Why A Weekly Spending Target Is The Best Budget To Have

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Creating and sticking to a budget can be hard. If you’ve ever felt too intimidated, too anxious, or too lazy to budget your money, you’re not alone. That’s why we challenged Qapital’s team of behavioral economists to design a more simple, more effective way to budget. The results? We’d like to introduce you to our Weekly Spending Target feature.

Do you ever contemplate what you should spend instead of what you could spend on a regular basis? A sustainable budget will comfortably pace the spending of your paycheck. But harmful budgets that encourage you to overspend (paying money you don’t have or need for unnecessary expenses) or underspend (limiting your ability to sustain the quality of life you deserve) hold you back from financial freedom. If you don’t feel balanced or in control, then you can’t be honest with yourself about your money.

That’s why we designed our Weekly Spending Target to let you customize a budget that fits your spending habits and income. It will automatically send you notifications that keep you updated throughout the week so you always know how you’re doing. You can adjust your target amount at any time so you have the flexibility to learn and grow with your spending habits.

How are we so sure we’ve made smart spending easier? Because we asked our Chief Behavioral Economist, famed researcher and professor Dan Ariely. If you have budgeting questions, he has the answers—and we built our Weekly Spending Target with those answers.

Qapital: Why should a budget be weekly? Why not set it monthly or yearly?

Dan Ariely: “If we have a yearly budget—let’s say $50,000—we’ll run out of that money way too soon. A monthly budget makes sense for some things—it fits the bill of rent and so on—but most of our discretionary expenses* are either weekly or daily.”

“We certainly need a monthly budget for monthly expenses—rent and so on—but for discretionary spending*, it’s much much better to have a weekly budget. In fact, some studies show that even if you have a two-week budget, people spend way too much in the beginning and don’t have enough by the end. So if we want to spread our money correctly, the right framework is to think about a week.”

Q: When should the week start?

Dan Ariely: “Should the week start on Friday or should the week start on Monday? Well, on the weekend we have more discretion. We can expand our spending [because] there are so many more things to do on the weekend. In fact, when you work, life is quite cheap; you don’t have enough time to spend all your money. But on the weekend, when you have more [free] time, you can expand your spending dramatically. It’s something to look forward to.”

“So what’s the right approach? If our week starts on Friday or Saturday, we end up spending way too much on the weekend and are left with no money by Wednesday or Thursday. But if we start on Monday we save some of the money because we want to keep it for the weekend, and then if we don’t have that much leftover it’s easy to shrink our amount spent over the weekend.”

Q: Should my budget have categories?

Dan Ariely: “The answer is yes only if you’re perfectly rational and if you enjoy budgeting. While it’s reasonable to have a budget for multiple categories, most people won’t stick to them. You don’t want to go for something that’s perfect, you want to go for something that is doable. For that, I recommend the strategy of creating one budget for all your discretionary spending.”

“Think about all the things you could live without. For example, grocery shopping is not one of those things. You can’t live without food. But take all the things you could live without, put them in one bucket, then think about what amount you want to spend on that category per week—coffee, drinks, going out, entertainment—and then think of that as a separate category, as a holistic category, without breaking it into components.”

The Weekly Spending Target tool is available only for users with a Qapital Visa® Debit Card. Sign up for a (free) Qapital Spending Account today and set a budget you can feel confident about.

This interview has been edited and condensed for clarity.

*Discretionary spending: non-essential purchases for things like leisure and entertainment.

 

 

5 Holiday Shopping Tips To Get You Through Winter

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The winter holiday season is upon us! Stressed out about how much holiday cheer is going to cost you this year? Fret not! We’ve got a few holiday shopping tips to help you and your wallet survive all the meals, flights and gift-giving ahead.

1. Spend money on experiences, not just things.

Sure, a new game console or a pair of shoes are appealing, but when you’re thinking about gifts—for yourself or for someone else—remember the value of experiences, too. A ticket home to see Grandma could mean a lot more to you than an iPhone X down the line.

Sometimes it’s more about what you spend your money on rather than how much you spend. Buy an experience you will remember, an experience you can share. Memories are one of the few gifts that never stop giving, and the winter holiday season is famous for them.

2. Prepare yourself for unexpected holiday purchases.

Even if you don’t have an emergency or rainy day fund lying around, it’s good to expect the unexpected. Overestimating what you’ll pay for dinners with friends and presents for your family can help keep you from running into the red every time you swipe your Qapital Visa® Debit Card.*  

Some things are out of your control, for example, knowing exactly how much you’ll spend on that first night out at home with your best pals from high school or that spontaneous present you’ll buy your daughter when you see it in the store. Face the reality of holiday splurges! If you know you’re going to have hot chocolate every day it snows, then don’t lie to yourself and pretend you won’t buy one every morning. Budget it into your weekly spending.

