Acorns is an app that brings a new method of investing spare change to people’s fingertips.
Connected to a user’s debit or credit card, the app gives the option to round up to the next dollar the spare change from purchases, which is then invested in a personalized stock portfolio once the rounded-up change reaches $5 increments.
“Any time you invest money you’re going to pay someone to invest that money,” Director of Student Financial Services Judy Cuellar said. “There are several different companies that are trying to get investors. But this seems the most innovated and least expensive, and more possible for a student to try and put their toes in the water.”
According to the Acorns website, the app is free for students with an email address from a university, otherwise there is a $1 fee per month for accounts under $5,000. For accounts with more than $5,000, a .25% per year fee is applied.
The data from the app, which would include personal banking details, is not stored onto a user’s cell phone, but uses bank level security and data encryption to secure it at a server level, according to Acorns.
Cuellar said Acorns targeting a younger demographic could be beneficial to all parties.
“As far as just getting started into investing, it’s not a bad idea for students,” Cuellar said. “When you’re just getting started and you’re a student and under 24 years old, it’s free. This is an excellent way to get started if you’re interested in investing.”
Because Acorns relies on small money investments, it gives people the chance to invest just a little of their money, according to Cuellar.
“Most companies require you have a large amount of money to begin investing and this opportunity allows you to start with just a little and watch it grow,” Cuellar said.” So it’s a good opportunity for even just putting a little bit of money aside and see what happens.”
Junior Illa Bennett said because not all college students have a lot of money, this method of investment could help them get started.
“Once after college they actually make money and do things to get stuff they want, then they could invest more money into it,” Bennett said.
Sophomore Dylan Marsh said he uses his spare change for paying for gas, therefore would not be interested in Acorns, but he said he thinks it’s an interesting concept.
“I’d tell people about it,” Marsh said. “I wouldn’t say I’d recommend it, but it’s a good thing to have in mind.”
Cuellar said she currently uses the 10-10-80 rule for spending money, in which she gives 10 percent, saves another 10 percent and spends the remaining 80 percent.
“This [app] could be part of that 10 percent,” Cuellar said. “Putting that extra percentage away so that when it does come time for you to get out of school, you have a little bit of money to invest in the car that you might need, or if you’re ready to buy a house or something like that. It’s important to put that money aside or even reduce debt later on — if you had to borrow student loans in school.”
According to Cuellar, when people invest at a young age, more money ends up in the market to increase and return. The return in exchange uses funds to help the investor build their own life and assets in the future.
“Building assets means you get to do more with your life and others as well and you can help more people with things,” Cuellar said. “You have more funds to work with, you have more to give when the time comes and people need your help.”
There are also a few similarities between Acorn and Oklahoma Christian University’s loan program, SALT.
“I think it works kind of along with what we want to do with SALT, and that is to help students be more aware of debt and how it affects their lives, reducing it quickly, to be careful with their money and not waste it,” Cuellar said.
While SALT and Acorns are somewhat similar, they are different in how they invest money.
“With Acorns you’re investing it and SALT wants you to do something good with your money,” Cuellar said. “Knowing what you owe, knowing how to repay it and how to use your money wisely.”
SALT is fully developed to help pay off student debt. Acorns is used for investment, but could also do the same.
According to Cuellar, saving money can also be used to help those who need it more.
“We find ourselves in situations were we need everything we’ve got just to survive in this world and to take care of things,” Cuellar said. “It’s not at all unusual to see somebody in need and not be able to help because we need that ourselves. But if you’re putting money away and preparing for helping yourself along the way, you can use a little bit of funds to help other people.”
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