Should I use a bank's roundup offer?

My most straightforward answer: No.

What is a roundup? This feature allows the bank to take the balance of every dollar and put it into savings, for example. If you spend $5.46, the bank will deposit .54¢ into your savings account.

Well, AJ, that sounds like a good idea in theory! Why are you against it?

1. I have found that ALL of my clients who use a roundup type of savings strategy are the biggest abusers of the savings shimmy. The shimmy is when you deposit money into savings and immediately take out that money to pay for lifestyle expenses.

2. Roundups make it hard to account for your spending. If you're trying to budget and portions of your money are "missing" daily because they're moving to savings, your accounting will be off. Trying to understand why your numbers don't match up (your budget vs. your actuals) will make you feel like you're failing at budgeting, but you're simply just making budgeting much more complicated than it needs to be. 

3. Roundups or set-it-and-forget-it methodologies don't hold you accountable and give you a false sense of security. Successfully saving and building wealth is all about asking these essential questions every single month:

a) what am I saving for?

b) what events/travel/purchases are coming up that I need to save for?

c) Do I have enough money from my income to support my lifestyle this month?

You'll fail every time if you're not creating a plan and hoping the "roundup" will protect you. 

Got questions? Shoot us a message on instagram or send us an email at hello@beyondthegreencoaching. 

Want more? The debt and savings bundle is a fantastic place to sort out your savings just in time for summer!