The Penny Hoarder |
- What Our Dream Job Winner Learned from a Month of No Spending
- Tornado Will Pay up to $1K to Sign Up — and Teach You to Be a Better Investor
- 25 Ideas on How to Lower Electric Bill
- Acorns Review: An App that Lets You Invest Without Thinking About It
| Posted: 18 Nov 2021 01:40 PM PST Some of the links in this post are from our sponsors. We provide you with accurate, reliable information. Learn more about how we make money and select our advertising partners. You've done it. You've built up a little cushion in your bank account — $1,000! It feels good, right? Those days of checking your account balance in a panic are behind you. Congrats! You're on the right path. Now it's time to think about some longer-term goals. What do you want to accomplish next with your money? Do you need to save more? Do you want to buy a home someday? Invest? What's the next step you should take? What are some specific things you can do to take your finances to the next level? We've got some ideas for you: 1. Invest in Real Estate (Even if You're Not a Millionaire)The stock market can be a scary place. Stock prices shoot up and down like a roller coaster ride, and who knows when the whole thing might crash? It would be nice to diversify and invest some of your money in real estate, but don't you have to be wealthy to do that? Now you can invest like the 1% does, and all you need to get started is $500. A company called DiversyFund will invest your money in private real estate — specifically, in apartment buildings it co-owns with its investors — and you only need $500. You can see exactly which properties are included in your portfolio through their online dashboard — like a 54-unit apartment complex in Salt Lake City, Utah, or a 30-unit waterfront property in Stuart, Florida. And you don't have to experience the headaches that come with being a landlord — DiversyFund does all the heavy lifting for you. Real estate has historically been very stable compared to the stock market. Over the long term, investing in the stock market will earn you an average annual return of 7%, adjusted for inflation, according to a number of studies. DiversyFund can't guarantee how its investments will perform in the future — no one can — but historically, real estate has outperformed the stock market for the past 30 years. So you don't need a fortune to invest in real estate. All you need to get started is $500. Sign up here to start investing today. 2. See if You Can Get More Money From This Company Here's the deal: If you're not using Aspiration's debit card, you're missing out on extra cash. And who doesn't want extra cash? Yep. A debit card called Aspiration gives you up to a 10% back every time you swipe. Need to buy groceries? Extra cash. Need to fill up the tank? Bam. Even more extra cash. This card used to have a huge waiting list, but you're now eligible to sign up for free. Enter your email address here, and link your bank account to see how much extra cash you can get with your free Aspiration account. And don't worry. Your money is FDIC insured and under a military-grade encryption. That's nerd talk for "this is totally safe." 3. Cancel Your Car InsuranceHere's the thing: your current car insurance company is probably overcharging you. But don't waste your time hopping around to different insurance companies. Use a website called EverQuote to see all your options at once. EverQuote is the largest online marketplace for insurance in the US, so you'll get the top options from more than 175 different carriers handed right to you. Take a couple of minutes to answer some questions about yourself and your driving record. With this information, EverQuote will be able to give you the top recommendations for car insurance. In just a few minutes, you could save up to $610 a year. 4. Add up to 300 Points to Your Credit Score You might not think your credit score is that important. In fact, you might not think much about it at all. But what happens when you want to buy a car? Or a house? Unfortunately, those three little numbers play a huge role in whether you'll be able to do that. And if you have an error on your credit report (one out of five reports do), that could stand in your way. Thankfully, a website called Credit Sesame will help you detect any errors — for free. It shows you why you have the score you do and gives you personalized tips to steer you in the right direction. Salome Buitureria, a working mom in Louisiana, found a major error on her report this way. Using Credit Sesame, she was able to fix the mistake and take additional steps to raise her credit score from 524 to nearly 700. Now she and her husband feel like they're in a better position for their biggest goal — purchasing a house. It only takes about 90 seconds to sign up. 5. Own a Piece of a Company for as Little $1 (Even If You're Not a Tycoon)Take a look at the Forbes Richest People list, and you'll notice almost all the billionaires have one thing in common — they own another company. But if you work for a living and don't happen to have millions of dollars lying around, that can sound totally out of reach. But with an app called Stash, it doesn't have to be. It lets you be a part of something that's normally exclusive to the richest of the rich — on Stash you can buy pieces of other companies for as little as $1. That's right — you can invest in pieces of well-known companies, such as Amazon, Google, Apple and more for as little as $1. The best part? If these companies profit, so can you. Some companies even send you a check every quarter for your share of the profits, called dividends.1 Download the Stash app here and they will give you a $5 sign-up bonus once you deposit $5 into your account. 