GuardianWealth group savings app empowers communities of friends to pool funds and save together while improving their credit scores.
Saving is the backbone of financial freedom for an individual. Possessing good saving habits will protect you from financial ruin. However, saving with friends or a group of like-minded individuals, who you can trust, will help you achieve your short-term and medium-term financial goals.
All you need to do is martial your friends, relations, co-workers, or even book club members, and download the GuardianWealth app. The GuardianWealth group savings app provides an easy way for you to save alongside people you trust.
The motivation behind the GuardianWealth group savings app is to empower communities to achieve financial security. You can use the GuardianWealth group savings app to save for big-ticket items or emergencies by pooling funds with like-minded individuals in your social circles.
Before delving into the GuardianWealth group savings app, let us peek into how saving groups arose in the personal finance arena.
The simple act of pooling funds as a group for a greater purpose is decades old. Savings groups go by various names across the globe. In the USA they are known as ROSCAs, Tandas in Mexico, Chit Fund in India, Stokvel in South Africa, and Chama in East Africa.
Group savings at their core comprise of a limited number of self-selected individuals who contribute their money to a single pool as savings. Individual members of the group can then access microloans from the pool fund on flexible terms.
Group savings are, therefore, informal saving and credit schemes that support individuals to achieve short-medium term financial goals. They are particularly uplifting to the non-bankable segments of society. These are low-income earners and people with low credit scores.
That is, however, not to say that the financially stable demographic will not benefit from group savings account app.
Group savings cultivate good saving habits and cushion members from unpredictable financial situations. They also create a sense of accountability.
With the rise of fintech, group savings apps like GuardianWealth have revolutionized how group saving works. We will delve into the GuardianWealth group money saving app later on in this article.
Group savings operates using two main models:
In a saving circle, each member contributes a fixed amount monthly. The members decide beforehand on an amount that is comfortable for each member to contribute. They can set the amount from as little as $10 to $1000.
Let us illustrate with a savings circle that has six members who contribute $100 each per month. Each member in the saving circle will have one turn to receive a $600 lump sum payment over the next six months.
Rather than borrowing from a pool, savings circle members loan to each other. The members decide the order of payment to members beforehand; perhaps the member with the most urgent need is given priority.
Savings circles often charge no interest or very low interest. Some saving circles have a separate fund for emergency loans.
Note, however, that savings circles function best with fewer members (four to six). That is because they are designed to meet short-term goals and cover emergencies.
The more frequently you get a payout, the more you can do within a shorter period. Frequent payouts also generate members’ credit history.
Another defining characteristic of saving circles is that despite being an informal saving channel, it can help raise individual members’ credit scores. There are group savings apps like GuardianWealth that monitor saving circle activity.
The group money saving app then submit the data collected to credit companies to help members raise their credit scores. Default in payment by one member does not affect the credit scores of other saving circle members.
However, loan default rates among saving circles are below 1% primarily because people feel a sense of accountability when familiar faces are watching.
GuardianWealth group money saving app may help subprime borrowers in saving circles improve their credit scores.
Group savings or non-rotational saving groups constitute self-selected individuals who put their money together in the same saving pot.
Self-selection means that all members are familiar with each other. That is the main similarity between a group savings and a saving circle.
Members of a group savings or saving circle need to trust each other fully and be accountable for the model to work. GuardianWealth group savings app may help with matters accountability.
Each member in a non-rotational saving group contributes any amount they can to the saving pool monthly. Each contributor can thereafter access microloans from the saving pool according to the ratio of their contribution to the pool.
The microloans are paid back to the pool fund according to terms previously agreed upon by members. The interest charged also helps grow the saving pool.
Group savings members contribute money to the pool in 6,12, 18 or 24-month cycles. At the end of the saving period, the lump sum amount in the saving pool is distributed to all members according to the ratio of their contribution.
With group savings, the more you save, the more you get in the long run.
You might be wondering whether a group money saving app is for you. Below are some real-life scenarios where a group savings account app will come in handy.
Let us refer to a saving circle in the first example.
So, imagine you are a group of four co-workers who also happen to be friends. You are all at somewhat different places in life and are looking to achieve separate individual goals.
One friend needs braces for her child and the second one needs an appliance for her home baking business. The third friend wants to go on vacation and the last one is saving for emergencies because her department is down-sizing.
Each friend purposes to put away $200 per month for their project but often fail to do so.
If the friends form a saving circle, each friend will get $800 for their project within the next four months. Saving together towards short-term goals will help keep the members accountable towards each other and will keep them motivated to save.
The friends can adopt saving circle to help raise their credit score too. If they achieve their set goals within one cycle of saving, they can set new short-term saving goals.
Achieving individual goals brings them closer as friends and helps them nurture a saving culture.
In this next example, let us use the saving group model.
Let us say your best friend has a milestone birthday coming up in a few months and you want to throw her a surprise party. You are acquainted with various people from her social circles like family, co-workers, friends from college, and others.
You approach the individuals in her social circle about the surprise birthday party and propose a budget. Each friend or acquaintance to your best friend contributes the amount they can towards the surprise party budget.
You set a future date when you will use the raised funds to pay for birthday party supplies. When the birthday fund matures, you use the funds to throw the surprise party. Similarly, this app can be used as a group vacation saving app, where you can for holidays with friends and family. For example you and you friends have planned to travel during the summer to a fancy location. You’ve also planned this month ahead because this is likely to be an expensive trip. With the GuardianWealth group savings account you and your friends can start saving towards this goal together and in advance, making managing finances much easier.
Group savings is like crowd funding for a specific goal. You can use a group savings app to make the whole process easier.
If you are in a Group savings or saving circle, below are some ways in which a group savings account app like GuardianWealth can benefit you.
Below is a summarized comparison of group savings and saving circles
Both group saving models have their pros and cons. If you have fair/subprime credit score, a saving circle would be best because it will help boost it. Saving circles are also favorable if you have a low income and a difficult time saving.
If your primary purpose is emergency saving, a saving group would be best. You can save more or less money according to your financial situation. You can also return your payout to the pool if you have no pending projects by the end of the saving cycle.
Whichever group saving model you choose, the GuardianWealth group savings app will come in handy.