What is the Splitter?
With the power of automation, money management can be a breeze.
How do I use the Splitter?
To use the Plum Splitter, head to the Brain section of your app and you’ll see the Splitter option underneath Rules.
Although the Splitter can automate lots of the day-to-day decisions to do with your finances, you stay in control by configuring the percentage of your deposits that you'd like to allocate to each Interest Pocket or investment fund.
By default, 100% of your deposits will go straight to your Primary Plum Pocket.
And because we know that nothing in life is constant except change... you can edit or pause the Splitter feature at any time, with a few quick taps
How should I divide my money?
Unfortunately, there’s no one-size-fits-all approach to money. The way you allocate your deposits will be dependent on your own financial situation.
However, there is a nifty budgeting rule that you could use as a starting point to help you decide how much to set aside for saving and investing.
The 50/30/20 rule suggests that your after-tax income should be divided as follows:
- 50% on needs (housing and essential transport and food costs)
- 30% on wants (lifestyle choices like holidays and eating out etc.)
- 20% on your future (growing your money and retirement planning)
Based on these ratios, 20% of your income will be allocated for savings and investments.
The benefits of automated investing
Automation is being touted as a silver bullet solution for a mix of sectors. And while we don’t believe it can solve every problem we face, it can definitely make money management more manageable.
There are 2 big potential benefits of using automation to manage your investments on a daily basis:
For most of us, life is pretty chaotic. And when your to-do list is the length of your arm, things are bound to get missed.
Automatic money management tools give you one less thing to worry about. Enable the Splitter once, choose your amounts and that’s it. You get the benefits of investing without having to even think about doing it.
Build consistent investing habits
With the Splitter, you’re able to build up your investments consistently without reacting impulsively to the daily peaks and valleys of the market. This strategy is known as Dollar-Cost Averaging (DCA).
The aim of dollar-cost averaging is to reduce the overall impact of volatility in the price of the target investment asset, because purchases occur at fixed intervals, regardless of the asset’s price.
However, unfortunately, no one knows what tomorrow will bring. Please remember that your capital is always at risk when investing. The value of your investments could go down as well as up.
Grow your money with Plum
Plum isn’t just an investment app. It’s a complete money management solution that can help make your money go further.
Along with the Splitter, other Plum features include:
- The weekly depositor: a rule that lets you choose exactly how much you want to set aside each week.
- Stock investing: choose from +500 brands and start investing in company stock today with as little as £1.
- And much more!
Check out our website to learn more about Plum investments.