Acorns App Review – Investing Spare Change With Ease

DISCLAIMER: This is not a paid review – I just love this app.

Acorns is a neat investment-based application that allows users to save whilst they spend. The application is super easy to use with an extremely user-friendly design that I believe will be a game-changer in the way the next generation budget. The major attraction of Acorns is that it ‘Rounds up’ transactions on an account of the users’ choice to any amount of their choosing up to $1 and invests the difference in one of six investment portfolios that have been designed with the help of Nobel prize winner Dr. Harry Markowitz. Acorns also gives users the option of setting up regular investments at a custom frequency or they can simply transfer lump sums across into their investment portfolio if they find that there is a little extra cash lying around before the next pay day.

As a final little cherry on top, Acorns has begun to integrate cashflow tracking software with the ability to forecast spending over the next month. The AI behind the estimated spending is a little weak at the moment but the app is moving in the right trajectory to give you a complete 360 view on your spending habits whilst providing you with a platform to get a better return on your money.

Let’s go into a little more detail about why this app should be on the front page of your phone screen.


A huge factor for people engaging with an application like Acorns is the security, and in this case the concerns are on two fronts. Firstly, am I making my own personal account less secure by logging in through Acorns and giving them access to my transaction history and creating the functionality to deposit money with the click of a button, and secondly how safe is the company holding the money itself?

Fortunately, Acorns have taken security concerns extremely seriously and have partnered with a company called Yodlee to scrape the data of your financial transactions. Whilst it is yet another third-party company that is now involved in the process, it’s the same company that works with ANZ to assist them with their MoneyManager application. Yodlee has been around since 1999 and has been utilised by many big players in the fin-tech space during that time and has a great reputation in that space.

In terms of your money being at risk, accounts are insured up to the value of $500,000 and if any of you have an Acorns account larger than that you definitely should not be listening to me. The money that you invest is also not held directly by Acorns but in a Trust on your behalf by Australian Executor Trustees Limited which is a member of IOOF Holdings Group. In layman’s terms, it means if Acorns goes bust and ceases to exist your money is still safe as it’s being housed by another company.

As far as a company can go in eliminating cyber risk, Acorns has done a great job in protecting their users.


As I mentioned in the introduction Acorns gives users the option of investing money in 6 different diversified portfolios. In short, the portfolios designed with the assistance of Dr. Harry Markowitz, who is the father of the Modern Portfolio Theory, are centred around achieving the best returns with the least amount of risk in a portfolio.

The different portfolios are all based on a trade-off on ‘risk’ vs ‘reward’ meaning that if users are super conservative and have previously been put off investing their money because they’d hate the thought of seeing their money go backwards too far, there’s a portfolio that suits their needs. Conversely if users are happy to deal with the short-term volatility of investments and aim for the greatest return they can achieve over the long-term, there is a portfolio designed for them too.

Acorns have recently added the ability to invest in a socially responsible investment portfolio. It can be hard to understand whether a managed fund or even a super account is supporting industries that an investor doesn’t believe in, so it’s a powerful addition for those people who are passionate about the environment because Acorns do the arduous work to identify socially responsible investment options for their users.

Unfortunately there is a limitation within the application for the slightly more sophisticated investors out there who would love to have a little more control over the make-up of the portfolio in which they invest. It turns out that Acorns are very protective of Dr. Harry’s portfolios and haven’t provided any flexibility over the holdings or enabled the capacity to mix and match the diversified funds. Acorns have designed the app to be super easy to use for everyone and as cheap as possible to run, so it’s a trade-off that they are willing to make to get the application into the hands of the masses.

Automatic Round Ups

The ‘Round Up’ feature is the biggest drawcard in my opinion. The app is replacing the old school money box and bringing it into the new world. So many young kids when I was growing up right through to my Grandparents generation had a tin lying around their house to stash their coins in after being out for the day.

The problem with saving your change nowadays is that most people use bank cards which doesn’t lend to all that many coins lying about anymore. Acorns has tapped into the old philosophy of savings pennies to look after the pound by adding the functionality into card transactions. Users can set-up Acorns to round up or save the difference between each transaction and the next dollar. If a card is used quite a lot, as most people do, this can become a surprisingly large sum of savings, however if that amount is too steep to keep transferring every month with the click of a few buttons users can change the amount that is rounded up in their linked account.

Users also have the capacity to select whether the funds are automatically transferred across to their investment portfolio or they need to be manually actioned. This feature enables the ultimate flexibility on saving habits and allows for total customisation for the online piggy bank.

