How to Save Money Using Fintech Tools

What is fintech: a brief overview

First, it’s important to know exactly what we’re talking about when we say “fintech.” The term “fintech” is short for “financial technology,” and it broadly encompasses any technological tool that can be used to save, manage, or invest money. These tools can include mobile banking apps, robo-advisors, AI budgeting assistants, and much more. Fintech tools remove or replace traditional intermediaries like banks or financial planners in order to improve or automate the services they provide. The best part about fintech tools is that many are completely free or low-cost, making what were once elite services widely available and easy-to-use for everyone. When it comes to saving money, using fintech apps can help you save money by optimizing your spending habits, cutting fees, and increasing financial transparency.

Budgeting apps: track your spending and start saving

One of the most basic and well-established areas of fintech is personal budgeting. While sticking to a budget may seem intimidating or boring to some people, using a modern budgeting app can make the process more insightful, efficient, and even a little fun. Most budgeting apps allow you to sync with your bank accounts and either automatically categorize your spending or manually tag transactions based on where you spent your money. Some apps like YNAB also use AI to make spending predictions and offer customized insights into your financial habits. While you can create a paper budget on your own, using a fintech budgeting app can help you set and reach financial goals, visualize your monthly spending, and re-allocate funds to boost savings.

Automatic savings apps: save on autopilot

Automatic savings tools may be the ultimate form of “lazy saving.” As the name implies, these apps allow you to automatically move money from checking to savings or another goal-based account without any effort or thought. Many apps like Qapital and Digit will round up your purchases or take a set amount of money from your checking account at a frequency you choose (daily, weekly, or monthly). Other apps may use more complex AI algorithms to determine how much money you can afford to save each week without missing a bill payment or grocery run. While savings apps require discipline to set up, once you do so you can let the technology do the rest and watch your account balance grow over time.

Round-up tools: use spare change to your advantage

Small savings add up over time, and nothing is as small as spare change. Round-up tools use this principle to its fullest by rounding up every transaction to the nearest dollar and then saving or investing the difference. A classic example is the popular fintech app Acorns, which automatically invests your spare change in an investment portfolio of your choice. If you buy lunch for $8.50, Acorns rounds up to $9.00 and invests $0.50 in the market. Over time, these micro-investments can really add up into real savings without any conscious effort on the part of the user.

High-yield digital savings accounts

Saving money is a great start, but what good is a savings account if your money barely grows over time? Traditional savings accounts offer near-zero annual percentage yields (APY), meaning your money will only grow by a few pennies every year. However, fintech has given rise to several high-yield digital savings accounts with more competitive interest rates. These accounts, offered by fintech banks like Ally, Marcus by Goldman Sachs, and Varo, allow you to save without fees and even gain modest interest on your deposits. The higher the APY on your savings account, the more money you earn back from the bank, and the more you can save over time.

Expense trackers and bill negotiators

Filling out expenses and keeping track of monthly bills can be tedious, and it’s easy to miss recurring subscriptions or hidden fees when you pay by check or on your phone. Bill negotiating tools and trackers like Truebill (now Rocket Money) and Trim can help cut through the clutter by streamlining your billing, watching your accounts for changes, and negotiating better terms on your behalf. These tools can automatically identify and cancel unwanted subscriptions, negotiate lower rates for recurring expenses, and even alert you when a bill goes up so that you never pay more than you need to.

Cashback and rewards apps

Spending money doesn’t have to mean losing money. Cashback apps like Rakuten, Honey, Ibotta, and Dosh allow users to receive rewards or rebates for purchases made at participating retailers. These apps work by scanning product barcodes or offering in-app coupons at the point of purchase, and many deposit cashback into the user’s linked bank account over time. The savings from each purchase may seem small, but they can add up to hundreds of dollars over the course of a year. Some fintech credit cards also integrate cashback tracking in order to maximize rewards on everyday purchases with no annual fees.

Digital-only banks and neobanks

Digital-only banks and neobanks are online-only financial institutions with no brick-and-mortar locations, which lets them avoid many of the overhead costs of traditional banks. Many of these fintech banks like Chime, Varo, and Current offer features that would be considered luxuries at a traditional bank, such as early direct deposit, zero-fee accounts, savings round-ups, and built-in budgeting tools. Digital banks and neobanks can be great ways to use fintech for savings by cutting down on unnecessary banking fees and better controlling your financial situation with user-friendly tools.

Goal-based saving features

Goal-based savings features or labels let you create and visualize multiple saving goals at a time within the same account or app. This can help enforce a more structured budget, as you can allocate funds to different goals instead of spending them immediately. Some apps like Simple (now part of BBVA) and Acorns label multiple “buckets” or “goals” where you can see how much you’ve saved, how much more you need, and more. Some apps like Qapital even let you automate certain transfers towards specific goals, like “buying a house” or “saving for a vacation.” The goal of goal-based savings features is to encourage more thoughtful, purposeful saving, rather than impulse spending.

Peer-to-peer and micro-investing

Saving money is all well and good, but if you really want to get the most out of your money, you need to know how to grow it too. Peer-to-peer (P2P) lending and micro-investing platforms like LendingClub and Stash are two of the biggest ways to invest and potentially turn a profit (albeit a small one) using fintech solutions. Investing doesn’t have to be limited to Wall Street either. Micro-investing apps allow users to begin investing with as little money as they want, and then let the magic of compound interest do its thing. P2P and micro-investing are especially great for people who are testing the waters of investing and don’t want to risk putting in large amounts of capital from the get-go.

Alerts and notifications

Most fintech solutions also have a notification or alerts feature that can help you stay one step ahead of your spending. Setting up an alert system can protect you from overdraft fees, missed bill payments, and sudden changes in your financial situation that would otherwise go unnoticed. You can usually set up customized alerts that let you know when you reach a low balance, when an account is accessed, or when a bill is due. Alerts can even be tied to spending thresholds for restaurants, bars, or rideshare apps. Alerts and notifications for fintech apps allow users to stay on top of their spending, know exactly where they stand, and avoid making expensive mistakes.

Education and literacy tools

Financial technology also extends to educating people about money, from explaining how to manage a budget or invest in the stock market, to making basic financial concepts less intimidating and more approachable. Apps like SoFi and MoneyLion give users free access to financial education articles and videos, along with personalized tips and a credit score dashboard. Other literacy-based fintech solutions focus on community forums and support networks, allowing users to get more insight from peers. While not always directly related to “saving money,” these types of tools do their part by making users more informed, which can in turn lead to better financial decisions.

Conclusion

Financial technology is making a big impact on the world, and it’s about time. With user-friendly interfaces and powerful tools that make saving, investing, and spending easier than ever before, fintech is a boon for anyone looking to take control of their financial life. From basic budgeting and tracking apps to complex savings and investing tools, there is an almost endless number of ways to use technology to your financial advantage. The key is to find the solutions that work best for you and your lifestyle, and integrate them into your everyday routine. Start small, stay consistent, and remember that the right fintech solution can make all the difference.