Saving money is really freaking hard.
Even though I’m naturally frugal, I’ve never been great at putting aside money for anything other than travel.
As of a year ago, I didn’t have an emergency fund, and was barely saving for retirement.
I knew that wasn’t smart, so I finally set up automatic contributions to my Roth IRA.
But I still didn’t have an emergency fund.
To remedy that, I needed savings to A) be automatic, otherwise I’d never do it, and B) live in a separate account, otherwise I’d probably blow it (in the best way possible) on traveling.
I procrastinated and procrastinated…
Until I heard about a new tool that reviews how much money you have in your checking account, and automatically sets aside an amount you can afford every few days.
I signed up 10 months ago, and haven’t looked back. Here’s how it works.
The Mindless Way I Saved Nearly $2K
So how did I finally start my emergency fund?
This magical tool analyzes your income and spending to automatically figure out “when and how much is safe to save based on your lifestyle.”
Unlike automatic transfers from your bank account, Digit doesn’t take out the same amount every week or month.
Instead, it monitors your account and spending patterns, and “moves a few dollars from your checking account to your Digit account, if you can afford it” every few days.
The amounts generally vary between $5 and $50, according to Digit, but I’ve seen them go as high as $61 and as low as 70 cents.
Once the money is transferred to your FDIC-insured Digit savings account, it stays there until you need it.
When that day comes, send Digit a text or submit a request via the website or app, and it will send the money back to your checking account the next business day. You can transfer money as frequently as you like, with no minimums and no fees.
Access Digit on its web platform, or via its iPhone or Android apps. You can use it in conjunction with more than 2,500 banks and credit unions nationwide, but isn’t yet available internationally.
My Digit Review: What I’ve Saved
I joined Digit in May 2015. So far, I’ve saved $1,774.88.
If I stopped being lazy and referred five friends to the tool, I could earn an additional $25, which would push me over the two grand mark.
It might be obvious, but worth noting: The more you have in your checking account, the more you’ll save.
After I increased my income by accepting a full-time writing job here at The Penny Hoarder, my checking account balance was consistently higher. Digit calculated it could remove more money — and my savings quickly ballooned.
That’s the beauty of Digit’s system; it constantly adjusts to your cashflow. If it’s low, your savings will increase more slowly — but every little bit adds up!
Is Digit Right for You?
What works for me won’t work for everyone.
So, is Digit right for you?
If you want precise control of your money at all times, no.
Because I use Digit, my checking account’s balance is constantly changing, which is OK with me. But if you want more control, this might not be the tool for you.
That being said, Digit makes it easy to stay on top of things: You can get your savings or checking balances with a simple text, and receive alerts whenever money is transferred.
I opted out of the frequent notifications because I thought they were annoying, but they might provide peace of mind for some.
If your checking account balance is frequently near zero, no.
Digit will cover the fees if it overdrafts your account (up to two times per customer), but it’s probably not a good fit if your checking account is always on the verge of empty.
Besides the fact overdrafting is a pain in the neck, Digit won’t be able to save you much if your balance is really low.
If you’re nervous about giving a website access to your bank account, no.
For Digit to work, you need to connect your checking account.
I trust Digit because it uses “state-of-the-art security measures,” and my info is “anonymized, encrypted and securely stored.” Also, funds are FDIC-insured up to $250,000.
If you want to earn interest, no.
This is probably Digit’s biggest drawback.
Since it doesn’t charge any fees, Digit earns money by investing your money and keeping the interest for itself.
For me, the interest I’d earn in a savings account is already so minimal, I’m happy to let Digit keep the change. It’s worth it to not have to consciously save money (because it’s pretty much impossible for me).
Plus, Digit gives you quarterly Savings Bonuses, which are “based on your average Digit balance over the last three months.” You’ll get 5 cents for every $100 you’ve saved.
If you want to save money without thinking about it, YES.
I couldn’t be happier with my Digit experience so far.
I mean, how could I not be? I have nearly two grand in my account. My emergency fund still isn’t where I want it to be, but it’s eons better than nothing.
I’m going to let it keep growing, and I’ll eventually transfer it into an interest-bearing account.
For the moment, though, I like having it separate and out of sight — it means I won’t spend it on a plane ticket.
Want to give it a try? Click here to learn more about Digit.
Your Turn: Have you tried any automatic savings tools?
Disclosure: You wouldn’t believe how much coffee The Penny Hoarder team goes through. This post contains affiliate links so we can keep the grinds stocked!
Susan Shain, senior writer for The Penny Hoarder, is always seeking adventure on a budget. Visit her blog at susanshain.com, or say hi on Twitter @susan_shain.