6. Ask This Website to Help Pay Your Credit Card Bill This MonthNo, like… the whole bill. All of it. While you're stressing out over your debt, your credit card company is getting rich off those insane interest rates. But a website called Fiona could help you pay off that bill as soon as tomorrow. Here's how it works: Fiona can match you with a low-interest loan you can use to pay off every credit card balance you have. The benefit? You're left with just one bill to pay every month, and because the interest rate is so much lower, you can get out of debt so much faster. Plus, no credit card payment this month. Fiona can help you borrow up to $250,000 (no collateral needed) with fixed rates starting at 2.49%. Fiona won't make you stand in line or call a bank. And if you're worried you won't qualify, it's free to check online. It takes just two minutes, and it could save you thousands of dollars. Totally worth it. All that credit card debt — and the anxiety that comes with it — could be gone by tomorrow. This was originally published on The Penny Hoarder, which helps millions of readers worldwide earn and save money by sharing unique job opportunities, personal stories, freebies and more. The Inc. 5000 ranked The Penny Hoarder as the fastest-growing private media company in the U.S. in 2017. This posting includes an audio/video/photo media file: Download Now | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| What Our Dream Job Winner Learned from a Month of No Spending Posted: 18 Nov 2021 01:15 PM PST Brittany Cantu was in shock when she found out she was chosen for The Penny Hoarder's "Dream Job" challenge in October. To earn her $5,000 paycheck, Cantu had to kick one of her most persistent spending habits and save money for 30 days — all in an effort to find new and healthier ways to manage her money. Cantu was up for the job: She saved an impressive $621 simply by not buying stuff online during the course of the month. As a registered nurse, wife, and mother of three, Cantu stays busy. In her free time, she had built a habit of online spending. "I definitely have a shopping problem," she said. "I use a deal website that gives me deals at places like Target and Amazon. It's easy to overspend because my 10-month-old son doesn't like to nap by himself so I get really bored when he's sleeping on me." Her growing kids also factored into her online buying habit. "The kids grow out of their clothes constantly, so kids' clothes is a huge item that we usually need to buy," she said. And, shoes, don't forget about the shoes. "Shoes are a big one for me. I have way too many shoes. I just like shoes." She was excited about the challenge because of the progress her family wanted to make toward their financial goals. "We want to buy a house in the next year or two, so it really helped us to get going on that a little quicker," she said. Not only will her newfound habit of spending less help toward that goal, but her $5,000 paycheck will as well. "We'll probably use that toward a down payment," she added. She said the month-long experience helped her be more content with what her family already has — and actually provided an opportunity to make even more cash by selling some of that stuff. "I still browsed a little bit to see if there was anything I really needed, but honestly we have everything we need," she said. "So I started going through some old stuff that we have and getting rid of it and making money that way too." She sold $200 worth of stuff during the month. Add that to the $621 she saved and that's an $821 turnaround. Pretty impressive! Did she find the challenge to stop online spending difficult? "It definitely feels rewarding when you buy stuff and you get packages every other day. It was kind of hard the first week or two because I had such a habit of spending," she said. "But it got easier as I went. I was actually surprised that it got much easier. I definitely felt like I built more of a habit of saving, rather than spending." She says she only gave in once because of a deal she couldn't pass up. "I saw a sale on snow boots, and the kids definitely needed snow boots this year." The key, Cantu learned, is to remember how small purchases add up over time. "Most of my purchases were around $30. That doesn't seem like a lot, but when you keep buying that $30 stuff it becomes hundreds to thousands of dollars," she said. "At the end of the month, I'm thinking, 'Where did this money go?' And then we don't even use these things that we're buying that often. So it's definitely a habit you can break." She had a great experience meeting The Penny Hoarder Dream Job challenge, and she's learned a lot over the course of the month. "I was happy to be picked and challenged, and I think I really needed it. It was eye opening." What spending habit could you give up for a month to make progress toward your financial goals? Robert Bruce