3. Think of spending on others as spending on yourself.

As the saying goes, “We make a living by what we get. We make a life by what we give.” By that logic, every present you give to someone else is also a present you give yourself.

Don’t buy into the “giving is a gift in itself” ideology? Well, when you think about it, gifts that are experiences are gifts to anyone who partakes in them—including and especially you. So you treat yourself when you treat your best friend to a cup of coffee or shell out half a month’s pay to fly home for the holidays!

4. Choose debit over credit.

If you already have a Qapital Visa® Debit Card, you know the benefits of choosing debit over credit (especially when your debit card is synced up with Qapital Savings Rules). You can spend less time worrying or feeling guilty about purchases, and more time enjoying yourself over the holidays.

If you don’t have a Qapital Visa® Debit Card, what are you waiting for? They’re free, they’re sleek, and they come with our exclusive Weekly Spending Target budgeting tool.

5. Small indulgences can make the holidays feel decadent. Embrace them.

Everyone gives in to their guilty pleasures some time or another—those small indulgences that you crave all year long, all week long, all day long. Giving in to what Qapital’s Chief Behavioral Economist Dan Ariely refers to as the “what the hell effect” is all too normal. Enjoy what you know you can’t resist, and if you treat yourself to something nice, let go of the guilt before it grips you. Never underestimate the power of little things over our happiness.   

Happy holiday spending!

*Issued by Lincoln Savings Bank, Member FDIC

Introducing Qapital’s Weekly Spending Target

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We just made smart spending a whole lot easier. How, you ask? We built a tool that lets you customize a budget for your spending habits and stick to it, effortlessly. Say hello to Qapital’s Weekly Spending Target.

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Our Weekly Spending Target works exclusively with the Qapital Visa® Debit Card*—another reason to sign up for Qapital Spending in the app if you haven’t already.

*Issued by Lincoln Savings Bank, Member FDIC

How Saving With Qapital Helped Me Quit My Job To Pursue My Dream

This guest post is courtesy of Kassondra Cloos.

Photo by Nick Cote
Photo by Nick Cote

Becoming a freelancer is the dream for a lot of writers, who love the idea of trying to make it as their own boss. I first started thinking about making the leap in 2014 when I was a newspaper reporter and not making very much money. I considered quitting to waitress, travel, and pursue creating writing. With tens of thousands of dollars in student debt, though, I needed guaranteed income.

But last year, while working as an editor for an outdoor industry news website—a dream job in itself—I became addicted to saving with the Qapital app, and I started thinking about it again as my savings grew. I had met lots of successful travel writers who told me going freelance was the best decision they’d ever made, and I started preparing to give it a shot.

In December, sick of throwing away all my spare cash on student loan bills, I cleared out my checking and savings accounts to pay off my highest-interest loans. There was a moment of intense freedom, then a few weeks of living paycheck-to-paycheck while I rebuilt my safety net.

I watched my spending closely, and I wanted to hold myself accountable for saving the money I’d no longer need for my loans.

I found Qapital while Googling new savings accounts just after Christmas, and I opened an account immediately. I set up goals for student loans, quitting my job, and vacation, and a bunch of rules, like rounding up to the nearest $1 on every purchase, the 52-week rule (which saves $1 the first week then $2, then $3, and so on), and a guilty pleasure rule for withdrawing money from an ATM.

At first, I saved maybe $20 or $30 a week while I recovered from clearing out my funds to triple digits. But it quickly became like a game, and I created more and more rules. Automatic transfers held me accountable to save the $250 a month I had been spending on the loan I’d paid off, putting it just out of my reach so I couldn’t spend it frivolously. I loved how quickly spare change added up, so I took it a step further and changed my $1 round-up rule to a $5 round-up rule.

Saving with Qapital became addicting, and I’d check my account obsessively, every day, to see if I could round up a goal to a milestone by manually transferring an extra $5 or $10. In the spring, I started freelancing on the side as much as possible to build up my clips, establish relationships with publications I’d want to write for long-term, and save enough to quit.

I created a new goal for taxes, for a third of what I made from assignments, and I put nearly all of the rest into other Qapital savings goals. Instead of spending my extra cash on eating out or new clothes, I funneled every extra penny into my Qapital savings.

