Consumer Watch: Microinvesting through apps
More people are downloading financial apps– then not using them. Financial apps can help you budget and even grow your overall worth, but downloading them is not enough; you have to know how to use them. Some current financial app favorites include Stash and Acorns. Justin Cupler with The Penny Hoarder says these are a good way to get into investing when you don’t have a ton of money. Stash takes money out of your account, as little as five bucks a month, to micro-invest. You can pick where the money goes. “What’s cool about them as they put their investments in groups, so say you want to invest in robots, they have a group for that. You want to invest in solar energy– they have a green energy group,” says Justin Cupler, personal finance contributor at The Penny Hoarder.
Acorns are also a micro-investing app. This one takes smaller amounts of your cash when you make a purchase. “How this one works is instead of going into your bank account and taking out a fixed amount, it looks at how much money you spend. So say you bought something for $1.50, it rounds that up to the next dollar– to two dollars. It takes that 50 cents and puts it into your Acorns account, “says Cupler. Once the app gathers a minimum amount, usually five bucks, you can start investing.
A major concern when it comes to using financial apps is security. “Yeah, it can be scary to download this app and put all your financial information into it. One way to keep all your information secure is to download antivirus software,” says Cupler. Other safety tips include: Ensuring you are downloading the real app and not a duplicate. Do that by checking comments and app creators before you download; also, always use a secure Wi-Fi network or your own data. Regularly investing and growing the amount of money you invest requires budgeting. Pick an amount that you know you can commit to every month for your micro-investments. Penny Hoarder says it is unlikely that you’ll see huge gains with micro-investing, but you could see some gains after a year. Avoid taking that money out and spending it. Keep it as a part of your investments.