How do I, a twenty two year old of the tech-savvy and selfish, avocado eating, instagram-obsessed millennial generation, save money? Through an app, of course. So here’s the question: does acorns really work?
My parents suggested my stepbrother and I invest when we were teenagers. There were a lot of words thrown around, things like “dividends” and “stock market”. I sat there trying to understand and pulling up blank. I never ended up investing.
Late last year, Ella’s mum showed me an app that changed my mind. How’d she do it? She didn’t say anything about investing, but instead said “Acorns will help you save for your trip to Europe.” That got my attention.
And she was right. In the past 4 months I’ve saved just over $800 through Acorns. Learn how I did it, and sign up today.
How does Acorns work?
By investing small change.
When I spend $20.18 on petrol, Acorns rounds that up to $21, takes that .82 cents and adds it to my account. I don’t even notice that extra .82 cents, because in my head I round everything up to the next dollar anyway.
With Acorns you can connect as many credit or debit cards as you want, and you can make one time or recurring deposits to keep the balance rising.
Some more of their features include:
- Found Money: where you can shop online through the app or website and the partner store will put a percentage of the money spent back into your account
- My Finance: which tracks your spending and breaks it down so you can better understand your habits and work on saving smarter. The feature has notifications to keep you on track, and is always learning, so it can predict your spending in the future and tell you where to cut back
- Little Acorns: helps you save for your kids or grandkids. It uses your account to save and invest for any dependent children under the age of 18, and once they turn 18, the money is all theirs for their very own acorns account.
- Carbon Offset: Acorns gives you an estimated carbon footprint size based on your monthly spending behaviour in My Finances. You can subscribe to offset your own carbon footprint, just like Acorns does, by supporting projects that protect the environment, like VCS Australian Forestry Protection Group of Projects :http://www.vcsprojectdatabase.org/#/project_details/641 VCS China Biomass Project :http://www.vcsprojectdatabase.org/#/project_details/1126. There is a subscription fee, based off your average monthly carbon footprint and calculated over the past 3 months. Once you’ve subscribed on a monthly basis, you can get a retirement certificate showing the total offset amount.
Where does Acorns invest your money?
When you set up your Acorns account, you’ll choose a portfolios, running from conservative (least risky) and aggressive (most risky). Each portfolio is made up of seven ETFs. According to Acorns “ETFs trade like stocks and represent broad holdings of stocks, bonds or cash.” Here’s an article with more information.
How much does Acorns cost?
There is no establishment, contribution, withdrawal or termination fee. As long as your account is under $5000, there is no account or maintenance fees, and for accounts over $5000 the account fee is $0.275 p.a and the maintenance fee is $1.25 per month. The underlying issuer fee ranges from 0.224% p.a to 0.423% p.a, depending on the portfolio you choose.
The answer: does acorns really work? Yes, yes it does.
For people of our generation, an easy investing tool is a lifesaver, cutting out the stress of investing for the future. By making the process so simple and the increments so small, anyone can do it.
To end, here’s a note straight from Acorns: “Everything to know about Acorns’ philosophy can be seen in the acorn itself. No one tells it how to become an oak – it just knows! Likewise, we believe that by starting small, continually adding and being patient, growth will happen automatically. All it takes is time.”
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