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Within just seven months, I saved over $9,000. A little more than half of that came from extra income outside of my regular job, and the rest was from filing away all the extra money I could. I used IFTTT, for example, to save $5 with one tap every time I avoided spending money on non-essential purchases.

With a safety net I finally felt comfortable with, I put in my notice in late July, and started freelancing full-time in mid-September. It’s a little early to know how successful I’ll be in the long term, but I do know that if every month is like this one, I’ll be just fine.

Photo by Nick Cote
Photo by Nick Cote

Kassondra Cloos is a freelance adventure travel and outdoor writer based in Boulder, Colorado. Follow her on Twitter and Instagram at @kassondracloos, and find more of her work at kassondracloos.com.

Hey Siri, Save $25 For Honeymoon

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It’s a big week for your iPhone. Apple released the long-awaited iOS 11 operating system… And we have a surprise for you, too. You might have seen us featured on the app store’s “Hey Siri” page. That’s because we not only worked to make the Qapital app compatible with iOS 11, we also launched Siri integration!

What does that mean for you? It means instant updates on your Qapital account balances whenever you want. It means easy-peasy, handsfree transfers of money to your Goals while you’re cooking dinner or riding the bus. You can ask Siri to check your balance, transfer funds to a Goal, or show you how much you’ve saved so far towards that plane ticket to Barcelona.

Of course, Siri’s not the only way your iPhone and Qapital app work hand in hand… Don’t forget you can set up an AppleHealth Rule to link your fiscal habits and fitness routine.

Qapital makes saving money easy, and things just got easier.

What Do Millennials Regret Spending Money On Most?

At Qapital, we aim to help your money make you happy. The last thing we want you to feel about your everyday saving and spending habits is regret.  

But how do we get to those squirm-inducing, regretful moments of buyer’s remorse? And more importantly, how do we avoid them? These are questions we ask when developing products to support you. In fact, we partnered with Common Cents Lab at Duke University and MetLife to conduct a Millennial Financial Regret Spending Study to do just that.  

Our team asked 1000 millennial participants to review their most recent financial transactions and fill out a questionnaire about which ones they regret the most and which ones they don’t. 28,000 data points later, we concluded some pretty useful insights. Peek the four big takeaways:   

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You can read more about the study findings here.

Wince less, smile more.

The Inspiration for our New Product – Qapital Spending

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Written by George Friedman, CEO.

At Qapital – we spend a lot of time thinking about people’s relationship with their money. About how the way people are wired affects the way we manage our money. And about how human nature shapes our financial decision-making (sometimes for the better, sometimes not).

It’s why we design our products in tandem with Behavioral Economist, Dan Ariely – who helps us find ways to make the act of saving more successful. Like having people save for specific goals, instead of generic savings accounts. Or having people upload custom photos for their goals – because we know that when people can see what they want in front of them, they save 2x more.

By combining behavioral economics and technology, we built an app that turned people into great savers by making saving easier and more motivating.

Today, we’re taking that same philosophy a step further with the launch of “Qapital Spending” – a checking account designed to help people spend more intentionally, and reach their goals even faster.

This means that Qapital is moving from a simple savings app, to a more holistic goal-focused personal finance platform. Or – in human speak – a new way to bank designed to help people put their money towards the stuff that matters most.

Now, with the addition of Qapital Spending, users can better monitor and manage their weekly spending and savings habits in real-time. They can automatically puts a little away every time they swipe – making saving for their goals a daily, automatic habit. Qapital users even get helpful notifications about how much they’ve saved and track progress towards their goals.

Just like traditional banks, Qapital lets people send paper checks, set up direct deposit, even earn interest on their account balances. But UNLIKE banks, Qapital has no monthly fees, no minimums, unlimited transfers and more. So basically – the stuff you need, without the stuff you don’t.

It’s the next step in our effort to create a better banking experience. One that helps people not only manage — but improve —  their financial lives. One that’s less frustrating, and more fulfilling. One that helps people get the most possible happiness out of their money.

And the best part, is this is just the next step. Much more to come in the next year.

A Saver’s Journey Around the World

Written by Carl Parson

This week, Qapital met with Phillipe Casorla Sagot to hear about his Journeys around and across the globe.

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Wednesday noon, and that Swedish sun seemed to have finally come out for the summer. Everyone at our Stockholm office were drawn closer to the windows, excited like magnets. But the sun wasn’t the only thing to excite me. Today, I was going to interview one of our super-savers, Phillipe Sagot.

