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My checking account is haunted. Fortunately, the culprit is of no ill intent.
You see, this spirit thing that lurks in the background of my account is a friendly sort. Casper-like, if you will. Ever since he’s come a long, I’ve noticed a subtle but distinct drop in my checking account balance, countered by an increase in my overall savings.
Let me tell you about the friendly ghost that changed my life – Digit.
But first, let’s talk about your unhaunted account that haunts you daily – your savings.
How much money is in your savings account? $100, maybe? $1,000+ if you’re doing pretty well. 6-12x your monthly living expenses if you’ve read The Total Money Makeover and gotten your money under control, in which case you should throw yourself a congratulatory party because 69% of Americans have less than $1,000 in savings.
That’s because saving money is just plain hard. For most people, having money = spending money. Clothes, fancy dinners, convenient lunches, nifty gadgets – there are a ton of cool things to spend money on these days, and that’s what most people do. They spend.
But what happens when your car breaks down; the house needs repairs; someone steals your phone; or when you lose your job?
Do you take on more credit, spend months or years of your life stressing about the interest payments piling up on your cards? If you’re prepared, then you won’t have to.
Saving money is hard, but Digit makes it easier. Here’s why you need to start your account with Digit now.
What is Digit?
Digit is an online service that analyzes your spending patterns and transfers money from your checking account to your Digit savings account based on its calculations of what you can afford. They have a “no-overdraft guarantee” stating that “in the unlikely event your account is overdrawn by Digit auto-saving, [they’ll] reimburse the fees for up to 2 instances of overdraft.”
You can use Digit for FREE for 100 days. After the 100-day trial period, there’s a $2.99/month subscription fee.
- Automation – Automating your finances ensures success in a number of ways. If you ever need your money, it’s only a text message away.
- $5 Referral Bonus – You can get an extra $5 for each friend you refer to Digit. It’d be pretty cool if you signed up through my referral link.
- Easy to Use – Digit is super user friendly. All interaction is done via text messages, so if you want to check your balance, all you have to do is text Digit and say “Balance”.
- 100 Days Free – Digit has a free trial of 100 days so you can really check out the app before you commit to the paid subscription.
- $2.99 Subscription Fee – This is kind of a pro and a con. On the one hand, it costs $2.99 per month. On the other hand, it only costs $2.99 per month.
- The Website Doesn’t Do Much – You can check your balance on the website, but as far as making transactions, everything is done via text.
- Small Interest Rate – Digit offers a 1% annualized savings bonus (.25% every 3 months). That’s not very much. You’re better off letting Digit determine what you can save, then transferring that amount to an investment or savings account with a higher interest rate. That’s what I do.
At First, I Was Afraid; I Was Petrified…of the Digit Ghost
I have this not-so-irrational fear when it comes to giving out my bank account information to companies/products I’m unsure of, and I was a wee bit hesitant when it came to Digit.
To start an account, you need to provide a checking account number and a phone number to receive text updates on your savings progress. My first thought was “don’t give it to them – protect your identity!” But it turns out Digit is actually pretty safe.
According to their website, Digit uses 128-bit security. I didn’t know what that meant at first, so I looked it up. Apparently, it’s one of the most secure encryption methods used today. Technopedia says “it is considered secure because it would take massive computation and virtually thousands of years to be cracked.” A thousand years from now we’ll have destroyed the planet and be using seeds as currency because food will be so scarce. USD will be a thing of the past.
Additionally, all Digit funds are FDIC insured up to $250,000. I definitely don’t have an extra $250,000 sitting around in any savings account, so that’s good enough for me.
The Start of Something New
Digit, it feels so right to be saving with you!
I put aside some savings every month, usually a base amount, then I’ll put aside more once all my expenses are paid and I see exactly what’s left over. This system works out well, but it’s not very hands-off. I’m always checking my balance and doing the math to see what lump sum amount I can transfer without risking an overdraft. But no matter what, I always have at least a small balance in my checking account as a buffer.
The first withdrawal Digit made from my checking account was $6.50 and I was like:
I thought for sure that $6.50 was going to cause me to overdraft on my checking account. I just knew it.
But it didn’t.
Each day, Digit continued to make mindful and calculated withdrawals from my account. Some as high as $20.50, others as low as $0.06 (Digit knows that every cent counts).
With each withdrawal, I felt less and less anxiety about my savings being in Digit’s hands. I actually started to look forward to those morning text messages and fun GIFs (that’s right, Digit sends you cute GIFs) updating me on my savings progress.
It was like our little thing.
Digit would text me letting me know I saved an extra $10.29 that day, I would send Digit a thumbs up and Digit would send me three thumbs up. We’re a match made in Heaven.
This month, I saved an extra $143.47 using Digit. I can honestly say that’s $143.47 I wouldn’t have saved otherwise because even though I save diligently, I know I could always be saving a little more.
I really like Digit. For me, it’s great. I still save a set amount each month, but I let Digit determine my savings little by little after that. Once the month ends, I transfer my savings to another account with a higher interest rate and start all over.
Digit isn’t going to make you rich. The interest rate is not that great. However, Digit is really good for short-term savings and for those who aren’t very disciplined when it comes to saving money.
But don’t take my word for it. Sign up for an account and see what you think!
Have you tried Digit? What do you think of it?
I’m a financial coach and author + owner of Goodbye to Broke. I love all things personal finance, money management, and healthy living. And I talk to my dog way too much, if we’re being honest.