is a Senior Writer for The Penny Hoarder. This was originally published on The Penny Hoarder, which helps millions of readers worldwide earn and save money by sharing unique job opportunities, personal stories, freebies and more. The Inc. 5000 ranked The Penny Hoarder as the fastest-growing private media company in the U.S. in 2017. This posting includes an audio/video/photo media file: Download Now | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Tornado Will Pay up to $1K to Sign Up — and Teach You to Be a Better Investor Posted: 18 Nov 2021 12:13 PM PST Some of the links in this post are from our sponsors. We provide you with accurate, reliable information. Learn more about how we make money and select our advertising partners. There are so many investing apps out there now — sometimes it's hard to know which one to choose. But if you're tired of the gamification of the stock market and want to actually improve your investing strategies and knowledge, we like an app called Tornado. Tornado is an investing app created by Wall Street veterans who want people to become better long-term investors. And they're giving new users up to $1,000 to join and start improving their skills. Skip the Games and Start Becoming a Smarter InvestorIf you're just looking for the next GameStop frenzy — this app isn't for you. But if you're focused on understanding the why behind stock market trends, making smarter trades and investments and growing your net worth, Tornado is a better choice. What makes Tornado different from those other investing apps is its commitment to helping people become better investors. All within your subscription, you can get expert-level insight and ask leading investors your burning questions. Plus, the Tornado newsfeed is tailored to cover your investments and your interests — think of it like a personalized replacement for your Wall Street Journal ticker (but for a quarter of the cost). Even better? Tornado will pay you to better your understanding of ETFs, index funds, retirement accounts and more with its Learn and Earn Program. Get up to $1,000 When You Create a Tornado Investment AccountSigning up for a Tornado account can earn you some serious cash. When you create your account, you'll be randomly selected to earn anywhere between $10 and $1,000. Plus, you'll get a deposit bonus when you make your first transfer from your bank account. You can also earn up to $50 when you participate in their newly launched Learn and Earn, which serves up professionally vetted educational content tailored to your experience level. Tornado costs $4.99 a month and includes up to 25 trades (but you can trade more for additional costs). And by taking part in their Learn and Earn program, you can easily offset your monthly subscription costs. You might be thinking — hey! Those other investment apps don't charge a fee. They might not outright, but they take a share of each trade you make, which can add up to thousands of dollars each year — making a Tornado subscription a steal when you add up what you could be paying for all of its features separately. So if you're ready to become a better investor, create your Tornado account now and start improving your net worth right away with your raffle winnings. Kari Faber is a staff writer at The Penny Hoarder. This was originally published on The Penny Hoarder, which helps millions of readers worldwide earn and save money by sharing unique job opportunities, personal stories, freebies and more. The Inc. 5000 ranked The Penny Hoarder as the fastest-growing private media company in the U.S. in 2017. This posting includes an audio/video/photo media file: Download Now | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 25 Ideas on How to Lower Electric Bill Posted: 18 Nov 2021 09:00 AM PST It's going to cost more to heat your home this winter, thanks to global price hikes for natural gas, heating oil and other fuels. How much more? The federal government is saying we could see spikes of 54% in our heating bills compared to last year. That's a big jump and something that many of us will struggle to afford. For people lucky enough to use electricity for their heating systems, it's predicted that their bills will only go up about 6%. Still, that's money that you could use elsewhere. This dreary news is coupled with the prediction that it may be a colder winter in many parts of the country, too. But there are some ways to keep your energy bill in check this winter (and in the summer, too), and much of that has to do with maintenance. 25 Ways to Reduce Your Electric BillFrom bundling up to not heating uninsulated rooms to simple maintenance checks and fixes, these two dozen plus one ways to avoid sticker shock from your electric bill are worth your efforts. 1. Get a Free Home Energy AssessmentMany power providers offer free home energy assessments or home energy optimization kits. Xcel Energy, which serves much of the northern midwest and mountain regions of the U.S., provides a free virtual visit with a Home Energy Squad member, followed by a free kit to optimize your residential electrical usage. 2. Seal Cracks and Leaks Is How to Lower Electric BillWhen the heat is high, don't let any precious warm or cool air escape due to drafty doors and leaky windows. Seal these money-draining spaces with inexpensive draft tape, often ranging from $9 to $15 on popular sites like Amazon. 