Do you find it a struggle to put money away every month? What if there was a way to save money automatically in such small amounts that you would hardly notice? Take a look at this Plum review to see how useful it can be for you. Plus, for the more adventurous amongst you, you can look at investing.

Let’s be honest, for the majority of us, saving money can be tough. We often start with good intentions, but by the end of the month, your account is hovering around the 0 mark. You think that you’ll give it a try the following month only for the same thing to happen.

It’s quite scary when you think that over 25% of UK adults have no savings at all. What do you do if you have an unexpected bill? Or the worst case scenario… how long could you stay in your house if you were to lose your job?

This is why it’s so important to have some money saved away. Retirement may be 30 or 40 years away, but you never know what’s around the corner.

Start saving

Don’t think that you suddenly have to put £100’s into an account straight away and give-up eating for several months. One great trick to start your saving is by doing it in small amounts. A couple of pounds here and there every week is something you will probably not notice. And within a couple of months, you’ll soon have a nice little sum growing. This is what Plum is all about.

Who is Plum?

Plum launched in October 2016

Taken from their website:

Our mission is to help people save money without even lifting a finger.

We’ve always hated saving money, but we wanted to change that. We decided to make Plum so that there would be an easier way to save money to spend on things we want, rather than the things we need.

How does it work?

Unlike other firms that offer a similar service, Plum doesn’t have an app. Instead, they use Facebook Messenger to help you save.

All you need to do to get started is to visit the Plum website (see the link below). From there you will need to fill out some personal details and then connect to your Messenger account. Finally, you connect your bank account and you’re ready to start saving.

Plum analyses the money going in and out of your account to determine how much you can afford to save. Plum guarantees that you will never go into your overdraft when they transfer the money into your savings account. However, if that did happen, they promise to refund any fees. Unfortunately, they won’t refund fees if you go on a big spending spree after the money leaves your account.

Through Messenger, you can easily tell Plum whether you want to increase or decrease the amount you’re willing to save. You can also check your Plum balance or get some handy insights about your current account. You can get summaries for how much you have spent over the last week, month or by category.

Is your money safe?

Taken from Plum’s FAQ’s

When Plum sets money aside for you, it is moved from your bank account, to a protected bank account by our partner MangoPay, which is regulated to hold your money as an ‘Authorized Electronic Money provider’. This bank account is not FSCS protected, but is subject to strict European regulation, meaning that in the unlikely event that Plum, MangoPay, or the bank should go bust, you will get all of your money back.

What interest rate do you get on your savings?

0%. That’s right nothing. If you want to start earning some returns, you will need to start investing with Plum. Investing is purely optional though. If you want to save for a few weeks and then withdraw your money you can.

Plum offers several options for you to earn a return on your money, mainly through investing in stocks and bonds. There are several funds in which you can invest, all offering different rates of return in the region of 5-23%. This is pretty impressive when you think of the interest you would get if you placed the money into an ISA.

Plum doesn’t invest the money themselves but uses Vanguard investment funds which are an investment manager with more than $5.1 trillion worth of funds.

However, as with any kind of investment of this type, these returns aren’t guaranteed and there is a chance you could lose your investment. Generally, the bigger the return, the higher the risk.

Investment isn’t free either. You will be charged £1 per month for each fund, plus there is a small management fee. That means you don’t want to just put £10 in and leave it, as the fees will soon see your investment wiped out.

Another way to earn money from your Plum account is through lending. Plum works with RateSetter which is a peer-to-peer (P2P) lender. In short, they lend your money to other people and you should see around a 3% return. Before you jump straight in though, you need to consider that there is no FSCS cover which means any money you put in could be at risk.

Is it worth investing with Plum?

I am not a Financial Advisor, so I can’t give you any advice. However, I have invested and seen better returns than I would from an ISA. My dad always told me not to invest more than I can afford to lose, so this is the mentality I have adopted with Plum

My Plum review conclusion

Plum really is an excellent method to use if you struggle to save and very easy to use. It’s certainly worth considering to sign up for. And if you manage to refer 3 friends to sign-up to Plum and you can earn yourself £25.

Click below to find out more.

Alternatively, you can look at using Chip. Chip offers a similar service to Plum but uses an app instead of Messenger. They pay a minimum of 1% interest up to a maximum of 5%. Although returns aren’t potentially as good, they are steady. Take a look at my Chip review.

Please note that this post contains an affiliate link to Plum. All views are my own.