features. But here’s what we believe to be the top three Fintech apps.

 

Plum AI

Plum uses AI and smart algorithms to analyses your spending and determine what you can afford to save. It then allocates a portion of your money away each month in the form of round-ups and/or regular savings. Their app also allows you to save on bills and gives you the ability to automatically invest in various stocks to further grow your savings.

 

Nutmeg

Nutmeg is an automated investing service that builds and manages diversified portfolios, through using technology. The best part is, their technology does all the hard work for you by monitoring and rebalancing your portfolio to align with your goals. It’s a significantly cheaper option than using a financial advisor and is a great passive investing solution to help grow your money

 

Revolut

Revolut allows users to manage all of their finances from one place. Banking, saving, investing can all be done at the tip of a finger through Revolut. Revolut allows you to gain complete control of your finances and is perfect for people looking to save and invest more.

 

Final Thoughts… 

Saving and investing is difficult, challenging, and hard to stick to. However, with the help of such Fintech apps, the process becomes significantly easier and more enjoyable. Just remember, the hardest part about saving money is just getting started. Once you do start and it becomes a habit, then the process becomes second nature.