3. Upgrade to Efficient Equipment With a RebateAlthough upgrading heating systems and thermostats can be pricey, many electrical companies offer rebate programs. ConEd, which serves New York City, offers rebates on smart thermostats. So does California. Check with your energy provider to see if rebates are offered in your area. This could mean more than $100 back in your pocket 4. If You Have a Smart Thermostat, Use ItFor those who already have a Nest or other programmable thermostat in your home, take the time to program it. Smart thermostats offer zonal and timed heating and cooling, which on average will save most homeowners 10-12% on their heating bills and up to 15% on their cooling bills. 5. Take a Timeout on Energy ConsumptionNo, not that kind of timeout. To cheaply lower your electric bill, consider adding an outlet timer to window unit heaters. These helpful gadgets cost $10 to $20 and will make your home more energy efficient and limit the amount of "phantom power" (the power your devices leech from outlets even when not turned on) contributing to monthly energy bills. Or, turn down the thermostat and head to the mall or library for a few hours.  6. Let Mother Nature Do the WorkWhen the sun is shining, make sure that you have your blinds and curtains open to let the warmth in. Close them at night as an extra layer of insulation against the cold. 7. Invest in One-Time Duct CleaningA major cause of ineffective or inefficient home cooling may be from clogged ductwork. Over the years, debris like dust, pet hair, and dander can accumulate in vents and make it difficult for air to flow smoothly throughout your space. Cleaner ducts = less need to turn up the heat. Fortunately, HVAC system maintenance is pretty affordable, and a one-time vent cleaning will only take $200-$300 out of your home maintenance budget. Don't let the heat go out on the coldest day of the year. Keep up with the maintenance with our helpful tips on HVAC care. 8. Change Your Air FilterAir filters do just that — filter out tiny particles and debris generally undetectable to the human eye. This provides us with clean air circulating in our homes. However, these filters need to be changed about every six months in order to work properly. Clogged filters inhibit effective air flow and can lead to higher energy costs due to forcing your air systems to work harder to pump out air. 9. Run Appliances at NightSome electric companies charge higher rates during the day (aka peak hours) and lower rates in the evening (aka off-peak hours). It can help save a few bucks here and there to run larger appliances like dishwashers, clothing dryers, and washing means while you're getting some shut-eye. 10. Make the Move to LEDIncandescent bulbs release about 90% of their energy as heat. Couple that with the fact that they generally are not energy efficient and it's enough to make the case to switch to LED bulbs. LED bulbs can save consumers as much as $75 per month and they give off little-to-no heat. 11. Replace Window Screens for Home EfficiencyAs we already mentioned, leveraging Mother Nature when possible to decrease your bill and your energy consumption is a great idea. In this case, replacing snared, ripped window screens with relatively inexpensive new ones can help to better insulate your windows, preventing any unwanted major cracks or gashes from emitting cold air into your home. 12. Insulate Hidden AreasAny item in your house that has pipes behind it (toilets, sinks, etc.) likely is simply sitting in an open hole in the wall with no insulation. This means that in the winter warm air could be leaking out or cold air could be seeping in. Consulting with a professional to learn more about how adding insulation behind toilets and sinks can help make your home more energy efficient by eliminating these air leaks across your house. 13. Close the DoorIf you live in a multiroom home, closing the doors to unused rooms will consolidate your heating usage to fewer rooms, and it will keep that room much warmer. Pick a room or two to hang out in for the majority of the day, and shut the doors to the others to naturally create zonal heating. A painless way to lower your electric bill. 14. Reduce Phantom PowerEven if something like a lamp or TV are not turned on, the fact that they remain plugged in means those items could be leeching "phantom power" from your home, and jacking up your electric bill. Phantom power refers to the electricity consumed by objects when they are off or in standby mode. This allows them to quickly turn on, but means your electric bill pays the price. Consider unplugging lamps, appliances, and more when not in use to save on your next energy payment. 15. Add an Energy Efficient Power StripWhile you're unplugging unused objects, think about adding in an energy efficient power strip to cut down on your bill. Some estimate that installing energy efficient power strips (which are only $20 to $30 each) can decrease home power use from 20 to 48%, which translates to more than just a few dollars back in your pocket. 