“The world is big, but you run into people you know everywhere”

Maybe I shouldn’t have been very surprised right then — but I was. When Phillipe came into the office, he immediately walked up to two of my co-workers. “Hey, what’s up?” he said.

Apparently, Phillipe knew not only one, but two people working at Qapital. I asked them all if this meant they had staged this whole meeting.

“No”, they all smiled. And Phillipe said, “I guess the world is big, but you still run into people you know everywhere.”

We found a quiet little room. I asked if it’s okay to record, then I opened the shades to let the summer light in.

“You’re originally from Costa Rica” I asked. “What brings you to this little city of ours?”

“Work. And, well, I guess I like to travel around. I just came from Norway, actually. It was amazing. The Fjords — wow.”

“Wow, yes — those fjords have quite a reputation” I replied (But didn’t reveal how badly I’ve wanted to go there lately.)

“The only thing with Norway was how expensive it was.”, Phillipe continued. “I got some salmon and a beer, and it cost me $60! I guess you gotta pay for those pretty views”

I tried some type of clever reply to this, and said, “I guess it’s a good thing you’re saving with Qapital.”

He laughed, looked at his phone, and agreed.

“I’ve started saving for a trip to Tokyo. It’s a fascinating place.”

“I remember downloading Qapital like two years ago. I didn’t use it at first. But I came back to it, and thought, ‘why not’, you know?” This was like six months ago. Now I’ve saved up $1900.”

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“What are you saving for?”

“I want to go to Tokyo. I went there two years ago. Ever since, I haven’t been able to stop thinking about it. I just want to go back. And this is actually the first time I save for a trip in advance. I used to put everything on my credit card, then payed for it afterwards… which kind of wasn’t the greatest.”

“So when do you think you’ll go?”

“Well, I started saving in December. I figure it’ll take me a few more months. I’d like to go in the winter. But I don’t think I’ll stay in Tokyo all the time. This is the advice I give to some: If you’re down to travel a bit outside the city, you should go to Kyoto. It used to be the capital — and you can feel it. It has a lot of tradition.”

“Tell me more about that.”

“Tokyo is crazier. The pace is crazy. It’s crowded — but not in a bad way. Kyoto is calmer. You can go to the temples that are so unique to Japanese culture. You can sit down with the old ladies wearing traditional sandals and garments. And the tables there are only like four inches high. It’s really, really different. I love it.”

“I can’t wait to reach my goal.”

I gave Phillipe a Qapital t-shirt and mug, and said, “It’s not much, but I wanted to give you something to show how happy Qapital is that you came over for this interview.” and he gave me a polite smile.

“I love them”, he said.

“One last question”, I asked. “Do you think Qapital has made you a better saver?”

“Well, before I didn’t save at all. So definitely. I rather not put the big travel expenses on credit anymore. It just feels better if I have the money I’m spending. I gotta say, I’m happy to save. I can’t wait till I have reached my goal.”

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How I Saved for My Wedding Making My Lunch and Using the Qapital App

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Written by Laura Hager, Blogger

For years, I had been dreaming about my wedding. I had been pinning pictures of pretty venues, gorgeous dresses, and color palettes to my Pinterest board long before I was engaged. I had so many ideas saved up! Needless to say, I was beyond thrilled when my boyfriend got down on one knee and asked me the question. We were in a newly engaged, dreamlike state until we realized that we had no way to pay for our wedding.

How had I scrolled through endless wedding Pinterest boards and never thought of how I was going to pay for it?! After a few days of trying to coming up with schemes to earn money, it hit me. I could create a new goal on my Qapital app! I had my Qapital rules saving my money into two goals already, so I knew that this type of savings plan was perfect for me! I logged into my app and created a new goal and titled it “My Wedding.” I knew I need to add money to that goal as soon as possible, so I created two rules. The first adds a certain amount into the goal every Sunday and the second rounds up every purchase to $3.

What I love about Qapital is that I just have to create the rules and let the app do its thing. I don’t have to think about my savings goals all day. My handy app is constantly working towards my savings goals for me, even when I forgot. Something else I love about Qapital is the automatic overdraft protection. Overdraft fees are the worst! The app helps by postponing the transfers until the withdraw account is ready to go. Plus, it holds the transfer amount and remembers what it was going to transfer so no saving rules get skipped!

