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Trying to save money? How about using the robot banker
Here at Personal Debt Solutions, we talk a lot about saving money, how to do it and places where you could save your money, but for some people saving money really is difficult. Whether it is because you have limited funds or you just can’t get yourself organised to save, there are people who just struggle with saving money.
This is where the makers of Chip, a money saving robot banker app, feel like they can help you. The app is there to pull you out of your overdraft and get you saving money with minimal effort from yourself. All you need to do is set up the app and Chip does the rest for you.
The start-up which is in its first year has become extremely popular with many millennials as a way of saving when wages are low and prices are rising. Simply set up an account, sync it to your bank account and Chip analyses your day-to-day spending. It will then move money you are not using from your current account into a savings account helping you to save and hit financial stability.
To budget and save money, you generally need to spend less or earn more but Chip focuses on the money already available and how to spend it in a smarter way. The app looks at your bank account and when it is in a good place financially that is when small, manageable amounts will be moved into a savings account. These small, regular amounts should help build solid savings without you noticing a difference in the amount of money you have available to you.
Chip’s chief executive and co-founder, Simon Rabin, spoke about the company’s focus and purpose; “Younger people find it notoriously difficult to focus their spending on the things they care about… But if you exported your bank statements and went through it, you’d see you’re not focusing your spending on those things, and you’ll probably focus it more towards stuff you wish you weren’t.”
However critics have raised issues such as the end of the month struggle, will Chip actually help people to spend less and save more at this time of month? Or will people still carry on spending, entering their overdraft and then using their Chip savings account to get them out?
For this sort of app to be truly successful, you will need to be earning enough to pay bills and have a decent amount left to live on, it will be this disposable income that Chip can redistribute to save you from spending on what you don’t need and start building up a savings account for you.
However, for those that struggle once the bills have been paid, Chip may not work as there will be little to save and debt avoidance/management is likely to be more important than saving money. In this situation, looking for an extra income source or taking debt advice would be much more beneficial.
The premise of Chip is a good one and their dream of destroying the overdraft is admirable but it will be difficult to achieve, particularly in a time of rising personal debt levels across the UK. An app such as this is likely to have knock on effects and see more sophisticated technology reach the market to help people banish their bad spending habits and create a nest egg for themselves and their families.
So while Chip may be worth a try for many people to stop them spending money on the things they don’t necessarily need, we would still recommend putting together a budget, cutting back on spending, paying down debts and looking for an extra income source if money is particularly tight.
If you are experiencing debt problems, then get in touch with us as soon as possible and our friendly professional advisers can talk through debt management options with you to help you improve or deal with your current financial situation.