What’s the hardest thing to do in life? ‘Earning money’, would be the most popular answer; but in realism it is saving what is earned is toughest. It is sure that most of you reading this haven’t indulged yourselves in saving money ever in life; reasons may differ but the condition is the same as none of us have much of a cushion. The difficulty arising due to not saving money on a routine basis is felt at times of emergencies when you need to break your bank and dig into every penny you unknowingly find. According to a fresh survey, around 72% Americans were stressed thinking about their financial condition last month, the situation around the globe only worsen taking into consideration that most of the countries are way less developed compared to the US.
Going by the facts collected by the Federal Reserve in 2013, 60% of the Americans aged between 18-40 years saved nothing at all. In 2014, adults below the age of 35 years had a saving rate of -2%. Why is this happening, why are people not saving at least a portion of what their hard-earned money? Is saving that tough a task, are bank formalities so complex that people aren’t interested and spend it all? This is a serious issue arising financial problems at both the individual level and for the economy. The latest national budget announced in India had its emphasis on savings; the government has given certain reliefs in order to enable and encourage savings as a routine activity among commoners.
Digit- your money saving application:
Well, here’s something good, In fact excellent for those who are planning to start saving at least henceforth. Technology has pushed in a new application called “Digit”. It is an app that automatically saves money from your checking account without you knowing it or even you think of it. The application was on a test-run for entire 7 months period and was open for public use on the 19th of Feb, 2015.
During its pilot run period, Digit saved a total of $600,000 for its members and by now it’s saving $1 million per month for some of its members.
Ethan Bloch-The Discoverer of Digit:
Only a finance aficionado could have discovered something as interesting as Digit. Ethan Bloch an accountant and finance researcher by profession sold his own startup to a software firm DemandForce. This company was later acquired by Intuit in the year 2012 for around $400 million. Digit as a concept had already caught attention of popular venture capital entities such as Google Ventures and Baseline Ventures and has managed a seed funding of $2.5 million by the end of 2014.
How does Digit work?
Digit basically keeps track of 4 segments from your finance, they are; current level of money in your checking account, upcoming salary amount, bills that are outstanding, how have you been spending lately? Digit has tie-ups with popular banks thus it can pull in data upto 3 years. People can manually set their savings amount and are free to withdraw the same anytime they like.
Occasionally the app also updates users on how much they’ve saved over the course of a week or a month.
Once a user connects with the checking account; the app automatically keeps transferring small sums of money that it knows the user won’t require on an immediate basis. This amount goes to the separate “saving account” where it accumulated.
This is an absolute free service which includes no charge at all; however there is a catch as the users won’t be eligible to any interest on their savings as it is in case of banks saving accounts. The company currently earns through saving the users money with the partnered banks. This is enough to cover all the operation costs and brings in decent earnings for the company as well.
However, Bloch indicated that the company hopes to share a part of the interest with its clients as the numbers of savers grow and as soon as the company is able to cover all its operation expenses.