16. Lower Hot Water Heater TemperatureThe default temperature for water heaters is 140 degrees, which wastes between $36 and $61 a year, according to the Department of Energy. According to the DOE, lowering the temp to 120 degrees is perfectly fine for the majority of the population. If you or a member of your household has a chronic respiratory disease or a suppressed immune system, though, it may be best to keep your water heater set to the default temp. 17. Decrease Door Drafts With a Draft StopperUsing the aptly named draft stopper on your doors can further prevent air leaks throughout your home. For only $8, you can keep prized warm air better circulating in your space without losing it to wasteful door leaks. Another painless way to save money. 18. Use Exhaust FansExhaust fans are those that are generally already built into your home, like the kind above a stove or shower. These fans do an exceptionally good job at circulating air and removing moisture and humidity from that air. Running these fans even when not cooking or in the shower can improve air circulation and decrease the need to crank up the heat and your power usage. Speaking of fans, turn ceiling fan blades so that they rotate clockwise in the winter so that warm air is pulled upward and distributed throughout the room. If you've done the rotation change correctly, you should not feel any air if you stand underneath them. 19. Go Through a ChecklistOwning or renting a home comes with all sorts of maintenance. It can be hard to keep track of what to do at what time of year in order to keep your space clean and efficient. Referring to a home checklist like this one can ensure you are ticking off the correct boxes to prepare your home for warmer months, potentially saving you some dough on electric bills throughout the winter and then next summer. 20. Rearrange Your FurnitureGo through the house and check to make sure that you don't have beds, dressers, bookcases or other furniture blocking heating vents. If the vents are blocked and heat isn't evenly distributed, this may cause you to turn up the thermostat.  21. Bundle UpLayering your clothes is the original way to save money on your winter electric bill and lower your thermostat a few degrees. If your clothes budget is already stretched, websites like ThredUp or heading over to your local Goodwill are excellent ways to get gently used but extremely warm clothing for just a few bucks a piece. 22. Don't Heat Uninsulated RoomsWhile we all want a toasty home to return to after a long day, spending money heating rooms like a basement, garage, attic, or closed-in porch is a major drain on your winter electric bill. Rooms such as those tend to not be insulated with walls instead made from concrete or wood slats. With no insulation to hold in the heat, you're essentially wasting your money trying to warm them up. Best to bundle up when in those rooms or close them off entirely during colder months. 23. Insulate Your Water HeaterInsulating your water heater can save you about 7-16% in water heating costs and eliminate standby heat losses by 25-45%. It's pretty easy to DIY — order a water heater jacket like this one for $25 from Amazon, or check with your local utility company to see if they offer jackets for free or with a rebate. 24. Use Your KitchenCooking and baking at home naturally warms up the kitchen and then adjacent rooms. You can save money, too, by cooking at home rather than getting take out or going out. After you're done using the oven and it's turned off, you can leave the door ajar just a bit to let that dwindling heat escape. Make sure to keep children out of the area if you do this and never use an operating oven as a heat source by leaving the door wide open. 25. Turn Down the ThermostatWhen you leave for work or go to sleep, turn down the thermostat. At night you can add a few more blankets to the bed or even turn up the eclectic blanket, and if you're at work, you won't know the difference. Turning down the thermostat by 10 degrees can save you 10% on your bill over a year. Frequently Asked Questions (FAQs) About Electric BillsWe answer some of the most asked questions about electric bills and what makes them so high. How Do I Reduce My Electric Bill?Most electric bills are tabulated by multiplying the rate you pay per kilowatt of energy by the total hours of device and electricity usage that month. This gives you your total electric usage in kWh — kilowatts per hour. From this formula, we can see that electric bills are based on how many hours of electricity you use each month. To reduce your electric bill, take stock of how many hours of electricity you use a day (some things like water heaters and refrigerators will always be running, and that's ok) for things like the dishwasher, washer and dryer, floor lamps, and accessories such as stereo equipment. Then, begin to see where you can limit the amount of time those home furnishings are in use. This will slowly but surely start to reduce your home electric bill. Why Is My Electric Bill So High?There can be many reasons as to why your electric bill is so high. One major reason could be that you leave all your appliances and furnishings plugged in all the time. This is called "phantom energy costs" or "vampire energy costs," meaning that even when a device is not directly in use, if it is plugged in it is still using a bit of energy. There may be things that can be unplugged like computers or entertainment systems. Another reason could