How to Save Money on Autopilot With the Acorns App
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If you've ever struggled to save money or find yourself wishing there was an easier way to do it, then today's post is for you!
I want to tell you all about a little saving and investment app I discovered about a year ago called Acorns. This is one of my favorite ways to save extra money without feeling obligated - it's a completely set it and forget it system
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So what is Acorns?
Acorns is one of the best ways to automatically take your spare change and invest it in the stock market.
It runs as an app for your phone that links to your debit card and bank account and rounds up all of your purchases to the next dollar. When it does that, any spare change from the transaction is swept into your Acorns account and invested in ETFs.
You get to choose how aggressive or conservative you want your account to be managed, and the app does the rest!
The best part is that it is completely automatic. Once you set it up, you can forget about it and it will continue to do its thing in the background month after month.
Quick Facts
- Management fee: $1-2 per month
- Account minimum: $0
- Difficulty level: Beginner
Things I love about the Acorns investing app:
- Basic acorns accounts are free for college students!
- It's a great way to save money without having to think about it
- You can withdraw the money at any time and use it for anything you want
- You can add a base amount of money you would like it to pull each month in addition to the roundups
- No fees to withdraw money to your bank account
- The Found Money feature can add cash to your account every month
The Downsides of using Acorns:
- Some people feel that the $1-$2 per month fee is too high (I’m fine with it.)
- There are steep fees for transferring your money directly to a linked brokerage account. I recommend withdrawing to your bank account instead (which is free!)
- The app isn't great as a long-term investment vehicle.
Acorns is best for:
- People who struggle to save
- Those who don't yet have the $500-$3000 minimum to open a brokerage account
- Those just getting started with saving and investing
- Those who want no hassle automation of their savings
- Those who want to save for other things like vacations, cars, or an emergency fund
Overall grade: 7/10
How I use Acorns to Build My Net Worth
As I've said before, Acorns really isn't a great long-term investment vehicle. The returns are much lower than investing in an index fund account with Vanguard or Fidelity and your money is only spread across seven ETF's.
The Vanguard Total Stock Market Index Fund, for example, invests your money in every single publicly traded US company. The stability and growth with a Vanguard account is much better overall.
Here's whereAcornsexcels. Instead of being a long-term investment account, Acorns is great for grabbing up those extra quarters and dimes from every transaction you make and bringing them into one place for you.
With my account, I let Acorns run for several months until I accumulate a few hundred dollars. As you can see, it took me about 10 months to reach $619.12 in my account.
After reaching a decent sum I withdraw the money into my bank account and then quickly send it to my Vanguard account. This is a great way to invest an extra $1,000-$2,000 per year without feeling the pinch at all.
And, you don't have to invest the money like I do. Many people use Acorns as a vacation fund, a new car fun, or just as a fun money fund for a special treat.
When used as a simple savings app, it is a really fun and painless way to watch your savings grow.
When I first set up my account, I wasn't sure what to expect so I set it to add an extra $5 per month to the account in addition to my roundups. Now that I've gotten a good feel for how it works, I will be upping that number significantly.
I love thatAcornsis crazy simple-to-use and that it supports my secret sauce to building wealth: Automate your savings and investments and you can’t help but succeed.
Ready to start stocking your pantry full of your own preserves? Grab these editable canning jar lids as a perk of becoming a subscriber, and you'll have shelves of beautifully labelled jars in no time.
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FAQs
Where Acorns falls short. No tax strategy: Unlike many of its competitors, Acorns does not offer a tax strategy. High fees on small balances: Because of its pricing structure, Acorns can have high fees on small account balances.
How to save money with Acorn? ›
Acorns is well known for its system that lets you take advantage of “Round-Ups” — investing your spare change whenever you use a linked card. For example, say you spend $9.45 at your favorite lunch spot. Using Acorns, you can round up to $10 and deposit that extra 55 cents in your Acorns investing account.
Can you lose money with Acorns app? ›
Start saving and investing today with Acorns
Investing involves risk, including loss of principal.
