“Micro saving” may be the answer if you’re wondering how to save money without deprivation.
Little by little, the bird makes its nest, it’s been said. And the same is true of your nest egg. Because even small savings today can make a big difference later, helping you fund major goals like buying a home, paying for college, or retirement.
You can do it, even if you’re broke
But wait, you say: I’m no good at setting aside money, and I have little left over after I pay my bills. The good news? Even if you’re not an experienced saver, it’s never too late to start. And opportunities for conserving and growing cash present themselves regularly in the form of micro-money saving.
Micro saving simply means saving and/or investing small sums of money over a long period of time, which can add up to a bigger stash down the road. It requires getting into the habit of “paying it forward” in minor quantities — to your future self.
Don’t “stupid size” it
Take, for example, a trip to your favorite burger spot. Instead of “supersizing” that meal, why not order only what you need and save the extra cash? Not to mention the calories?
And what’s wrong with buying a filtered water pitcher that can yield a lot more value than the gourmet water bottles you buy at the supermarket? If you normally buy a case of water every two weeks at $5, you could save over $100 a year.
The idea is that tiny sums of cash can be banked for a rainy day fund or invested. It involves very little deprivation, just cultivating a new habit. A good one.
How to save money the lazy way
You may need a good memory and discipline to manually add these amounts to a piggy bank. And visit your bank to deposit that change or hand off larger sums to your investment broker.
But what if you could automate your micro-money saving tasks so that your spare change and amounts otherwise spent on immediate indulgences were automatically transferred into a savings account or investment opportunity? That would make the process simple and invisible.
And help you develop positive financial habits and behaviors.
Saving apps to try
Fortunately, there are online solutions to help, including Qapital, Acorns, Chime, Digit and Stash.
Depending on the app, it can help you automatically either invest as little as a few dollars at set times into stocks, bonds, or exchange-traded funds (ETFs), or manage and transfer money from your checking account to a savings account — at amounts and intervals that you program ahead of time or instantly if you agree with what the app suggests.
Most apps also provide money management tools and snapshots of different accounts you link to it.
For example, Digit uses a special algorithm to analyze your checking account balance, upcoming income and bills, and recent spending; Digit then searches for a small amount of money it determines that you won’t need for forthcoming spending purposes and automatically transfers these funds to your Digit account, which holds its funds in FDIC-insured banks.
An app like Stash, meanwhile, uses a special algorithm to suggest worthy ETF fractional shares you can invest in, per your risk profile, for as little as $5 (the money comes out of your linked checking account).
And Chime automatically rounds up every transaction you make using your Chime debit card to the nearest dollar before depositing that rounded-up amount into your savings account. Or it can transfer a preset amount from your paycheck into your savings account automatically.
How much do micro saving apps cost?
Cost is a consideration. It makes little sense to try a savings solution involving putting aside small amounts if it costs large amounts to maintain the system.
Most of these apps and services aren’t free. Some charge a small monthly fee, and any savings accounts built in usually yield lower interest rates than you may find elsewhere.
Nevertheless, if you’re eager to develop financial habits and you crave the convenience of out-of-sight, out-of-mind saving and investing practices, these digital tools can be the perfect solution. And they beat digging for spare change in the corners of your couch, too.