be that your home is not energy efficient. If appliances such as dishwashers are decades old, it's likely that those models are no longer the most energy or water-efficient on the market. Although no one wants to purchase a brand-new major appliance, this can save you money in the long run. Lastly, poor insulation can be a huge drain on energy efficiency. If you have major cracks in your window frames, walls, baseboards, and more, you are basically watching your hard-earned dollars fall through those gaps. Likewise, if doors are left open (especially the garage door or patio door) haphazardly you are bleeding cold or warm air (depending on the season) through those areas, causing your home heating or cooling to work harder, thus costing you more money on your electric bill. What Costs the Most on My Electric Bill?The most costly items on an electric bill are the culprits you probably already guessed: air conditioning, heating, and large home appliances come in at the top of the list. This is why it makes it all the more important that your home is energy efficient with updated models of each home appliance. Some sneakier money-eaters on your electric bill are incandescent bulbs, hair dryers, and space heaters. A hair dryer consumes about 1,200 watts per hour of usage and costs 12 cents an hour to operate while a fridge generally only consumes 1,000 watts and costs 10 cents an hour to run. While you may not be using a hair dryer for an hour, you can see how daily use of such an accessory could add up. This is where a free home inspection by your local utility company may come in handy, if such a service is offered. Energy experts can let you know if your appliances are up-to-date from an energy standpoint as well as what other surprising items in your home may be contributing to an overly high electric bill. Colorado-based writer Kristin Jenny focuses on lifestyle and wellness. She is a regular contributor to The Penny Hoarder. This was originally published on The Penny Hoarder, which helps millions of readers worldwide earn and save money by sharing unique job opportunities, personal stories, freebies and more. The Inc. 5000 ranked The Penny Hoarder as the fastest-growing private media company in the U.S. in 2017. This posting includes an audio/video/photo media file: Download Now | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Acorns Review: An App that Lets You Invest Without Thinking About It Posted: 18 Nov 2021 07:00 AM PST Some of the links in this post are from our sponsors. We provide you with accurate, reliable information. Learn more about how we make money and select our advertising partners. Quick Navigation You've probably heard of Acorns. It's a popular micro-investing app — even among people who don't know a lot about investing — that helps you save money in a diversified portfolio. By using one of its most popular features, you invest money without even really thinking about it. We love that convenience. But investing is actually a serious endeavor. In this Acorns review, we'll cover the app's features, investing strategy and cost, along with other important details you should know before you get started. What Is Acorns?Acorns is a California-based fintech company that helps simplify and automate investing. Users can contribute money to a passively managed, diversified portfolio through recurring transfers and/or spare change round-ups. Founded in 2014, Acorns has quickly become one of the most profitable and popular micro-investing apps in North America. The start-up has an estimated 8 million subscribers and was valued at roughly $2.2 billion in May 2021, according to CNBC.
The company has steadily expanded its financial services over time. The Acorns app now offers banking products (including a checking account), educational resources, a debit card, custodial accounts for kids and an automated retirement account service. Acorns derives about 80% of its revenue from monthly user subscription fees. The other 20% comes from interchange fees and brand partnerships. Acorns offers two membership options to subscribers. Both accounts charge a flat monthly fee: Personal
Family
Let's dive into what these services include and other features in the Acorns app. How Does Acorns Work?Getting started with Acorns is easy. You open an account by visiting the Acorns website or mobile app, enter some personal information and then link your banking account to the app. Acorns has a $0 account minimum balance, but requires at least $5 to start investing. Acorns ServicesAcorns markets its saving and investing features with five different names: Invest, Later, Spend, Early and Earn. Most features are available with the $3 account, but Acorns Early is only available with the $5 Family account. Acorns Invest (Taxable Brokerage Investment Account)This is a taxable investment account that puts your money into a collection of exchange-traded funds (ETFs). Acorns creates your portfolio based on a questionnaire designed to gauge your risk tolerance and financial goals. You'll answer these questions when you create your account. You can add money to your Acorns investment portfolio via round-ups, recurring transfers from your bank or one-time deposits. We'll discuss more about how Acorns invests your money. Acorns Later (Traditional IRA, Roth