When it comes to budgeting and saving, many of us are not as diligent as we would like to be. According to a study by MoneyFact, two-thirds of Britons don’t know their bank balance. While, according to StepChange, more than 21 million Britons don’t have a household budget and six million Britons who do have a budget don’t stick to it. Furthermore, the number one money worry in the United Kingdom is a lack of savings.
If you are having trouble budgeting and aren’t putting money aside as regularly as you would like to, there is now a solution. A new service that allows you to automate your savings. This service is called Plum.
What is Plum?
Plum is a smart saving assistant that allows you to effortlessly save money by automatically moving the precise amount each individual can afford each month into a savings account.
How does automated saving with Plum work?
Through the use of an AI-based algorithm, Plum analyses your historic earnings and spending profile. Then, every few days, it dynamically predicts how much you can realistically and safely save until the end of the month and your next paycheck.
So every few days Plum automatically takes these amounts out of your current account and moves them into a savings account under your name. Each time money is put aside for you, you will be notified via text message so that you know exactly how much goes into your savings.
How Plum started
I had to opportunity to speak with Plum co-founder Victor Trokoudes and he told me the story of how the idea of Plum came about.
Victor was working at TransferWise, the international money transfer platform, leading the international expansion of TransferWise to go live in as many new countries as possible. While co-founder Alex Michael was a software engineer at Tictail, the online shopping platform, and had returned to London to do some contracting. Victor and Alex knew each other from before, as they are both Cypriots working in tech in London and “there are only 10 of us”, Victor told me on a Skype call.
“We realised we had a few things in common. We earned similar salaries, we both believe in the power of technology to solve problems and the main thing we had in common was that we had no savings. So we decided to start an experiment to see who could save faster and smarter,” Victor explained to me.
At the end of every month, Victor put aside the money that was left over in his current account. Alex, on the other hand, downloaded his bank transactions and calculated how much he needed until the end of each month. Whatever he didn’t need was automatically transferred every few days into his savings account.
After a few months of this, they compared balances. They found that Alex had saved twice as much as Victor. Even more, Alex didn’t have to change his spending habits or even remember to put the money aside. With less hassle, he’d saved double what Victor saved.
And that’s how Plum started – with the intention to create a fully automated savings tool that allows people to put just the right amount of money aside each month. If you’re based in the UK and want to automate your savings with Plum you can check it out by signing up here.
Furthermore, if you want to learn more about how you can improve your financial situation, download my ebook Everything You Need To Know About Money – The Complete Financial Intelligence Handbook and develop the level of financial intelligence you need to make smarter financial decisions today!