In 2015, Linnea Nelson, a Denver-based IT professional, found herself in a situation that commonly plagues Americans.
She didn’t have any savings.
21% of Americans have nothing saved at all, and 1 in 3 Americans have less than $5,000 set aside.*
“I had maybe a couple hundred dollars, nothing that would be useful,” said Nelson.
The turning point came when she needed a new roof, but with no savings, she resorted to borrowing $10,000 from a friend. “Around that time I told myself, I need to grow up and get control.”
Spoiler alert: She’s in control, and now has over $30,000 in savings thanks to Digit, an automated savings app.
Let’s chronicle how she got there:
“I Didn’t Know How To Save”
Like most Americans, Nelson didn’t know how to go about saving.
“I didn’t know what the right amounts to save were. I didn’t know if I should take 50 dollars out of every paycheck to save or $500, I didn’t know what I could afford. I didn’t have a method.”
From the rabbit hole of online research, she came across an article talking about a new way to save, with Digit. “Since I had no savings anyway, it looked like a great way to not have to be an actual adult and still save,” remembers Nelson.
Save Money Without Thinking About It
For Nelson, Digit was an extremely effective method to help her save without doing much besides linking a checking account.
On a daily basis, their algorithm analyzed what she could afford to save based on her income, spending, and bills and then withdraws small amounts into an FDIC-insured Digit savings account.
“I don’t have to think, it just figures it out. And the savings change based on my income and spending.”
Digit is free for the first 30 days and then it’s $5 a month after. Savers will also receive a 1% annual Savings Bonus, paid every 3 months.
“It’s a reasonable price to pay someone else to do the adulting,” said Nelson, who works in cybersecurity. ”And I liked that they explained why they would charge a fee instead of selling data.”
In the first year and a half of using Digit, Nelson managed to save almost $3,000. A huge milestone compared to the few hundred dollars she had before.
This amount quickly came in handy when she and her family were left stranded on the side of a road overseas in Europe.
Emergency Funds To Save the Family Trip
It was in April 2016, when Nelson and her extended family embarked on a road trip to tour 10 European countries in her sister’s van when after a few hours outside of England, the van broke down.
“It was a holiday weekend. We only found one place to rent another van and it was going to cost $2,200.”
Her family thought that was the end of the trip, but Nelson decided to check her Digit balance. Almost $3,000. She had enough!
“I paid for the van with the Digit savings. The trip turned out awesome and it was totally worth it.”
More Travels on the Horizon
Nelson’s post-road trip savings goal included upgrading her kitchen countertops at $3,000. She decided to let the amount grow after she reached that goal, thinking that she could wait to upgrade her entire kitchen.
“When I actually reached $30,000, I thought, well maybe I can live with a crappy kitchen and just go travel more,” laughed Nelson.
So where will her Digit money take her next?
“Since I just spent 2 weeks in Croatia and Bosnia last month, my next is either Africa or Machu Picchu, whichever comes up with the perfect price first.”
*Image courtesy of Linnea Nelson
*21% of Americans statistic source: Northwestern Mutual Planning & Progress Study 2018