IRA, SEP IRA)This is a tax-advantaged retirement account. A retirement savings account is an investment portfolio, but it comes with some specific federal tax perks (and a few penalties, especially for early withdrawals). The Acorns app lets you pick from either a traditional or Roth IRA. They also offer a SEP IRA option for self-employed people. Saving for retirement is important. If your employer doesn't offer a 401(k) plan, opening your own individual retirement account is a great way to start growing your nest egg. The Acorns Later (IRA option) is a separate account from your Acorns Invest (taxable brokerage account). You get access to both with the $3 tier. Like Acorns Invest, your IRA portfolio is made up of ETFs. You can also set up recurring transfers from your linked account to your Acorns retirement account. Acorns Spend (Checking Account/Debit Card)Acorns Spend lets you open a checking account through the app's partnership with Lincoln Savings Bank. You'll also get access to a Visa debit card connected to your Acorns Spend account. The Acorns checking account doesn't charge overdraft fees. Instead it pauses your account until you add funds and get your balance out of the red. It also doesn't charge foregin transaction fees if you use your Acorns debit card abroad. Plus your card can withdraw cash from more than 55,000 fee-free ATMs globally. You can fund your Acorns checking account four ways:
Acorns Early (UGMA Custodial Accounts)Acorns Early lets you set up investment accounts for your children, also known as a UTMA/UGMA account. You can open multiple UTMA/UGMA accounts with an Acorns Family plan — whether they're for your child, a grandchild, a niece or even a godson. To get started, you'll need the child's full name, date of birth and Social Security number. Like Acorns' other offerings, you only need $5 to get started with Acorns Early, and your money funds an automated, diversified portfolio of exchange traded funds. A UGMA account is a custodial brokerage account for children. You can transfer this investment account to your child when they become a legal adult. Unlike a 529 plan that can only be used for educational expenses, a UTMA/UGMA is more flexible on how the money can be spent (you can use the funds for anything that benefits the child). Once the child reaches the age of transfer, usually 18 or 21, they become the account's owner and can use the money for any reason. Make sure to research the different types of investment accounts for kids or speak with a financial advisor to find the best account for you. Acorns Earn (Cash Back Feature)Formerly known as Found Money, Acorns Earn is the app's online marketplace with over 200 brands. When you shop with these merchants, extra money will be added to your Acorns Invest account, usually as a percentage of your order total or a flat dollar amount. For example, you can earn 50 cents on each Uber ride but 3.5% back on Uber Eats orders. For "Tap and Get" offers, you have to go through the Acorns app and complete a purchase with their partner using your mobile phone. For "Simply Spend" offers, you'll receive cash back any time you use your Acorns-linked card to make purchases with partner brands. Make sure to read the instructions carefully on each offer or you'll likely miss out on the cash back. Aa a final note: While there are some good offers on Acorns Earn, many are incentivizing you to buy things you may not really need. Purchasing a fancy product or service just to get a few bucks invested in your Acorns account kind of defeats the purpose of saving for your future. Acorns also has a few features common to all of its investment accounts. Round-UpsRound-up is probably Acorns' best-known feature. After linking a debit card, your purchases are rounded up to the nearest dollar and the spare change is swept into your Acorns investment account. For example, if you spend $10.20 on Amazon, you'll be charged $11 and the 80 cent difference will be invested into your portfolio. This makes round-ups an easy way to invest when you spend money on everyday purchases. If you have the Acorns Visa debit card, round-ups are automatically deposited into your account. If you don't, Acorns transfers the money from your linked account to your investment account once it reaches at least $5. Recurring InvestmentsYou can set up automatic transfers from your linked banking account to your Acorns account on a daily, weekly or monthly basis. Enabling recurring contributions is a great way to take advantage of dollar-cost averaging and consistently invest money for your future without thinking about it. You can opt in for recurring transfers in addition to spare change round-ups to grow your account balance even faster. Acorns also lets you make one-time lump-sum deposits. Acorns Grow Your KnowledgeThis is the hub for Acorns' educational articles and advice on personal finance and investing. Articles are broken into different categories, like retirement and borrowing, and they're written in simple terms digestible in an app-friendly format. For more educational resources, you can check out the grow.acorns.com site, powered by CNBC, which features articles on market trends and financial literacy topics. How Acorns Manages Your MoneyAcorns is a robo-advisor, meaning it uses computer software and algorithms