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INTRODUCTION
Want to start investing but don't have a lot of money? When I was young, I started collecting change in a jar and, over time, would be surprised how the change would add up into over $20-30. And now, I can grow that change faster by investing it tools like Acorns. Acorns could be the perfect solution if you've ever wanted to invest but didn’t have enough money or knowledge to get started. This innovative robo-advisor makes investing effortless by automatically rounding up your everyday purchases and investing the spare change. Whether new to investing or looking for a passive way to grow your wealth, Acorns provides a simple and accessible approach. Acorns can let you invest even when you are busy planning a wedding or living life. In this detailed review, I'll walk you through how Acorns works, how to use it effectively, and why I love this platform.
What is Acorns?
Acorns is a robo-advisor designed to make investing easy, automated, and accessible for beginners. Instead of requiring large sums of money to start, Acorns allows you to invest small amounts by rounding up your purchases to the nearest dollar and investing the difference. This way, your change acts as “acorns” that grow and grow as they get invested. This micro-investing strategy helps you steadily grow your wealth that works within your budget.
Beyond just spare change investing, Acorns offers a range of financial products, including retirement accounts, high-yield savings, and cashback rewards, making it a well-rounded financial tool.
How Does Acorns Work?
Acorns takes a hands-off approach to investing. It links to your checking account, monitors transactions, and automatically rounds up purchases to the next dollar, investing the difference in a diversified portfolio. For example, if you buy a coffee for $3.75, Acorns rounds it up to $4.00 and invests the extra $0.25. Over time, these automated small investments add up and help you build wealth effortlessly.
Additionally, Acorns helps you choose a portfolio based on your risk tolerance, making investing more manageable for those unfamiliar with financial markets. It’s a “set-it-and-forget-it” method.
Who Should Consider Acorns?
I heard about Acorns for several years before I started investing with the app. Why did I start investing with Acorns? Not only did it remind me of my childhood habit of collecting change to have more money, but I saw how other people benefited from using Acorns. So, I started using it and noticed that it didn't affect my budget much, and my change has grown to over $1000 over a couple of years just by using Acorns to invest my change! I love Acorns and feel that this app is great for:
- Passive investors. Those who want an easy, hands-off investing experience.
- People struggling to invest. The round-up feature helps you invest without thinking about it.
- For those who feel they don’t have enough money to invest. Acorns makes investing accessible, where you can get started for as little as $3. So if you are stressed about money or want to build wealth while planning a wedding, Acorns has a plan that can fit into your budget.
- Anyone looking to automate their savings and investments. It’s an excellent tool for building the habit of investing and start automating your finances.
- Enjoy cashback rewards. Earn money while shopping and have it invested automatically when you download the Acorns extension for your browser. Plus, you can use other cash back apps like Rakuten to earn more cash back when you sign up for Acorns. If you want to learn more about Rakuten, check out my review here.
- People interested in IRA options. Silver and Gold Acorns plans offer retirement account options that match the money you put in up to a percentage.
- Anyone who wants a simple way to build wealth. Acorns works for all income levels and lifestyles starting at $3/mo.
How to Use Acorns
Getting started with Acorns is simple, and within minutes, you can be on your way to growing your investments. Here’s how:
- You can sign up for free. The registration process is quick and easy. Just click here to go to the Acorns website or mobile app.
- Link your checking account. Acorns will track your spending, round up purchases, and invest your spare change.
- Set up recurring contributions. While round-ups add up over time, setting up a recurring deposit (such as $3 per week or $12 per month) can help you grow your investments faster. Acorns offers three subscription tiers (Bronze, Silver, and Gold) to fit any budget. Click here for the tier options that fits your budget.
- Choose your investments. Based on your risk tolerance, select stocks or diversified index funds. Acorns can help you choose your funds based on your risk tolerance and timeline.
- Let Acorns do the work. Once set up, Acorns automatically invests your round-ups and recurring contributions, requiring minimal effort from you.
- Use the Acorns browser extension. Earn cashback from participating retailers while shopping online. The extra money goes straight into your investments.
- Download the app. Acorns‘ educational blog is a great way to stay informed about your investments and learn more about personal finance. Their articles are easy to read and extremely helpful, especially if you are starting to invest.
- Explore additional features. Acorns offers a banking option with an FDIC-insured high-yield checking account. It also offers children high-yield savings accounts, retirement accounts, and investment options to help secure their financial future.
Why I Like Acorns
Acorns makes investing feel effortless, and here’s why I love using it:
- Easy to sign up and use. The website and mobile app are incredibly user-friendly, making it easy to track your investments. Over a few years, I’ve passively built up over $1,000 just by using round-ups and small recurring contributions.
- It doesn’t cost a lot of money to start. As a kid, I collected change over the year and got excited when I had $25 at the end of the year. With Acorns, this tool “collects” my change for me. Instead of saving it in a piggy bank, my spare change working for me in the stock market without coin rolls or going to the bank!
- Budget-friendly. If you are strapped for cash or planning a big expense like a wedding, Acorns can be a great way to start investing. Since it only rounds up spare change, it doesn’t affect my budget. I use the Silver plan option, which costs less than $10 per month.
- Automated investing. I don’t have to worry about managing investments manually; Acorns does it for me.
- Safe and secure. Acorns is protected by SIPC coverage up and partners with FDIC-insured providers for banking services.
- Retirement options are available. If you want to start saving for retirement, Acorns offers IRAs and SEP IRAs that match Silver and Gold plans.
- Cashback rewards. I love that I can earn cash rewards from my regular shopping and have them invested automatically.
- Teach your kids about money. The Gold plan allows parents to invest on behalf of their children, teaching them about money early on.
Cons of Acorns
While Acorns has a lot of great features, it’s not perfect. Here are a few drawbacks to consider:
- Small investments won’t make you rich overnight. Investing spare change alone isn’t enough to retire comfortably, but it’s a great start.
- Monthly fees can add up. If you only invest a few dollars a month, the $3 fee can feel steep. However, it’s more reasonable to use the Silver and Gold plans.
- Fees for transferring investments. If you want to move your investments to another provider, you may have to pay transfer fees.
- Limited control over investments. Acorns is a robo-advisor, meaning you don’t have much say in specific stocks or funds.
- No tax-loss harvesting. Unlike some other robo-advisors, Acorns doesn’t offer tax-loss harvesting at the time of this writing, which could reduce taxable income.
Is Acorns Worth It?
Absolutely! Investing your spare change is a smart way to make your money work for you. While Acorns won’t replace a complete investment strategy, it’s an excellent starting point for beginners (or anyone) who want to develop good financial habits. Acorns is worth considering if you’re looking for a simple, automated way to grow your investments.
Are you ready to start investing your change with Acorns?
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