The Acorns App is a souped up virtual piggyback that not only saves your spare change, but it invests it too!
I used to love to collect change as a kid. My grandfather had what seemed to me at the time, an enormous jar of change that he kept on top of his dresser. He was very diligent about adding his spare change to that jar every day as part of his routine when he would come home from work. Then when the jar would become full, I would help him roll the coins into paper coin organizers that we would eventually take to the bank and exchange for bills. Participating in this process first hand really helped me realize how much can be accumulated over time just through saving spare change. It was an important life lesson for me, and that is why I am excited about the Acorns app. It is a new investment app that works off this principal, by taking the spare change from your everyday purchases and putting it into an investment account. The account can help you save long term or it can be for shorter term savings goals like planning a wedding or a trip.
When you make a purchase, the Acorns app rounds up to the nearest dollar and saves that amount as your "spare change." For example let's say you buy a cup of coffee for $3.50. They will round that up to an even $4.00 thus giving you $.50 for your investment account. Using the app, you sync Acorns with your bank account so that they can route the money to your account properly. Since the app requires sensitive financial information they take security very seriously, but you always need to be cautious when deciding to use a financial app on your phone. They do also offer a computer/desktop based version now, for those that are leary of having banking apps on their phone.
Acorns asks you a series of questions to help match you to the right portfolio of diversified investments that could include stocks, bonds, and real estate. Their algorithms then manage the account for you. As such there are some fees involved with using their platform. Those that have a zero balance are not charged though. Accounts under $5000 are charged $1 per month. Accounts with over $5000 are charged .25% per year. However if you are under 24 or a student with a .edu email address, you actually get to use Acorns for free. Which is great, because it encourages people to start investing as early as possible. There are no fees if you decide to pull money out of your Acorns account unlike some other investment strategies.
If nothing else the Acorns app will likely make you more investment and saving focused. It is fun to see the money grow and see just how much your change accumulates and earns dividends. Let us know if you decide to give Acorns a shot.
*Photo Credit: iTunes App Store