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Digitalize Your Savings

Anxiety courses through your veins as your bank balance approaches zero. The relentless pace of withdrawals quickly evaporating your hard won funds. At least this time you’ll have something to show for it.

Digit is an automated savings tool that automatically withdraws money from your bank account based on your income and spending patterns. It does not care if you were paid almost two weeks ago and are running out of money. Fortunately you can pause it, which I have done from time to time, to get you past pay day.

For people looking to save more money it can be a useful tool for:

  • Building an Emergency Fund
  • Creating a Digital Christmas Club
  • Achieving Longer Term Savings Objectives

I primarily use it as an Emergency Fund. When a recent car repair came up I used some of the funds from my Digit account to cover the repair. I’ve found this easy to do because Digit is:

  • Easy to use
  • Intuitive
  • Message based

To get my money from Digit back to my bank account for the repair all I needed to do was text withdraw to the Digit Bot. It asked how much? I responded $600 to cover the repair. The money was back in my checking account in two days.

While the process of getting your money back is straight forward. I’ve found it adds enough friction. That I don’t dip into the funds in my account without a purpose.

So the funds are accessible for emergencies while also contributing to achievement of my long term goals. Because at the end of the year any money left over beyond what I’ve needed to cover emergencies I use to top up my investment accounts.

In terms of how Digit decides how much to save, it appears to be save first and ask questions later. That is why I arrived at the situation of wondering how Digit was still saving when I had $18.36 in my account. When this happened I looked into things further and discovered withdrawals could be easily paused by sending a message to Digit.

I immediately took advantage of this feature.

You need to be especially cautious if you don’t have overdraft protection on your account. From what I can tell I think Digit would still send a withdrawal request even if you had a negative balance. So if you don’t pause it when this happens you could be subjected to additional overdraft fees.

Along with the ability to pause you can also choose to ratchet things up with Digit by instructing it to save even more aggressively. Digit also contacts you if you appear to have extra funds outside of your normal income patterns. To see if you would like to save extra, so if part of your compensation is a year-end bonus or you’re owed a tax refund. You may hear from Digit to see if you want to up your savings.

While it is easy to manage your savings program via messaging, the web site provides reporting you can use similar to the kinds of reporting available for bank accounts. The site allows you to review your recent transactions while providing access to month end statements if you prefer more formalized reporting.

Using Digit has been a revelation compared to my typical experiences with financial services providers. Checking my balance to find an unexpectedly large sum feels like I’ve stumbled upon an unexpected treasure. While the streamlined interaction via messaging with instant responses. Is a much more satisfying experience than being captured in the vortex of an automated telephone system. Or sending a fourth email to the generic customer service box while praying to the gods someone on the other end deems my query to be worth their time.

Steve Miller
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Steve Miller

Is a CFA® Charterholder and founder of DebtMD.com. A site devoted to helping people discern insights into their finances. The CFA designation is globally recognized and attests to a charterholder’s success in a rigorous and comprehensive study program in the field of investment management and research analysis.

Steve recently authored Escaping Student Loan Debt to assist student loan holders with developing and implementing strategies to minimize their repayments.

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Steve Miller
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