Why Saving Money Could Actually Be Hurting Your Personal Finances

Updated: February 12, 2021

For as long as I’m sure any of us can remember, we’ve been told to save, save save. It’s the only way we’re going to be able to achieve any of our financial goals, right?

Here’s the truth: When it comes to growing your wealth, there’s only so much a savings account can do. Most pay an APY of less than 1%, which means your money is growing at a snail’s pace. Plus, with inflation (the enemy to all savings accounts), your money will actually lose value over time.

Investing is the best and really only way to build long-term wealth. It’s really the only way to see a return on your hard-earned money. Whether you choose to invest in stocks, funds, bonds, real estate, a small business, a combination of all of the above, or explore other avenues, the goal is to have your money work for you. Yes, investing is risky, but if you ask any millionaire or billionaire (like Mark Cuban and Ray Dalio) how they built their wealth, I can guarantee you they won’t say with a savings account.

The great thing about investing in 2020 is the new companies that have sprouted up to help novice investors like you and me. Here’s what you need to do to get started.

You want to start investing and be in control of your investments…

These apps are more hands-on for those who want to manage their portfolio themselves. Both still provide educational resources to guide you along the way.


Similar to Robinhood, Stash allows you to pick from 400 stocks, ETFs and bonds to create a portfolio, and with fractional shares, you can start investing with whatever amount you feel comfortable with. The app’s “Auto-Stash” feature, which you opt into, offers a variety of automatic savings and investing tools to help you stay on top of your various financial goals.

  • Set Schedule Link your bank account and set recurring money transfers to your Stash account.
  • Round-Ups – Link a debit card and any time you make a purchase with it, Stash will round up your transaction to the nearest dollar and transfer the difference to your investment account.
  • Smart Stash – Designed to help you save your spare cash, this feature studies your spending and earning patterns to find small amounts of money you can afford to save. You can set a maximum transfer amount of $5, $10, or $25. This money will be added to your Stash cash balance — money in your account that is not currently invested — for safekeeping.

Though Stash leaves all of the decision making up to its users, it’s comprehensive educational features supports users at every stage of their investing journey, helping to take them from beginner to expert. It offers explainer articles, learning guides, fun quizzes, a money lifestyle blog, finance news, a personal finance podcast and Stash Coach, a personalized financial coaching tool and so much more.

What It Costs: Stash has three subscription plans — Beginner, Growth and Stash+, which cost $1, $3 and $9 per month respectively. 

What We Like About It: Stash provides a constantly evolving educational database that offers a ton of thoughtful and fun ways for new investors to learn and experienced investors to stay informed. You can start investing with as little as $5 with fractional shares. Stash organizes its ETFs by themes, giving them names and categorizing them based on industry and company mission statements. This helps investors make decisions about their investments based on their own values and principals.

What We Don’t Like About It: Though Stash offers general low monthly fees for its plans, if you have a small balance, those fees can cost a good percentage of it.

Sign up for Stash


With Robinhood, you can customize your portfolio yourself, choosing from thousands of stocks and funds options. Since it works with fractional shares, you can start investing with as little or as much money as you want (there’s no account minimum). The app provides you with all the tools you need to manage your portfolio yourself and you can set up news alerts and notifications (as many or as little as you like) to help you stay on top of your investments. 

What It Costs: The app offers commission-free trading for stocks, funds and options, and with Robinhood Crypto, you can buy and sell cryptocurrencies like Bitcoin, Ethereum and Dogecoin, and others commission-free too.

What We Like About It: Commission-free trading is a huge perk. It also offers cryptocurrency investing, which is pretty cool.

What We Don’t Like About It: Robinhood is geared towards more advanced investors, offering a limited amount of educational resources in comparison to other investing platforms on this list.

Start investing with Robinhood

You want to invest in something besides the stock market…

There is more out there worth investing in than just the stock market. In fact, experts say investors should diversify their portfolios to balance out the volatility and high risk that comes with investing in stocks and funds. Here are two alternatives to consider.


If you’re a lover of fine art, you’ll be happy to know that with the blue-chip art investing platform Masterworks, you can now own a piece and share in the profits of some of the most famous pieces in art history. I’m talking Picassos, Monets, and Warhols. According to Artprice, blue-chip art has outperformed the S&P (an index of the 500 biggest companies on the stock exchange) by 180% since 2000.

