WASHINGTON — One of the keys for successful saving is to make it automatic, and new online services make it easier and cheaper to set money aside for short-term and long-term goals.
Janet Bodnar, editor of Kiplinger Personal Finance, tells WTOP that one service savers-to-be should consider is Digit. The automated service transfers small amounts of money from a checking account to a savings account every two to three days.
The service will determine how much a saver can afford based on their spending practices, she says.
“This is something you don’t have to think about and probably is not going to take a big bite out of your finances,” she says.
Simple is a digital version of the old envelope system, Bodnar says. The service provides an interest-bearing online savings account that allows consumers to create subaccounts for specific goals like a vacation or a new car.
Simple will tell consumers what remaining cash is available to spend.
For longer-term savings, consumers might want to invest some of their money. Kiplinger recommends Betterment, which was named the best online investment adviser.
Savers can set aside a monthly amount or a lump sum and Betterment will set up an investment portfolio to help consumers reach their goal. The service can rebalance the investment or reinvest dividends.
However the service charges an annual fee based on a percentage of the balance, Bodnar says.
“It’s for people who want to get some money management advice, but they want to do it simply and for a smaller fee than you’d have to pay a real life money manager, who would take a larger portion of your account,” she says.
Find more information about free and low-cost saving services at kiplinger.com.
