Written by: May 8, 2022
With Acorns, automatically build your savings by rounding up every transaction to the nearest dollar on any linked credit card. It’s an app designed to work with human psychology, helping you save and invest behind the scenes.
Principle-First
Consider the following statistic: In countries where organ donation is the default selection, more than 90% of people donate their organs. (Source)
In countries where people must designate their status as organ donors by choice, fewer than 15% donate.
A default “opt-out” is powerful because people typically follow the path of least resistance and stick to the status quo.
We all know putting money into savings is good for us. But many people have savings configured as “opt-in” every month. As a result, most people fail to save.
Enter Acorns, an app that makes savings your default.
INTRODUCING ACORNS
Disclaimer: I am not a financial advisor, and I have no affiliation with Acorns. Here I’m sharing a service that helps me put money into savings. Please see the disclaimers and disclosures on Acorns' website before deciding whether to use their services.
Acorns is a financial services app (iOS, Android) that helps over 9 million people save. It’s most known for its “round-ups” feature, where you can tell Acorns to round up any transaction you make (with any linked card) to the nearest dollar and invest the change.
Aside from “round-ups,” Acorns offers other services like investing your contributions into smart diversified portfolios (including exposure to Bitcoin ETFs if you choose). In this review, I’m less focused on the investing piece and more interested in the mechanism of automated savings.
Price Tiers
- Individual: $3 Monthly
- Family: $5 Monthly
If you don’t live in the U.S., you can likely find an alternative “round-up” service. For example, Jar appears to be the leading equivalent in India.
SUPERHUMAN SCORING
In every edition of All Systems Go, I assess the featured product across four superhuman dimensions: impact, setup, maintenance, and aesthetics.
Unlike your typical product review, I focus on factors that influence personal growth. Get to know the evaluation system.
Impact (8.5/10)
Unexpected expenses are inevitable, including house and car repairs, traffic tickets, medical bills, wedding gifts, etc.
Without a “rainy day” fund, these events put your stomach in a knot.
Little “round-ups” can add up to significant numbers. In a year of using Acorns “round-ups,” I put about $800 into savings. Of course, everyone will be different based on their spending volume, but I shared that to give you a sense.
It’s savings that can eliminate anxiety on a rainy day.
Setup (9.0/10)
High-level steps:
- Build a login profile
- Link your existing debit and credit cards
- Turn on “round-ups” (add a multiplier if you want to contribute more money per transaction)
- Designate one-time monthly savings (in addition to round-ups, if you’d like to put even more into savings)
- Pick your smart investment portfolio (based on your goals and risk profile)
That’s the gist.
Maintenance (8.0/10)
The beauty of Acorns is that it’s hands-off savings and investing. That’s why it’s so effective. You set it and forget it.
Why an 8.10/10 then? Because I’ve noticed the card links sometimes break. It can be annoying when you make several purchases on an un-linked card and miss out on round-ups.
Acorn’s new plans come with a heavy-metal debit card (I don’t have this), which might ensure card-link connectivity.
Aesthetics (9.0/10)
Acorns nets a 4.7 rating (with 813.9k reviews) on Apple’s App Store. Enough said.
BRINGING IT HOME
I don’t care whether you use Acorns or not (no affiliation).
What I do care about is you considering how you can design empowering defaults in your life:
- Recurring dentist appointments every six months
- Calendaring a weekly time to call your parents (Happy Mother's Day, btw!)
- Automating your savings
You can always opt out if you need to, but the chances are you’ll stick with the status quo: your desired behavior.
All systems go,
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Resources
- Newsletter Archive: Read past issues of All Systems Go
- Energy Dashboard: Get an under-the-hood look at my self-tracking metrics for energy management (updated weekly)
- [Quick Win] Phone Charger Challenge: Save 60 hours every year with this simple morning hack
