Lazy Man and Money

Dobot to Start Charging Fees

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For a couple of years now, I’ve been using some stealth services to squirrel away savings without me noticing. They were free, backed by fairly reputable companies and FDIC insured, so I figured I had little to lose. I started with Digit.co and really liked how after a 3-minute set-up, I had a system set up to save a few thousand dollars a year.

Then Digit started to charge fees for the service and I had to move on.

Before Digit started to charge fees, Dobot contacted me and essentially said, “We’re like Digit, but we’ll help you save towards one or more goals.” I’m really looking to get this 65″ OLED TV from LG (yes, I’m a bit obsessed) so I set that up as one of my goals.

I’m about 50% of the way to my goal of $2500 saved (Amazon doesn’t seem very competitive in this case. That’s a story for another day.) When I moved on from Digit, I created a goal in Dobot with the name “emergency fund” to replicate what I had with Digit.

Unfortunately Dobot is charging fees, so I’m going to have to kick it to the curb too.

Part of their email that I got on July 19th is as follows:

“It is vital that we are able to continue providing the services you’ve come to trust, so today we are sharing important news about our relationship with our Dobot savers and how we make money. Dobot will begin charging a small monthly fee for the services we provide. The fee, $1.99, will begin on July 31st for all accounts created before July 1st. For new users of Dobot, there will be a 30-day trial period.”

They aren’t giving a lot of people time to get out. In looking at the Dobot app, there isn’t an obvious way to close your account either. I did a quick Google search and it seems like contacting them and asking is how they recommend canceling. I hope they have a large staff of people dealing with their email.

It’s not that $2/month is a big deal. It’s less than $25 a year. However, I don’t see the value of that $25. I could set up my bank account to transfer $100 on the 5th, 15th, and 25th of every month to a saving account for free. People have been doing things like this for years and years. It seems to me that banks should offer a Digit/Dobot service for free. Maybe some day they will.

I’m looking into one more of these services that some friends of mine have been talking about. I don’t want to say who it is or give any kind of recommendation until I know how it works and can properly review it.

Dobot: Automated Saving for Goals

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Every year, I get thousands of marketing pitches in my inbox. I often find that there are fewer than 10 are worth my time to readers. It almost makes me want to shutdown my email completely.

Today, I’m bringing you one of those 10 pitches that makes it all seem worth it: Dobot (pronounced: “dough bot”, get it?)

What is Dobot?

Dobot is a FREE financial application that squirrels away small amounts of money from your bank account into a separate saving place. The idea is that you won’t notice the money being taken out and that you won’t spend money that isn’t there. Sounds like a great unique idea…

… wait? You’ve heard this before?

Yes, that’s essentially the same description of Digit, which I’ve been recommending for the last 18 months. Just two weeks ago, I wrote about how one can use Digit in the same way to save for the holidays now.

If Dobot were an exact copycat, I wouldn’t be writing this article. We already have a 5-letter savings account squirreller that begins with “D.”

So what makes Dobot different than Digit?

Let’s review briefly what Digit is. Digit allows people to save money into one pool. It continuously saves money, a little each day. I’ve been using it for building a general emergency fund. I have had enough emergencies (new car brakes immediately come to mind) that keep it from growing too far out of control.

Dobot helps people to save with the idea of a specific goal in mind. You can have multiple goals and hence pools. You enter a goal, how much it costs, and when you’d like to reach it. Here’s a 90-second video overview:

Getting Started With Dobot in Less than 5 Minutes

Earlier today, I signed up for Dobot to get an idea of how it works in practice. It took one click from the Dobot website to get the Android app (there’s an Apple one too) installed on my phone. When I ran the application, I simply created an account by adding my my email address, my phone number, and a password. I then choose my financial institution, logged in, and picked my bank account. (Let’s put the question of security aside. We’ll get back to it in a bit.)

I’ve written before that I’ve been saving money for this very extremely expensive television.

I created a simple goal, “OLED 65”, “November 2017”, “$2500.” The most difficult part was trying to figure out what the cost of the television will be when I think it is a good value to buy. I’m not sure if the good value is $2500 as I like to find a rare bargain. I think that there might be a Black Friday deal next year with that rare bargain.

Here’s Dobot’s example of how a typical goal might look:

Dobot helps you save money

While I just signed up, my understanding is that each week some money is put aside towards the goal. Since my goal is about 55 weeks away, I imagine that it will save around $45 a week, which would give me around $2500 by my target date.

Dobot allows you to add a picture for motivation. Unfortunately, it wouldn’t let me bring in pictures from Pinterest or Amazon. I had to already have them on my phone. So I took a picture of my current Wal-Mart brand budget television that I want to upgrade from.

Dobot is a very visual application, which is very different than Digit which works best by text message.

In the coming days I will look to add some minor and major upgrades around the house.

