How to make micro-saving turn your money into a big deal

Micro-saving has become a big deal.

It was originally designed so that low income earners were able to make financial progress (generally, saving in increments of less than a dollar) without dipping into living expenses, or taking out expensive credit.

Today, micro-saving options are easy to find and set up, often come with no fees or restrictions and technology so seamless you don't notice it's happening at all.

That's a lot of upside.

When it hit Australia a few years ago, we were totally inspired by the potential of micro-saving - the same themes drive a lot of what we do at Blossom.

Firstly, the 'little and often' approach means you can take action right now, without much disruption to your usual habits.

It also meant an advantage that was held by a privileged few (ie, the ability to save easily, and regularly) became accessible to everyone, regardless of income or financial situation. That's definitely our thing.

There are a few ways to get started with micro-saving, and a range of different apps, (do some digging, and check out Trust Pilot) but functionality basically comes down to:

Here, purchases made using your bank account (eg $4.50 for your coffee) are rounded up to the nearest tenth of a cent or dollar (eg 50c, bringing the total transaction to $5) and the difference is transferred to your app.

This is similar to a traditional direct debit, but you can set many savings goals, and have small amounts go out as frequently as you like.

Contributions can also be event based, for example every time money comes in (like getting paid), you put aside 1% of that amount. A bit for them, a bit for you

Think of this one like tipping, except you tip your savings account every time you make a transaction.

Many apps will help work out how much you can easily manage by analysing your historical spending.

Micro-investing products and apps often offer the same functionality and features as micro-saving options, but the aim is to make it more rewarding by investing your money and offering a potential financial return .

As we mentioned last week, it just depends on your targets, timelines and risk profile as to where you put your funds to grow.

The benefit of micro-saving and micro-investing is that the money can quickly add up - so like any other saving or investment strategy, do your research.

It may seem like small change in the beginning, but act like you're a big deal, and pretty soon you could be.

READ MORE:

Sisters Ali & Gaby Rosenberg are the co-founders of Blossom App.