Savings Transfers

The ability to transfer a designated amount is fantastic and I’ve taken full advantage of this feature. Personally, I’ve set up a small transfer of $25 per week into the fund which has just become a part of my monthly expenses and I don’t even notice it any more. I’ve added this on top of the monthly transfer of savings into a separate account and it’s allowed me to build my savings much faster than I would have otherwise been able to do.

Effectively I’ve now replaced my everyday savings account with Acorns by using this feature. Whilst there is obviously more risk involved in having money in an investment portfolio than in a bank, the return on my money in that portfolio is significantly better over the long-term and it’s actually far more interesting to keep track of my savings. I also know that if I’m ever in a situation where I want to access the money that I can get it in less than a week (Recently transferred $1,250 and it arrived in 5 days) but it’s not so easy to access that I can ‘accidentally’ spend it on a night out.

Lump Sum Transfers

The lump sum transfer is as simple as transferring money online between accounts, which makes it incredibly easy at the end of the month before next pay day to jump into the application and send some extra funds across into the investment portfolio. A little extra at the end of each month can make a huge difference over the course of 5 years and can really help users of Acorns to nail their mid-term goals.

The added benefit of this feature is the ability to contribute a large amount upfront. I’ll touch on why this is a good idea in a moment when we discuss fees but it allows users to transfer money that’s sitting in a savings account right now across into the application as if they were just changing bank accounts and get them started with a bang.


As I just touched on, there is always a cost when it comes to investing. Acorns is incredibly competitive when it comes to pricing and delivers the ability to invest as cheaply as anywhere I’ve seen. Acorns also charge a flat fee with no transaction costs so users aren’t penalised when they put funds into their application on a regular basis which is great for investors who want to contribute little amounts at a time. Just a quick summary:

  • $0 Funds Invested  ->  NIL Fees
  • $0.01 – $5,000 Funds Invested -> $1.25 Per Month
  • $5,000+ Funds Invested -> 0.275% of Account Balance (calculated daily and charged monthly)

The downside is the cost of the application per month for people who are just starting out. Whilst it seems like a seriously insignificant amount $1.25 per month actually chews into your savings quite a lot if you are only adding $10 per month.

My suggestion would be to have at least $500 to start your acorns investment account so that the returns that Acorns provides exceed what people would get in a bank account after fees. Without a solid contribution upfront, people will be adding risk to their savings accounts without much benefit outside the ability to save with round ups.

Referral Bonus

A neat little feature of Acorns is the ability to refer a friend and get a $2.50 bonus for both users. It’s a great touch for the app to create its own virality through organic sharing but it’s also nice for the users to get a little kick-back for putting their reputation on the line with friends and family.

There is also a feature in-built that users get a bonus when they shop at Acorns affiliated stores. Currently it’s only accessible with online purchasing and for stores that you’ve activated within the app. For some more detail around the technical functionality of the feature have a look at this great post about Found Money. I am super excited about where this feature might go in the long-term as the application generates more traction within Australia. Previously the relationships haven’t been that great for us over here as they had an American focus but when I look through the names that are involved now, with the likes of Virgin Australia, Cotton On , Bonds and Dan Murphy’s to name a few there will be some nice rewards just for shopping in the right place.

I feel as though a Woolworths or a Big W, a big name brand that is struggling a little in the current climate, getting on board with something like this would be a great strategic decision to try and attract the younger generation to shop in their online stores. Hopefully we see some more big retail chains like David Jones getting involved soon which will add some serious value to the Acorns application.

My Rating – 8.5

As you will note at the beginning I’ve rated the application an 8.5/10. I know that I’ve been glowing all through the review and I might be a little critical given how unique the product is in the marketplace but the reason for the reduction of points is twofold.

The ability to track spending is a great addition but there needs to be a little more work done in this space before it becomes a relevant feature. As it stands right now it doesn’t really compete with other free applications like Pocketbook so it’s adding a little complexity to the app that I don’t feel is necessary at the moment. It does however look like it’s headed in the right direction and I’ll be very interested to see where it ends up in the next 12-24 months.

The main reason why it lost marks for me is that I’m not sure how well new, young investors understand the cost of the $1.25 per month and how it affects their savings long term. Ideally Acorns users should have a decent initial deposit in the application so that over time the investment returns will cover the cost of administration. An example of the possible downside would be someone that is just using the app for the round up feature and is transferring between $20-$30 per month into the application. Over the course of the year, the user is going to save about $300 from using the round up feature but are going to spend $15 on the application which will leave them with $285 plus investment returns at the end of the year.