How to get free money from Acorns? ›
For every friend you invite to Acorns, you can earn a $5 referral bonus that gets invested in your Acorns Invest portfolio. There's no limit to how many friends you can invite, and best of all, your friends also get a $5 bonus investment, too! (Terms and conditions apply.)
Does Acorns grow your money? ›
Money doesn't grow on trees, but with compound interest or compound returns, money can grow itself. The longer you invest with Acorns, the more you're giving your money a chance to work for you.
How much do Acorns cost per month? ›
Account Overview
| Account Minimum | $5 to start investing |
|---|
| Fees | Acorns Personal: $3 per month Acorns Personal Plus: $5 per month Acorns Premium: $9 per month |
| Goal Setting | Yes |
| Interest Paid on Cash Balances | Yes, in Plus and Premium accounts |
| Customizable Portfolio | Yes |
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Acorns Earn (Found Money): You can earn extra money when you shop with Acorns' 15,000+ retailer partners. Just link your credit or debit card to your Acorns account and shop. The retailer will deposit a percentage of your purchase into your investment account. Acorns Early: Start investing for your kids with $5.
What is the 50 30 20 rule on Acorns? ›
To follow the 50/30/20 rule, you will take your net income (your take-home pay after taxes and other payroll deductions) and divide it into three categories: 50 percent to your needs (things like rent, utilities, debt payments, food); 30 percent for your wants (things like entertainment, eating out, and clothing), and ...
Can you take money out of Acorns anytime? ›
You can withdraw funds from your Acorns Invest account anytime — withdrawing funds means we'll sell assets and transfer you the balance.
What happens to my money if Acorns shuts down? ›
For example, with Acorns Checking, your accounts have FDIC insurance through our banking partners, Lincoln Savings Bank and nbkc bank. The FDIC insures more than 4,700 banks across the U.S. What that means is if an insured bank fails, the FDIC will reimburse you for your losses.
Stash caters to new investors who want to build long-term wealth and may be best for investors who want to choose their own individual stock and ETF investments. Acorns completely automates investing, which appeals to investors who want a truly simplified set-it-and-forget-it investing approach.
Is there a penalty for withdrawing money from Acorns? ›
In conclusion, withdrawing money from Acorns Invest is a hassle-free process without any penalties from the platform itself. However, it's essential to consider potential tax implications and the time it takes for withdrawals to reach your bank account.
How do I get $600 from Acorns? ›
You are eligible to receive this reward each time a new Acorns customer, meaning a natural person who has never begun signing up for Acorns before, (1) uses your personal invitation code or referral link that you shared with them during the promotional period (June 30, 2024 - July 6, 2024) when they sign up for a new ...
Can I use Acorns just to save money? ›
Acorns Banking is a bank account that helps you save and invest. With Acorns Smart Deposit, you can automatically invest a piece of your paycheck for you into your Acorns Invest, Later, or Early account. Pick how much to invest in each account, starting at 1% of your direct deposit, and change it any time.
Is the Acorns app safe to use? ›
No, Acorns is not a scam. We've been helping everyday Americans save and invest since 2014. We've served over 13,000,000 customers, who have invested more than $20,000,000,000 with us. Your trust means the world to us — it's why we're committed to keeping your investments, savings, and personal information secure.
What are the pros and cons of using Acorns? ›
Acorns Advantages and Disadvantages
| Acorns Advantages | Acorns Disadvantages |
|---|
| No account minimum | Fee to access checking account |
| Recurring contributions | No access to real-life financial advisors |
| Easy-to-use interface | No 529 accounts |
| Core account—no ESG funds—has very low fees | No tax-loss harvesting |
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The eCBSV service helps stop fraud by letting companies like Acorns check if someone's Social Security number, name, and date of birth match the records at the Social Security Administration (SSA). The information is checked against what's on record with the SSA.
What is the deal with Acorns? ›
Acorns is a platform that allows individuals to participate through micro-investing using spare change. The company offers retirement savings accounts, a debit card, and banking services.
