Whenever I’m inspired to add some income into my savings accounts a small part of me will always try to resist it. Something will ALWAYS come up, an unexpected repair bill, a new “Must-have” gadget or some kind of additional expense that I end up adding to the budget. Speaking of budgets, if you haven’t downloaded our Camtrading Simple Budget Template, I highly suggest you do so now, it will save you a lot of time and it will help point you to a path of clearly seeing where you money is going. Plus, it’s customizable to fit your needs.
If you’ve never heard of Acorns, here’s a brief description of it. Acorns was founded in 2012 and after receiving seed funding from celebrities like Ashton Kutcher, Acorns rose to prominence and popularity within three years of launching the app. Their Robo-Advisor technology is an industry disruptor and as of this writing they hold $197 Million ($197,000,000) in assets under management. They are an SEC and FINRA member and operate under the name Acorns Securities, LLC.
I have been using the Acorns App for a little over two years now and have been consistently saving my “spare” change over the course of that time. I put spare in quotes because Acorns can do more than just collect the spare change per transaction in your designated bank account. Here’s a quick example. I was on eBay buying a pair of boots, and when the total transaction was completed, I immediately saw the option in the Acorns App to save the 63 cent spare change OR deposit a higher value (of my choice). I opted to deposit $10 whole dollars instead, it was the weekend and it landed on a pay period, so I thought, why not reward myself by spending it on my future. So you see, the feature to manually various values in the Acorns App makes saving almost automatically. And that’s how you really want your savings pattern to behave – automatic. If you’re not thinking of saving, you won’t be thinking of spending from it. Saving money is one of the main pillars to financial independence.
This brings me to the second “hidden” feature in Acorns. Now, I know this isn’t really a feature they purposely installed within the app itself but it is more of an inherited benefit with the way clearing works. You see, when you withdraw money from Acorns it may take up to 5 full business days from the time you hit submit, to the time the money clears your bank for you to be able to spend the deposit. Why is this a “feature” and not an inconvenience? Simple, when you’re impulsive, like me, you tend to think irrationally about small and BIG purchases. So by delaying access to your money, the impulse tend to go away after a day or two of waiting. This helps prevent you from spending your money unnecessarily, and that is a weapon you can use to fight consumerism at its core. Scary fact, a recent report showed that we are exposed to up to 2,000 advertising messages per day, and that number is exponentially higher the closer you live in a metropolitan area. It’s no wonder that our natural tendencies are to spend. We are all being subconsciously reprogrammed to do so! Scary, right?
To me, Acorns serve as one of those hidden tools that simply operate in the background. I can create a weekly or monthly automatic deposit in addition to the round-ups. In fact, I don’t even notice the money anymore and I just let the small deposits accumulate at Acorns.
Now, there are a few drawbacks to having an Acorns account. The first is that there is a monthly fee to using it. There are exceptions to this, if you’re a student, and have under $5,000 in deposit value at Acorns, the account is free of charge. If you’re not a student and have under $5,000 in value the monthly fee is $1.00 – that’s right, just ONE DOLLAR per month. After that it’s 0.012% in service fees. Here’s why those fees almost mean nothing. The funds you’ll be investing in PAYS you monthly and quarterly dividends, in most cases the funds you invest in pay more than your monthly service fee. So having an Acorns account is virtually free!
The other drawback is that your funds are susceptible to some market volatility. This can be both positive and negative. Of course it isn’t a drawback if your money is riding a bull market, but it is worth noting that when the market is in the red, your money in Acorns could be negatively affected.
One last point before I close, you can choose between 5 different investment profiles to put your money in. These are called, Conservative, Moderately Conservative, Moderate, Moderately Aggressive, and Aggressive. They recommend you look at your risk tolerance and time horizon to choose wisely. Of course, you can change this up at anytime, free of charge. Each of these profiles compose of funds from Vanguard, and they are one of the largest, most recognized brand of Mutual Funds in the United States. So your money is safe, saving money becomes automatic, and the fees are low. You can’t ask for a better tool than that!
Check them out here.
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