This means that the investments need to return 5% just to break even on the savings and another 3% to be more beneficial than just putting the money in the bank account.

Now, I think that the added advantage of users saving when they spend money more than compensates for the cost of using the application but it would really be an easy solution to make it absolutely transparent to people when they are signing up to the app that it would be best to transfer $500 into your portfolio to get you started. It might cost you a few users up-front but I think transparency wins in the long run every time.

The Future

Acorns is a flagship financial application of our modern world. The application is probably slightly ahead of the curve and is continuing to push development into the AI world that will be coming to our smartphones over the next decade. The obvious capabilities for high-level AI integration into the application to give users real-time feedback on their spending habits will provide serious competition for cashflow monitoring applications like Olivia AI that’s being produced in the U.S. Whilst Olivia has superior capacity in the AI space right now, Acorns has the power of collecting investment revenue from the masses to support its development and has the potential to develop into a huge market player in the Robo-Investment side of the business.

The barrier that Acorns will struggle to overcome is the knowledge around investments and how they work as there will be a lot of savers who pull their cash out of the application at the next financial crisis. If they can successfully navigate through this period then I think the sky is the limit for them. I think a feature they should seriously consider incorporating is a news feed that users can turn off and on in their application regarding the market with a particular focus on the portfolio that user is invested within. A dedicated news feed will provide the comfort that there are people behind the machine who actually care about their money and position them as a leader within the millennial generation.  Hopefully through education of how the investment world works Australians will trust the application more and they can take full advantage of an application that makes modern day saving as easy as spending money.

Please note that Get Finucated is not a Financial Adviser and the information contained on this website may be considered as general advice only. That is, your personal objectives, needs or financial situations were not taken into account when preparing this information. You should consider seeking independent legal, financial, taxation or other advice to check how the information relates to your unique circumstances.

Get Finucated is not liable for any loss caused, whether due to negligence or otherwise arising from the use of, or reliance on, the information provided directly or indirectly, through this website.

Money Isn’t Everything

I was recently informed about an interesting experiment that was going on between my grandmother and younger brother. For every $1000 he saved from his new job he received an extra $100 to help get him started on a budgeting plan. Nan was trying to teach the family great habits in a super selfless manner and I was intrigued to see how this played out.

As you can imagine, even a 16-year-old kid knows how good a 10% return on savings is so he initially banked as much cash as physically possible. He racked up $1000 before you knew it, took a little longer to cross the $2000 mark and it was around this time he discovered online shopping and the budgeting completely fell off the rails. Watching the experiment unfold really got me thinking about the true drivers of budgeting and why some people succeed but so many fail.

Initially for my brother who’d never had any money of his own, the additional $100 was a great incentive because it held so much intrinsic value. $100 to a teenager who’d just received his first pay check was a huge amount of cash. As he accumulated an increasing amount of money though, the $100 became significantly less important. Why? It’s still the same value. Why did he suddenly begin to care less about saving his money to get the extra $100 than he did about the new clothes that he was ordering? Did he need these things more or did he just lose interest in saving?

I believe the answers are the exact same reason so many people fail to budget well and hinder their own success in life. It ties directly into two things, the focus of why they are saving money and the process in which they go about facilitating it.

I want to talk about these two concepts and how I can hopefully change budgeting from the boring chore that you must do into a rewarding foundation that energises you to structure your finances for success. Firstly, changing your mindset from ‘bills first’ to ‘savings first’ and why that’s so important and secondly understand that no matter what you do if there isn’t a strong purpose behind the budget behaviours won’t stick.

‘Savings’ Should Never Come Second

Unfortunately, there isn’t any avoiding having to pay your dues (Unless perhaps you’re Jordan Belfort but that’s a topic for another blog). There is no magic wand that removes the responsibility of paying bills but it must come after you’ve allocated your savings for the pay period. Think about it, the one thing that we can all agree on is that most people will do whatever it takes to pay their bills. We’ll sacrifice a night out with our friends or an expensive dinner at a nice restaurant to make sure we can pay our rent on time or the power doesn’t get switched off. How many of you will sacrifice the same things to save some extra cash? Most of you won’t. It’s easy to find a good excuse to spend money toward the end of the month to reward yourself for something or maybe just spend some money because it simply feels good.  Either way, it’s not very effective at achieving your life goals.