I see Dobot as a great budgeting tool. Some banks allow you to create sub-accounts for the same kinds of savings goals. Unfortunately, USAA required me to create a separate savings account for my OLED TV. It wasn’t a huge pain for one thing, but I certainly wouldn’t want to manage 20 accounts via USAA’s website.

The downside of all this is that you aren’t going to earn interest. Some people may be upset with that. I see it as a non-issue given today’s extremely low interest rates. If I was getting 3-4% in my savings account, it would be a different conversation.

Is Dobot Secure?

Dobot is FDIC insured which is always something to look for. They say that they use bank-level security. That’s not overly convincing in and of itself. However, I know that these applications typically use the same bank-end banking engine like Yodlee. So many applications use this that the real risk is probably at Yodlee. I’ve been using these types of applications since 2006 and I’ve never heard of a hack. It might be more likely that your bank gets hacked.

Get (a little) Free Money

If you sign up from this link on the Dobot website, install the app, and add a bank account, they’ll fund it with $5. It isn’t a ton of money, but what did you expect in spending a few minutes to sign up for a free helpful, budgeting service?

I’m not sure that you need both. Some people don’t even need one. However, I can see why people would use each of them. I’ll continue to use both, because I love to automate my money. Over the years, I’ve learned that the more forced savings I have, the more my net worth increases.

Reminder: Use Dobot to Save for the Holidays Now!

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Editor’s Note: This article was originally written about Digit, but they charge a monthly fee now. I suggest you use Dobot which works almost the exact same way, but without the fees. You can read my Dobot review here.

A few days ago, I was in the car with my wife picking up the kids and this song came on the radio. I turned to here and said, “I guess it’s time to wake up.” Fortunately, she got the joke right away.

October hits me in the back of the head like this song. Metaphorically, of course, because I’m still typing this article. It’s the start of the last quarter of the year. Everyone is in a rush to put up Halloween decorations, while I get advertisements from my local grocery store to plan my Thanksgiving through them. I bet some of the warehouse stores already have rolled out some of the Christmas stuff.

In other words, this song is going to happen soon. And if you celebrate another holiday that might be around the same time.

(I promise that this article won’t have reference any more song titles… or maybe not.)

Years ago, before credit cards, people turned to Christmas Clubs to save money for the gift-giving season. If you aren’t familiar with Christmas Clubs, I won’t hold it against you… they were before my time too. Here’s how Wikipedia describes them:

“The Christmas club is a savings program that was first offered by various banks in the United States during the Great Depression. The concept is that bank customers deposit a set amount of money each week into a special savings account, and receive the money back at the end of the year for Christmas shopping.”

I don’t know how much money you are you going to spend this Christmas, but the average is around $900. You could spend more or less, but can’t we agree that it’s best to put aside money now?

I’ve found that easiest way to do this is with a Digit Dobot account. Regular readers know that I recommend EVERYONE get a Digit Dobot account. I even recommend personal finance bloggers get it. One said to me, “I save money all the time and I’m great with it. I don’t need that.” He ended up following my advice and saved around $4000 for an expensive international trip. He said he didn’t even notice that the money was being saved.

What is Digit?

Digit was a FREE service (it isn’t anymore) that squirrels away money from a savings or checking account. It analyzes your account balance, spending, upcoming income, and upcoming bills to figure out how much it can safely move to the Digit account. It does a little at a time so you don’t even notice it. You can always tell it to squirrel less, but I set it at the maximum squirrel rate. (If you think I’m trying to set the record for using squirrel as a verb in a paragraph you are correct.)

Digit accounts are bank backed, safe, FDIC insured, blah, blah, blah. It’s got Google Ventures and other big names as investors.

Perhaps the worst part of Digit is that it will take you 3-5 minutes of your day to set-up. I’m being sarcastic. The worst part is that you earn minimal interest on your money. There aren’t a lot of banks paying significant interest nowadays. I’m used to ignoring interest after years and years of receiving almost none from bank accounts.

I’ve had my Digit account since March or April of 2015 and I’ve only saved this much:

Digit Stats

I should have waited until I got that “snowman” for the first digit, right? Oh well.

Keep in mind that I’m saving the maximum amount and my finances might are different than yours. You can customize it to save what works for you. That’s why I feel it will work for everyone. No one has given me a convincing argument NOT to sign up for a Digit account other than, “I’m comfortable with my savings process.” That’s fine, but I’d challenge the person to try something new. They might just find out it was better than their existing way of doing things. I did.

I also have withdrawn money from my Digit account. My car needed new brakes, so I simply sent off a text to withdraw the money and it was back in my account in a day or two. If I hadn’t set up Digit, there’s a real chance that I would have spent it.

Forced savings is one of the most powerful forces in personal finance.

My recommendation is to Digit Dobot now so you’ll be prepared for the holidays.