When it comes to money and saving there are plenty of people willing to offer sage words of advice to unlock the secrets of success. One tactic that I have heard more than any other, that is also one of the few that I think is guaranteed to work, is to get into the habit of little and often. Although, when it comes to saving and investing, as much as possible and as often as possible would be a good plan for most people.
This often leads to several questions though such as “how much is enough” and “how often is often” or even “where should I put the money”? For many people these can present ready made excuses not to do anything and so we’re back to square one.
This is where a relatively new mobile phone app called moneybox comes in. It’s designed to get people into the habit of investing into stocks and shares a little at a time and very often by linking savings to spending. It’s based on the simple idea of rounding up the spare change each time you spend to the nearest pound and investing it in an ISA. If I spend £1.99 on something then 1p is added to my roundups. If I spend £21.10 then 90p is added to my roundups.
To get started you download the app to your phone (it’s available on iPhone and Android) and connect the debit and credit cards you use for everyday spending. This is done using encrypted security so your personal information is secure. Then, whenever you spend on the card, the app adds the roundup to your weekly savings and adds them to your ISA every Wednesday. You can also choose to add a set amount to your savings each week to give them a boost.
Your savings are invested into one of three risk rated, simple portfolios split between cash, global shares and property shares. The funds are managed by Henderson, Vanguard and BlackRock – three well known investment companies. You can track performance on the app or the website. Moneybox charges £1.38 per month which is not a lot in cash terms but can be quite high in percentage terms when starting out. The portfolios cost about 0.20% per year. I think the charges are worth it as it will help to get saving and investing in a user friendly way.
I have been using it for about 3 months now and chose to add £10 each week to my automatic roundups. I like to check in every now and then to see how it’s going but really like the way it runs in the background without me doing anything. I can honestly say that I haven’t missed the money taken as roundups and I now have almost £250 invested that I know wouldn’t be there without using the app. At this rate I’ll have invested about £1,000 after a year without thinking about it. That’s the real beauty of what the moneybox team has built here; automatic saving and investing, little and often.
If you’re struggling to get into the savings habit, I recommend that you take a look at this to get started.
Finance is one area where technology is racing ahead and so moneybox isn’t the only option out there. True Potential is a company we have liked for a while and they have some of the best tech in the business. Once you’re set up as a client, you can use the impulseSave feature to top up your investments whenever you like for as little as £1 each time. This is different to moneybox as you have to take action yourself but once you’re in the habit, this is a really easy way to boost your savings. You can find out more on their website.
I’ve been using two other apps on my phone recently which are not directly related to investing but have helped me to get to grips with my spending and cut out the stuff I could do without out. I have added the money I would’ve spent to top up my roundups in moneybox so it’s a win win.
The first is an iPhone app called Sumptus. It’s an expense and spending tracker that allows you to build in categories, budgets and spending limits. It’s easy to look at your bank statement to see most of the money you spend but there’s that other stuff you buy that you can’t remember anything about; a coffee, some chocolate when paying for petrol etc. The little things that can add up to a lot. I got into the good habit of recording everything I spent into the app. It’s quick and easy to use and gave me a much better idea of what I’ve been spending.
I’ve now graduated to an app that’s linked to a spending card – Monzo. It’s a new type of bank and I really like what they’re doing. You can currently only get a pre-paid card but a debit card is on the way. I now try to use my Monzo card for everything I buy as it automatically logs the spending on my phone and can tell you the shop, how much, the type of spending and even what time and the location.
I’ve set up budgets each month for groceries, eating out, entertainment, shopping etc and it gives me a gentle nudge when I’m spending too fast. I can also send money instantly to friends who have Monzo on their phones. I really like this app and use it every day. You can download it on iPhone and Android.
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