By thinking about our savings first and making sure that we allocate them as soon as we get paid we effectively change our own wage. It’s a common fact that we tend to live to our means, but by automatically withdrawing our savings as soon as we’ve been paid we effectively reduce our income. Shifting our mentality to thinking about how much we can save first, and then thinking about the rest of the expenses for the month ensures we’re maximising our excess cash. If you previously missed it, here’s a previous post on how to work through your budget and understand how much cash you should be able to allocate to savings each month.

The Truth About Earning Money

An interesting fact according to Deloitte’s shift index survey is 80% of people hate their jobs. Pretty scary, right? This says to me that people care more for things earning money allows them to do than the hate harboured for their jobs. It makes sense then that if the most important, and enjoyable things in your life are experienced outside of work, managing the cash that you receive from your job and maximising the return on the time you trade should be a high priority. Even if you can’t save anything right now, it still should be thought about every single pay check because ultimately that’s what you want to achieve. Budgeting and maximising your cash-flow allows us to achieve more, and rely less upon the jobs that most likely drives you nuts.

Saving money must be the highest priority and you need to understand what you want to achieve long term to drive the habit of saving first, otherwise simply thinking you should probably save a portion of your income will have no effect on saving habits. Most people live in a stressful world with hard jobs and need some relief from their life. Spending money on things that brings instant gratitude is so much more rewarding upfront than putting money in the bank and watching it build up to some arbitrary number that serves us no purpose. Even saving for a house deposit with no time frame or realistic expectation doesn’t have much effect because without specifics it doesn’t hold any reality. If there’s no purpose for these savings we will reallocated the money to things that seem more important, like a few beers and a chicken parma with the boys or those new boots that we saw during the week.

How To Target Your Expenditure

Many people recognise early on that without a driving force a budget falls apart so they start setting goals, whether it be a new car or an overseas holiday. These goals work, people start ticking things off that they’ve worked hard to get but the problem is the savings is so often centre around consumption. These goals are OK, people need to live but they need to run alongside goals that are going to improve the quality of their lives in the long-term. I want you to set goals that are not only going to provide enjoyment, but make sure that you don’t have to work just as hard, if not harder, each and every year to keep succeeding.

5 Tips For Budgeting Success

I’ve put together a quick 5 step process which should help you to get a budget up and running as soon as possible.

1. Establish your long-term goals
Sitting down and thinking about your future can be tough, and although your long-term plan may change along the way it’s important to start working towards targets that are going to provide you success in the short-term. Once goals have been established you can determine how much this is going to cost, the time frame in which you wish to achieve these goals and understand how much you will need to save to achieve these goals

2. Write a ‘savings first’ budget
Spend a night at the kitchen table and rummage through your previous expenditure so you can accurately establish a budget for yourself and make sure you think about savings first. Removing the cash from your world instantly reduces temptation to spend the money on other things. Remember, out of sight, out of mind.

3. Automate your savings transfers
Don’t leave your ability to save a portion of your income down to human action it’s just too important for that. Set up your accounts to automatically transfer your savings the day after you get paid. Saving money won’t ever have to be something you think about again until you need to revisit your budget when and if your circumstances change.

4. Track your goals
Nobody gets excited by having a pile of cash that they can’t spend. Make sure that you use your own spreadsheet or an app to track your progress against your goals to ensure you stay motivated and can appreciate the success you create.

5. Review your budget and goals regularly
Putting together a budget and setting up your accounts correctly is a great step but it’s important to regularly review your plans. Over time your personal circumstances and aspirations will change so be sure to update your spending habits and ensure that your money is working towards what you really want to achieve now, and not 12 months ago.

There are no hard and fast rules around exactly how you should budget, each and every one of your situations are unique and will therefore require some tweaking. The main concept you should take with you is by targeting savings first and setting meaningful goals, you will guarantee that you’ve always got cash-flow working towards improving your life and knowing that makes it considerably easier to set the money aside.

As always, if you’ve got any further questions or there are some concepts that you’d like to explore further I’m always happy to answer questions.

Please note that Get Finucated is not a Financial Adviser and the information contained on this website may be considered as general advice only. That is, your personal objectives, needs or financial situations were not taken into account when preparing this information. You should consider seeking independent legal, financial, taxation or other advice to check how the information relates to your unique circumstances.

Get Finucated is not liable for any loss caused, whether due to negligence or otherwise arising from the use of, or reliance on, the information provided directly or indirectly, through this website.