to select a pre-made portfolio based on your age, income, risk tolerance and time horizon (how long before you may need to access your funds). After answering a brief questionnaire, Acorns invests your money into a portfolio of exchange traded funds (ETFs), which bundle numerous stocks or bonds into a single fund. (FYI: ETFs are sometimes referred to as index funds.) Acorns uses iShares and Vanguard ETFs, which come with very low expense ratios. An expense ratio is the operating fee charged by an ETF. Acorns offers five different portfolios, ranging from conservative to aggressive. The aggressive option consists of stock ETFs while conservative options expose you to more bond ETFs. You can choose a different portfolio if you disagree with the algorithm, but you can't pick your own individual stocks or bonds with an Acorns account. Acorns uses modern portfolio theory, an investment strategy that works by diversifying you across different asset classes to help lower risk and maximize returns. ETFs span six different asset classes:
Because ETFs can cost hundreds of dollars per share, Acorns builds your portfolio with fractional shares. That's how you can get started with as little as $5. Once you start investing, your portfolio will be periodically rebalanced to maintain its target asset allocation. You also get the benefit of automatic dividend reinvestments. Acorns Sustainable Investing PortfolioAcorns gives users the option to save and invest in a sustainable portfolio made up of ETFs graded using environmental, social and governance (ESG) criteria. Acorns says these socially responsible investing portfolios are designed to provide exposure to more sustainable companies, while still striving to perform as well as a traditional portfolio. You can opt into Acorns' sustainable portfolio for no additional monthly cost. However, the ETFs in this ESG portfolio come with slightly higher expense ratios. Acorns Cost and FeesAcorns charges a flat monthly management fee for its services. It advertises two different membership tiers: a $3 option and a $5 option. Prior to Sept. 21, 2021, Acorns offered a third membership option for $1 per month. Acorns Lite gave you access to its automated portfolio and investment services. If you wanted an IRA or checking account, you had to upgrade to the $3 option. Acorns recently phased out Acorns Lite. Existing customers can (potentially) still keep the $1 option, now called Acorns Assist, by following these steps on the company's website. Acorns Account Pricing
We suggest locking in that $1 Acorns Assist price if you can. Otherwise, spending $36 a year for a brokerage account is pretty expensive, especially if your account balance is low. Other robo-advisors, such as Wealthfront and Betterment, charge a management fee as a percentage of your portfolio balance instead of a flat monthly fee. That may not sound like a big deal, but imagine this. Let's say you funded a new investment account with $100. Betterment charges an annual management fee of 0.25% for its basic account, which would cost you just $0.25 a year. Compare that with investing $100 in the Acorns Personal account, where the annual fee would total $36. Obviously, Acorns' management fees take up a smaller proportion of your balance as you invest more money. Still, you'd need about $13,000 in an Acorns Personal account to get down to an annual fee of 0.25%. However, if you're more comfortable with Acorns or want to give it a try, at the end of the day, we're just happy you're investing. It's a good first step, just mind those management fees over time. What Acorns OffersHere's a closer look at the nuts and bolts of Acorns accounts. Acorns Review: Services and Features
Pros and Cons of AcornsAcorns offers several advantages, but it's not for everyone. It's important to understand the pros and cons of any investing app before you sign up. Pros
Cons
Frequently Asked QuestionsCan You Make Money With Acorns?Yes, that's the whole idea! You'll make money as your investments gain value over time. You can also earn bonus investments, known as Found Money, by participating in offers from the company's business partners. Finally, Acorns also offers referral bonuses to users who get their friends and family to sign up for the app. Is It Safe to Invest With Acorns?Yes, Acorns is a safe and secure financial services app. Just like other brokerage accounts, Acorns complies with federal law and is registered with the U.S. Securities and Exchange Commision. Its checking account is also FDIC insured, giving you the same protection as a traditional bank. What Are the Cons of Acorns?Probably the biggest drawback of Acorns is that its $3 or $5 per month account options are relatively pricey for people with low account balances. Acorns phased out its $1 Acorns Lite option for new users in September 2021. Rachel Christian is a senior writer for The Penny Hoarder. This was originally published on The Penny Hoarder, which helps millions of readers worldwide earn and save money by sharing unique job opportunities, personal stories, freebies and more. The Inc. 5000 ranked The Penny Hoarder as the fastest-growing private media company in the U.S. in 2017. This posting includes an audio/video/photo media file: Download Now |
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