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Do I really need a savings app to manage my money?

Technology’s duty is to make life easier. Most savings apps do just that.

Morgan Sliff

Contributing Writer at Tally

September 30, 2019

Money isn’t everything, but it sure is nice to have on hand. A stockade of cash can relieve stress in case of emergencies. It can also help you recharge with exotic vacations or even whisk you into your dream home.

At its core, money is both freedom and opportunity.

But if you’re an average Gen Z-er or a millennial living in most big cities, you may think of things like owning a home as luxuries that are forever out of reach. And if you’re among the majority of Americans (78%, to be exact), saving money presents a serious challenge because you’re living paycheck to paycheck.

No matter your age or income, surprises are never going to stop rearing their expensive heads. And financial goals will always be on the horizon. The point is this: Always have a savings plan.

But the question of saving isn’t the what; it’s the how. Do you really need an app for that?

App stores are teeming with financial software, and savings apps keep springing from the ground like bamboo. But are these pint-sized money machines really worth the effort? Let’s explore savings apps to find out.

What is a money-saving app?

A money-saving app is a smartphone application designed to help you save money regularly without you having to expend too much energy. In most cases, the app can be customized to your needs, whether you’re starting with thousands of dollars or just a few spare bucks.

It’s like developing a healthy habit that requires basically no effort.

Though each savings app has distinct features, they basically work like a game: You create savings or budgeting goals, work to meet these goals and, as you make progress, your savings grow. And as you inch closer to your goal, you get that feel-good response, like leveling-up in a game. Once you complete your first goal, you can create a new one — and the cycle starts over, all in the name of improving your financial well-being.

There’s a lot of cool tech in modern savings apps. Here are a few notable features:


With auto-deposits, you determine how much you want to save and when you want to do it. Then, the app does it for you automatically so you don’t have to worry about it. Once you make the initial decision, there’s no more work to do on your end. It’s like developing a healthy habit that requires basically no effort.

Expense tracking

With expense tracking, you get a piece-by-piece categorization of your spending — and the app does all the work of organizing your purchases. A full look at your spending can provide perspective just how much you spend every month on things like personal care, travel or (way too much) coffee.


When it comes to rewards, there’s a few different approaches. Some apps offer interest earnings on the money you save, usually a small percentage of your total balance. Other apps offer redeemable points, similar to credit card rewards programs. It’s all upside, so the best rewards are the ones you enjoy most.


Micro-investing is a creative and effective way to make use of small amounts of money. Some apps use your spare change (often rounding your purchase up to the nearest dollar) as an investment tool. The money is then invested in your preferred way, such as stocks or bonds. 

A few cents here and there may not sound significant, but it can add up quickly if it’s done for every purchase.

Regardless of which features appeal to you most, the primary purpose of savings apps is managing your money for you. Instead of spending time setting aside money every week or month, the apps structure your savings and often move the money on your behalf.

Is there a drawback to savings apps?

Savings apps can kick you into frugal gear without you having to do much. But in some cases, savings apps can be a drain. If you’re looking into using a savings app, be wary of the following:

Steep monthly fees

Many savings apps come with a price tag. Sometimes, it’s a monthly rate from the start. Other times, there’s a free trial period before the cost kicks in — watch out for that!

If you plan on saving a significant amount of money, the convenience may be worth a few dollars every month in membership fees. Just remember you have options: There are free savings apps out there that offer competitive rewards.

Limited functionality

Setting aside a few dollars every week or month seems simple enough. But if you’re looking for ways to move your money around frequently, you may wind up disappointed. The best way to avoid this type of letdown is to figure out what you need before committing to a new app.

Deposits unavailable for days

Technology makes money movement possible at the click of a button, but there’s still red tape behind the scenes. If you’re transferring money from your bank account to a savings app, it’ll likely take a day or two, due to regulations and the needs of both businesses.

There’s no quick fix for this. The best advice is to set aside money you won’t need for at least a few days. And if you’re dipping into your savings every few days, you may want to rethink your approach to saving money.

Long-term planning suffers

Some finance experts aren’t exactly keen on savings apps. While financial budgeting apps can be found on one-third of millennials’ smartphones, some claim that shortcomings are abound when measuring targets against reality.

The pitfall doesn’t begin at the outset of using the application; it’s long-term planning that suffers. Most budgeting apps tend to focus on the here and now rather than the distant future. 

When it comes to technology, it’s important to be mindful with your money. Experts highly recommend pairing savings apps with one-on-one meetings with a financial advisor to get a more comprehensive blueprint of what saving money for now and later should look like.

What exactly am I saving for anyway?

The average millennial has a net worth of $8,000, according to a recent study from Deloitte. Before you go thinking that’s a nice nest egg, know that this number is a paltry comparison to what preceding generations had tucked away at the same age.

There are a lot of factors playing into curtailed savings amounts. Things like sky-high education costs, higher rents and expensive health care chip away at income and makes storing away for the future hard.

And get this: A middle-class life is now 30% more expensive than it was 20 years ago. Because of all of these factors, it’s more important than ever for everyone to have a savings plan.

If you’re just getting started in the savings sphere, you may not be clear on what exactly it is for which you should be saving. Here are some common savings goals:

  • Emergency fund: Experts recommend 6 months’ worth of living expenses

  • Retirement: 10% to 15% of your income

  • House down payment: 20% of the cost of your ideal home

  • New car: $2,000 per year

  • Travel: Depending on how much you travel, an estimated $2,000 per year.

Another popular way to think about how to allocate your money is the 50/30/20 rule:

  • 50% of your income toward essentials (food, rent, etc.)

  • 30% for discretionary spending (fun stuff)

  • 20% goes into savings

And before you even start saving for anything worthwhile, it's essential that you pay off all of your outstanding debt first, especially high-interest obligations like credit card debt.

Is a savings app right for me?

Technology’s duty is to make life easier for us. That’s what most savings apps are designed to do: give you easy-to-navigate financial software that fits in your pocket.

While it’s easier than ever to press a button on the app store and have a new savings app in seconds, it’s important to do your research, sift through available apps and find what’s right for you. Many apps have features that are useless to some and would otherwise be perfect for someone else.

Most importantly, a savings app can help you if you use it effectively. Continue to track your progress daily and move your momentum in an upward trajectory. The easiest way to find out if it’s right for you is to give it a try. Only then will you be able to tell if a savings app or the old fashioned way works for you.

Lastly, while savings apps can be relatively cheap, a financial advisor may be able to provide more savings insight than an app ever could. If it’s within your means to meet with an advisor, it’d likely be a worthy investment in your future.