In addition to the rules I created, I started manually transferring money into my wedding savings goal. If I decide to make coffee at home instead of hitting up the closest coffee shop, I transfer the $4 I would have spent into the app. If I decided to check out a book at my library instead of purchasing a new one, I move the amount I didn’t spend over to Qapital. It’s so easy to manually transfer a specific amount of money. And in only a week of this new habit, I saved $50 from packing lunches and brewing my own coffee.

Using Qapital to save for my wedding has relieved a lot of stress! It’s also helping me become more aware of my spending habits and helping me become a better saver!

Do you have a wedding coming up? Let me know which saving rules are helping you get to your dream wedding goals!

Laura Hager lives in Phoenix, AZ with her fiancé and their small dog, Astro. She runs a blog called Laurel and Fern. She loves scrapbooking, baking, reading, and all things creative. Her website is www.laurelandfern.com and her Instagram is @laura_hager.

How I Saved $951.68 for my European Adventure with 2 minutes of Minimal Effort

Written by Lucy Ross, Editor in Chief at Likeabossgirls

You know that feeling on the first chilly day of the season when you reach into the pockets of the coat you haven’t worn in months and you realize you are now holding a $5 bill? Yeah, I don’t know about you but I get pretty jazzed about that. Fancy latte and a muffin, here I come!

So imagine that feeling times 200. Literally.

That’s how I felt when I went to check my Qapital app as I hopped on a plane to Budapest and found $951.68 saved and ready for spending on fun things. I had just set it up 6 months earlier!

LET’S START AT THE BEGINNING

Ok, let me explain. In August 2016 I decided I wanted to finally take this idea of a European springtime travel sesh out of my head and into action. I’m a digital nomad–a.k.a. I get to work from my laptop, so wherever I have a wifi connection and one of those aforementioned lattes, then I am good to go!

For me it was just a matter of logistics: where will I go, where will I live, and how long will I be there. And of course, intertwined with each question: how much moolah will I need to cover my expenses and then some.

I did some digging on this fantastic site where digital nomads rate cities based on different factors that affect our livelihood and quality of living called NomadList.com. I found that Budapest and Prague met my requirements:

  • High-speed internet that is easily accessible (i.e., complimentary fast wifi at all cafes)
  • Friendly toward foreigners
  • At least of a third of the population knows English
  • Safe for a solo lady traveller
  • Low cost of living

BUDGETING FOR A TRIP

Once I nailed down the locations, it was on to planning out my finances. I calculated my average monthly expenses for the last year in the U.S. and then told myself Lucy, your monthly expenses for this 2 month European jaunt need to be equal or less than that!

So off I went finding airbnbs and flights that were in the budget. Easy enough.

But I know myself and know that if I have an opportunity to go to some cool cultural event (like the Hungarian Folk Dance concert I just went to last night) then I want to be able to go do those things guilt-free… “When in Rome…” right?!

I knew I wanted to set up a savings plan for the “little luxuries.” Within that day, I learned about Qapital (gotta love targeted Instagram posts!).

HELLO EASIEST SAVINGS APP EVER, NICE TO MEET YOU

The premise is simple: it’s too hard to save AFTER you’ve spent money. So why not just save while you spend. And make it automatic!

I downloaded the app and within 2 minutes I had set up rules for reaching my savings goal of $1000 (=$500 for each month I’m there) for the little luxuries of my 60-Day European Adventure.

I had 3 “rules” for saving that I set up in the app:

  1. A Round-Up Rule: Every time I made a purchase using one of my connected cards, Qapital would round up to the nearest second dollar and put that difference in my savings
  2. A Spend Less Rule: For every week I spent less than $15 at Panera Bread (where I have a bit of an addiction!), then the difference is saved in my account
  3. A Steps Rule: Every day I walked 10,000 steps or more, 5 buckaroonies get transferred to my savings (Yay health! Yay savings!).

Here are screenshots of the my rules and activity for a few days in March:

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So that was August 19th when I set up those rules. On April 3rd, as I boarded the flight for my first leg of my journey, I wanted to see how my progress was looking (FYI, they also sent me monthly reports of how close I was to my goal so I could adjust or add rules whenever I wanted).

And what did just six-and-a-half months of mindless automatic saving have in store for my future little luxuries? $951.68! Not bad for a mere 2 minutes of effort setting up savings “rules” back in August! Concerts, fancy dinners, and facials, here I come!

I guess what I’m saying is two-fold: Saving is smart. But making saving AUTOMATIC is wise. Do both. It’s actually kinda fun.

Lucy Ross is a Web Design, Videographer &  is the Editor In Chief at Likeabossgirls.