Digit: The Savings App Freeing People From Finance One Text at a Time

Digit is a cutting edge service that makes saving painless and easy by automatically scouring your bank account for money you don’t need, and then hiding it out of sight from your ravenous debit card.

As Digit CEO Ethan Bloch laid plain to us, our motto is “Can we free people from finance?”

If this is an app, why can’t I find it in the app store??

We need to fess up, we lied to you this week…kinda. Digit is part of a new school in Silicon Valley called “apps without interfaces.”

In plain talk, this simply means that Digit provides the services typically associated with an app, but does so only via text message or, if you’re an old soul, via their website.

Digit makes saving so easy, it doesn’t even need an app. Here’s how Bloch tells it:

“The value prop is that what Digit does it does in the background of your life, it doesn’t need a huge interface. Texting makes it personal and approachable for a category of product that is usually none of those things. I think people really like it because it’s unusual and doesn’t require much work. It’s all secondary to saving successfully.”

New school or not, we’re talking savings. Why do you think I’d care?

You care because, as much as you try to pretend otherwise, you’re secretly terrified that your savings account consists of a dime, two pennies and a lint-covered gum wrapper.

And, if you’re like almost every other Gen Y all-star out there, you probably have no idea how to get the ball rolling. Bloch sympathizes with you and Digit is here to help.

“I brought back this thesis from my early 20s that the tool sets around us haven’t taken into account the world around us now,” said Bloch.

“They’re the same tools people were using 500 years ago. If you went into a cashier’s office in Amsterdam in 1500, they would cut to a huge ledger and show a transactions sheet. You open a cutting edge mobile app and it’s the same thing.

“But everyone now has to deal with finance, not just merchants like back then. Everyone, rich and poor, has to deal with finance but the tools haven’t evolved to get us there.”

Dude, I can’t even spell saving, is this thing going to melt my brain?

Unless sending and receiving text messages is going to cause a mental overload, you should be fine. Bloch’s whole philosophy is to utilize technology to create a simple, largely automated way for dummies like you and I to effectively manage their money.

“If someone is not analytical or good at math why would we expect them to be great at finance? And why is that mandatory to leading a good life?” Bloch posed.

“Life is hard and stressful and people don’t have more mental resources to follow up on paying bills and moving money after a full day at work. I think technology can do a lot of that for us. This levels the playing field when it comes to finance and it does it across socio-economic levels.”

I have parents. The last thing I need is another person judging my bar tab.

Have to agree with you there. Who would want to sign up for an automated reminder of how reckless you are with your hard-earned cash?

No one, and Bloch knows it.

“The key to Digit is that it doesn’t pass judgment on your finance, no one wants that. Wed’ let our mothers do that if we wanted,” Bloch said laughing.

Digit’s decision-making process is boiled down into four steps:

What’s in the checking account and how does this compare to the average?

Do you have any cash, regular or irregular income, coming in soon?

Are you planning any big purchases/expenditures in the near future?

What have your spending habits looked like lately?

“People feel the savings but its small enough blended in with spending habits that you’re able to reason it,” Bloch said.

Oh, and Digit is so confident in its methods that in the very small event that it overdrafts from your account, Digit will pick up the fee, guaranteed.

I just Googled this thing, it says Digit is the one who keeps the interest on the savings. You trying to swindle me?

This is true and an important item to note. Digit will move away your “savable” money into an account that prevents you from spending it, but Digit’s service fee is essentially the interest on that money.

While this instinctively feels wrong, the truth is that there actually isn’t much impact.

“Let’s say an average Digit user saves about $2,000 for a year. Then you’d give up around 20 cents in interest, or a little less than that over the course of the year on interest today,” Bloch pointed out to Business Insider.

Truth of the matter is that this shows just how futile it is to keep your cash in a savings account, as opposed to repurposing it to actively earn cash on the market.

Advice? Save with Digit, then invest it somewhere.

If you waste my time, there’s going to be consequences.

Digit is definitely worth checking out. The service essentially helps you painlessly and efficiently save money, which is scarily more than most Gen Yers can claim.