Money-saving apps that might actually work
Try these if you want to invest on the go or pay off debt faster
With many Millennials turning to their smartphones to pay up instead of digging into their wallets for cash, it’s little surprise that everyone from start-ups to big banks want to smack a financial app on all those mobile wallets.
Splitting the cost for tickets for an upcoming football game or concert is super easy with apps such as Venmo, Square Cash and Zelle.
“You risk looking old-fashioned paying with cash or credit cards,” said April Rudin, founder of The Rudin Group, a financial services marketing firm in New York City.
And we’re going to hear more about sending money via smartphone after Apple launched its iOS11 system last week. One feature that will not be available until later this fall is that you won’t even need to download a new peer-to-peer payment app. It’s embedded in the software update. The feature, called Apple Pay Cash, will compete with Venmo, Zelle and others.
The industry calls such ideas “frictionless payments,” Rudin said.
Some studies indicate we spend more when there’s less hassle. Could we save more that way, too? Already, about 65% of Millennials responding to a survey by LendEDU this year indicated they used a mobile payment app. Many Millennials use Venmo now.
But what other personal finance apps are out there?
1) WANT SOMEONE TO HELP YOU THINK ABOUT FINANCES WHEN YOU’RE BUSY?
Some apps — such as Wela — offer advice when it comes to how to pay off debt or save for retire- ment. Sign up for the free app and you’ve got a robo-adviser named Benjamin.
The Benjamin bot gives customized answers based on your financial picture after aggregating information from more than
13,000 financial institutions. Matt Reiner, CEO for Wela, said consumers in their 20s and
30s are trying to do a lot at their age and want to know how much they can spend guilt-free while saving toward bigger goals.
“They’re looking for a silver bullet to change their situation,” Reiner said.
The ever-popular Mint.com has an app on how to track how you’re spending your money and how to budget, too. Some bank apps also give budgeting advice.
2) WANT TO FIND A FEW BUCKS TO COVER YOUR STUDENT LOANS?
The new Fifth Third Momentum app for the bank’s debit-card cus- tomers can cut about three years of payments off the student loans many Millennials are carrying, according to Timothy Spence, chief strategy officer for Fifth Third Bank.
The game plan: If you set aside extra cash regularly, you’re paying off some of what you borrowed, and the interest doesn’t keep building on that principal amount.
How you do it: If you’re a Fifth Third customer, you download the app, input your student loans and decide if you’d add an extra dollar each time you use your debit card or just round up the purchase to the next dollar.
Essentially, you’re rounding up to pay it down.
Millennials like the idea of making small payments because they’re not committing to give up a lot of extra cash each month, said Spence, who spoke at the Behavioral Finance Symposium at the University of Michigan Ross School of Business on Friday.
An upstart Chicago-based app called ChangED uses a similar “round up the change” strategy for paying down student loan debt and isn’t connected to one specific bank.
An app called Digit also enables users to set aside cash for specific goals. The app says it helps consumers figure out how much is “safe” to save based on their lifestyles.
Digit said it doesn’t require you to figure out an arbitrary amount to transfer every month. After a free trial period, Digit charges a monthly fee of $2.99, and the service can be canceled anytime.
3) WANT TO START INVESTING ON THE GO?
Some Millennials use an app called Acorns — which calls itself a “micro-investing ” app. The idea is to target small amounts of money toward investments. Again, you’re rounding up daily purchases made with a debit card.
Acorns has five diversified portfolios that range from conservative to higher risk. You can pick and change your mind later.
Most people pay $1 a month a fee. College students are free. And people with an account of
$5,000 or more pay 0.25% in fees per year. Some promotions offer ways to avoid the fee.
Every dollar you invest is “automatically diversified across
7,000 stocks and bonds to help improve your return while reducing risk,” according to Acorns.
Acorns allows you to link as many debit cards — and credit cards — as you like.
Would you rather pick your stocks? One 29-year-old I spoke with swears by using Robinhood. The app promises free trades on many U.S. securities. But see the commission and fee schedule for other charges. For example, trading listed foreign securities end up being $50 a trade.
And there’s the app called Stash — which lets you start investing with as little as $5.
4) WANT TO REMAIN WITH A BIG NAME? CHECK FAVORITE BANKS, CREDIT UNIONS.
Bank of America announced in early September that it was updating its mobile app to include features such as a new tool with gizmos to let you add pictures and dollar targets to track progress with saving for that new car or spring break.
Bank of America’s app also cuts out steps for ATM withdrawals, enabling “cardless” transactions at the bank’s ATM network. Bank customers can start the ATM withdrawal process from their mobile banking app.
Some apps, such as Fifth Third Momentum and ChangED, let you “round up the change” on your purchases to pay down student debt.
5) WANT TO AVOID BEING SCAMMED?
You want to only upload and install apps from well-known stores, such as Google Play, Apple App Store, Windows Store and Amazon — even if some apps cost a few dollars, according to cybersecurity experts at PNC Bank.
The reason? Unfamiliar sources may spread malware.
Or you could be unknowingly agreeing to turn over your personal information and digital footprint.