If your budget is tight, it can be hard to find any extra money to stash away each month. But why exactly is it hard? It’s probably not because of a lack of effort or desire. You’d basically have to monitor all your spending and income at all times to figure out what you can save. Honestly, that sounds exhausting, and if your budget’s already tight, it’s not like you have a lot of energy to be your budget watchdog.
People usually solve this money-saving problem on their own, and they choose one of four ways:
- Save a certain amount each month. If, for example, you have an automatic transfer for $50 each month, that’s something. But if your income or expenses change that month, you’re either not saving as much as you could be, or even worse, the transfer overdraws the account and you get hit with an overdraft fee.
- Save a fixed percentage each month. This can be a little trickier to set up, but it’d work the same way as a 401k contribution. The only issue is that the percentage still won’t change based on income and expenses.
- Save money manually. You put aside what money you can at the end of the month. But making savings a choice and making it something you have to do can make it hard to build a solid savings habit.
- Don’t save any money. Not saving money isn’t a great option for long term financial health, but when you’re on a tight budget and strapped for time, putting off savings can be the path of least resistance.
All of these ways to save money have problems. And they rely on the saver making good money decisions to keep saving, which can be pretty tricky when you’re on a tight budget. Instead of doing it on your own, it’s a lot easier if you get a savings app like Digit to help.
Digit tries something a little different. Instead of deciding at the end of the month how much you should save, once you connect your checking account to the Digit app, Digit begins looking at your income and spending patterns and makes small savings transfers that you can afford. Digit’s algorithm can account for uneven income, gig work, insurance payments, bonuses, tax refunds—all the ups and downs life throws at you. Even if Digit can only save just a dollar here or two dollars there, it still adds up. As a result, Digit members save an average of $2500 in their first year of using Digit
Digit uses responsive savings (which is just a fancy way of saying Digit’s daily saving transfers change as your money situation changes). That way you never have to worry about saving too much or too little or forgetting to save at the end of the month. Best of all you don’t have to keep on asking yourself how you can save on a tight budget. Digit figures out how to save the right amount for you on any budget.
Want to see how much money Digit can save you with no effort? Sign up for Digit now and take Digit’s 30-day Free Saving Challenge.