Before you start building towards $10,000 in savings, be sure to pay off your credit cards.

Did you know that if you pay just the minimum amount due on your credit, you may end up paying more in interest than you actually borrowed?

Credit cards can be a helpful way to manage a one-time big-ticket purchase such as an appliance. But, you should generally plan to get out of credit card debt as quickly as possible. It just doesn’t make sense to rack up all those interest charges.

There are new services to help people refinance their credit card debt at reasonable rates like Marcus and Lending Club. FSRankings will be talking more about these services soon!

Invest Conservatively for a “Job Loss” Fund

Once you have enough money socked away in a rainy day fund and are free of credit card debt, it’s time to create a fund to cover your living expenses if you lose your job.

A common rule of thumb is 3 months, but, if you are in an industry where it’s tough to find a job, and don’t have family and friends who can help you out, you may need 6 or even 9 months.

You can afford to invest some of the money, but in a low risk way. So now’s the time to put money into a robo-advisor, but with a conservative approach.

The situation you want to watch out for is what happened in 2008: the stock market dropped more than 50%. By having a robo-advisor (or human advisor) create a conservative portfolio, during a financial crisis your portfolio would drop by far less than 50%. In fact, during the 2008 crisis some bond funds actually went up when the stock market went down.

For most people, a job loss fund will be between somewhere around $5,000 to $20,000.

The Upshot: The Best Robo-Advisors to Save $10,000

To start building towards $10,000 and beyond, FSRankings recommends looking for:

  • Low minimum account size
  • Fun tools to help you save
  • A robo-advisor that’s been around a while
  • No restrictions on when to withdraw your money when you need it

FSRankings recommends Acorns to help you build towards $10,000 and beyond.

Acorns “keeps the change”: if you spend $3.75 on a credit card or debit cards linked to your account, it will invest $0.25 automatically. These micro-transactions are an easy way to start investing, or to add another source of passive investing to your investment strategy. It’s a painless way to invest if you’re not ready to shell out hundreds of dollars at a time.

Another source of cash is Found Money. Found Money is an affiliate program where you get cash in your account when you make purchases with one of Acorns’s partners using a linked payment method. The reward is posted to your account within 30-60 days, and the offers and partners can be seen under the Found Money link in the app or on the website.

Acorns has over 1 million users, and its iPhone app has a 4.7 star rating on the Apple appstore.

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