Masterworks curates a wide selection of paintings from top-performing artists that its members can buy a share in for just $1,000. The company chooses the works it displays in its gallery based on millions of auction records, taking these four things into consideration:

  • An artist’s global collector base
  • An artist’s appreciation rate
  • Demand for an artist’s work
  • Level of risk associated with an individual artist’s market

Paintings are held in the Masterworks gallery (ideally for three to five years so they can appreciate) until they are sold to a private collector. When that happens you get your share of the proceeds. Then you can do it all again.

What We Like About It: That you can invest in and be the partial owner to multi-million dollar, historical works of art at insanely low prices, of course! Masterworks is also pretty transparent about its business practices and the realities of this very new market, which we appreciate. 

What We Don’t Like About It: Though the blue-chip art market has been proven to perform well, it’s still important to remember that art is subjective, so it’s hard to say for sure which artist’s work will appreciate or depreciate over time.

Invest in art with Masterworks

If you want someone to manage your investments for you…

If you have little to no investing experience, only a little bit of money to start with and would like to have expert guidance (at a price you won’t lose sleep over) to back you up as you go along, then a robo-advisor is probably the best fit. They use technology to help you manage your portfolio (don’t worry, real humans are still involved, too). Two to know are Betterment and Acorns.


Acorns specializes in micro-investing, making it perfect for anyone looking to invest on a budget. Instead of making a lump sum deposit into your Acorns account to start investing immediately, you can save up money over time from your everyday purchases using the app’s Round-Ups feature until you have enough to start — just $5. Here’s exactly how Round-Ups work:

  • Link a debit or credit card to the Acorns app and turn on the app’s Round-Ups feature.
  • Acorns will automatically round up transactions made with the linked card to the nearest dollar and deposit the difference in your Acorns account. You can also opt-in for the Acorns multiplier feature and can multiply your round-ups by 2x, 3x, or 10x to boost your contributions without setting up automatic deposits.
  • When you have $5, the app will start investing your money fractional shares (less than whole shares, making them cheaper to buy) and it will continue to do this every time you save $5 from Round-Ups. 

Acorns creates portfolios for its users after getting information from them about their financial situations and goals. From there, users will get a recommendation of a mix of Exchange Traded Funds (ETFs) for their portfolio. Acorns also offers automatic rebalancing to keep portfolios in line with each user’s investing goals.

What It Costs: Acorns costs anywhere between $1 to $3 a month depending on the plan you choose.

What We Like About It: Acorns’ technology was developed with the help of Nobel Prize-winning economist, Dr. Harry Markowitz — that’s pretty cool! It simplifies the investing process by doing the heavy lifting for you. The app is 100% free to college students and there is no minimum investment amount required.

What We Don’t Like About It: While Acorns’ Round-Ups feature is great for investing on a budget, if you’re only investing a small amount of money every month via your spare change, then the fees, as low as they are, can end up costing a good percentage of what you have in you account balance anyway. That’s why we also recommend setting up automatic deposits to boost your earning potential and to help you outpace the fees. 

Download Acorns today


To get started with Betterment, you need to answer three important questions first:

  1. What are you saving for (you can have more than one savings goal)? 
  2. How much are you looking to save?
  3. When will you need the money by?

Betterment will take that information and use it to create a personalized and globally diversified portfolio with a risk level and asset mix of Exchange Traded Funds (ETFs) (which you can adjust) that suits your goals. It will also use that information to calculate how much you should initially deposit (however, there’s no account minimum) and what your continued contributions should be (you can set up auto-deposits).

With Betterment, you’ll get automatic portfolio rebalancing to maintain your desired risk level, when your investments produce dividends they’ll be reinvested to avoid cash drag, and it will always use tax-saving strategies to manage your assets. You’ll be kept up-to-date on the progress of your portfolio and will be notified anytime a trade is completed in your Betterment account.

What It Costs: For its digital account, Betterment charges a 0.25% annual fee on your account balance or about $25 per year for every $10,000 invested. Betterment’s premium account charges an annual fee of 0.40% or $40 per year for every $100,000 invested.

What We Like About It: Betterment does all the work for you and there’s no account minimum, making it great for young and new investors. It uses tax loss harvesting to help maximize your returns and reduce your taxable income. 

What We Don’t Like About It: Betterment only invests in ETFs, which is a bit limiting.

Invest with Betterment

Feature Image: Twenty20