Podcast Correction
I'm sorry if this has already been posted somewhere but I was listening to Jesse's review of Acorns and wanted to let him know that you can add credit card round up accounts and not just checking accounts. I agree, only getting round ups from checking would be worthless to me too since 90% of my charges are from credit.
If you login to your acorns account on the web you can click on the little profile icon at the top right and click settings. Under personal settings on the left click on linked accounts and then click on add accounts.
Thanks for the podcast Jesse. While checking on my own settings I realized I need to add my other two credit cards to Acorns for even more roundups!
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One should not be using round up apps when they are using YNAB. Be deliberate about your savings and investing through your budget rather than it being incidental (and creating extra work).
The mistake was probably Jesse talking about the service in the first place.
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nolesrule Jesse literally did a podcast about using Acorns and YNAB together, and you're going to say that's wrong? Come on now.
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Fake Names Are Stupid Yup. I'm going to say that using any "round it up" or "keep the change" program while using YNAB is unnecessary, redundant and actually goes against the YNAB method of being deliberate with your spending and savings.
If you want to save money, budget it to a category. If you want to invest money budget it to a category and send it off to an investment account. Nickel and diming using these programs is transaction churning and playing mental games rather than being deliberate.
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Fake Names Are Stupid Also, Jesse may have come up with YNAB, but I think the method has passed him by. In some ways he's lost touch with it.
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My knowledge of Acorns only on the surface, and I haven't listened to the podcasts (but I totally want to start!). But man, I have a friend I'd been coaching on YNAB for over 2 years, and everytime I thought she was finally on track, she'd throw me a curveball. I think the last straw was when she said she thought Acorns would "solve her problems" and I slapped my forehead hard. I never saw her budget myself, and never knew what kind of advice of mine she was actually implementing, but when I heard "Acorns" I just lost it.
So I totally agree with nolesrule that while it might be a fun app to experiment with, and could be good for mostly young people who would otherwise bleed money like crazy, it should have no place in the YNAB world. Just my opinion.
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I disagree. I see nothing wrong with being deliberate about savings in addition to having a service like Acorns. I have a 401k, Roth IRA, HSA, standard savings, and I also let Acorns do round ups for me. They are small but when they come in I categorize them in YNAB as Investments. After a month or two you will know about how much gets rounded up every month and be fairly prepared for it. I make room for it in my budget because it's working well for me. I've been doing it since 2016 and without hurting my budget or me really doing anything at all, I've accumulated almost 10K and I've made some great profit from the money I've put in.
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suninmoon You have to budget for any money leaving your budget to investment accounts anyway, so you might as well be deliberate about it, rather than relying on "keep the change" programs. Then just invest it on your own.
It also creates additional unnecessary transaction churn and small tax lots for your investments, which can create a mess. Heck I don't even reinvest dividends in my taxable account until I have more money to invest. Keeps things cleaner.
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suninmoon Why not just have an investment category and budget to it every month like groceries? If you say you know how much it's going to be, it's a lot less busy work to just budget $15, $50, $150 or whatever. I have an investment category and I budget the same amount to it every month and have been doing so for about 4 years. On the 30th of the month, that amount is auto-debited from my checking account to go into my investment account using the category "Investments". It's in YNAB as a recurring transaction. So I only have to do one thing a month - hit the quick budget button for Amount Budgeted Last Month.
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jenmas I do the same thing with a defined amount but on my paycheck schedule (every time I get paid). I have a goal that matches 2 paychecks a month worth. Twice a year, I have to increase it to 3 paychecks worth.
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nolesrule jenmas Actually Acorns is the only thing in my investments category because all my other investments are taken out before they get to me. As far as the transaction churn, it's not a lot really. In the month of June I think I had 11 or 12 Acorns transactions. It waits a few days and rolls several into one transaction.
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I just listened to the podcast. I'm surprised Jesse is experimenting with Acorns. It is the opposite philosophy of YNAB. YNAB is about intentional spending and saving. Rule 1 is to give every dollar a job. Using YNAB correctly, you should know exactly what you have available to invest.
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Superbone That's why I said the real mistake was having it being a subject of a YNAB podcast... other than to point out the conflict with the YNAB method.
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Superbone Wow that's weird. Why do you guys think that is? Do you think he's trying to bring in younger folks who are already attached to this method of savings? I gotta listen to this thing.
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Annieland Why not? Compromise the method to gain customers. Not the first time they've done that.
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I use Acorns (now called Raiz in Australia) but without the round up feature and find it a really good intro to investing. With the rising popularity of robo investors like this I’m glad they’ve started to make an appearance in the podcasts.
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QC I suppose it's OK as an introduction to investing. I did the same thing with Betterment years ago (also brought up by Jesse, btw). But you're paying a relatively high fee for that introduction. Once you get the pretty easy hang of index investing, you can forego those extra fees on top.
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Superbone Yeah I see a lot of criticism of Acorns and apps of it's ilk because of fees. Yes, they're high but if you think about that as the cost of being introduced, gaining an interest and then continuing your education with cheaper providers then...it's not a bad exchange. I think those who know the ins and out of investing sometimes forget just how daunting it can be to be a newbie to it and demonising Acorns et al is probably more harmful than helpful.
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nolesrule said:
other than to point out the conflict with the YNAB method.Which he didn't address.
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Hi suninmoon ! We appreciate you reaching out about the YNAB Podcast 386 - Testing Rounding Up.
The particular account Jesse is using for the Acorns test is a checking account, not that credit cards aren't an option. Sorry for any confusion there!
It sounds like the experiment will continue! Stay tuned for the finals results. 😄-
Nicole Jesse clearly, and incorrectly, says that you can't link credit card accounts to Acorn in the podcast. He either worded it poorly or missed that part when setting up Acorns.
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Hi Fake Names Are Stupid !
Jesse says that he wasn't able to link his credit card, so his round-ups are only based on his Checking spend. I see where the confusion came in at and thank you suninmoon for clarifying! :)
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I get how something like Acorns can be problematic/in conflict with the YNAB method for people who are new to budgeting and aren't used to saving part of their paycheck. At the same time, I still have the question: how is using Acorns in conjunction with YNAB (aside from the extra work) is any different than saving the change when you spend cash?
I've been doing this for years: saving quarters for the meter, keeping other coins in a little bank and, when it's full, taking it to the credit union to be counted (for free!) and deposited in my account. I still think about money in terms of the YNAB method--those habits are second nature now--but I don't see the harm in saving up change until it's a little bigger and doing something more meaningful with it.
Is it different with cards? Do you *have* to invest with Acorns?
Maybe I'm missing something... But YNAB has gotten me out of debt and into saving 34% of my paycheck every month. With those things in place, is there still an issue with something like Acorns?
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Hi JilesMulijin !
When you save your change from cash transactions, you're holding on to funds that are supposed to remain in your possession. With Acorns, that change that would have remained in your account is taken out of your account and placed in an investment account. It's usually a small amount, but instead of letting Acorns save 50 cents here and 25 cents there, we recommend being deliberate in your investing. Set a goal to invest $50 a month, or another amount that works in your budget, but do it purposefully rather than by leaving it to rounding.
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Is the transaction successfully done?
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Hi Gold Horn !
Are you referring to the Acorns transactions Jesse mentioned? This podcast was from a few months ago, but you can still listen to it here: YNAB Podcast 386 - Testing Rounding Up.
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