Automate Savings With These Top Tips

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Are you struggling to save? Guess what, we all are! One of the most proven methods for successful savers is to automate savings. In this article we will go over the process of savings, and the superpower that is automation.

If you’re looking for an example, last year I set up a new account to automate some savings. As I write this, it is January. Despite struggling to find extra every week to save, that automated account has $4,200 in it! With the automation doing the work for me, the only thing I have to worry about is what to do with the money.

Why Automated Savings is a Superpower

Have you ever wanted to fly? How about bave x-ray vision? Have you ever wanted to look at your bank account and see it miraculously full of money? Well, I don’t know about the first two, but the last one is definitely achievable, and it’s all through automation.

With automated savings you have the ability to mindlessly save for debt paydown, hoard up some money for a fun purchase, or mindlessly save for that next big ticket item. After you set up the process your wealth will grow without you having to lift another finger.

What would you do with $4,000 at the end of the year? (I’ll probably pay down some debt from my rental property loans in case you were wondering.) Automating your savings gives you a huge advantage over your financial well-being. You can beat that “I don’t have enough money to save this week” thoughts because it was already done. It will be hard and slow at first, but we’re here to give you some steps to make the process easier. Trust us, every little bit helps.

Why Is Automation So Helpful

If you don’t believe that automation is a superhero, maybe you’ll believe it’s magic. Did you read the above? I saved over $4,000 without even noticing. Where did that money come from? Not me! Okay, it did come from me, but you know what I mean.

When you set it and forget it, by the end of the year, poof! You’ll have money in your account too. Have you ever tried to save manually before? Let’s say, $5 a week. How did it go? Maybe you started off strong. Maybe you saved for the first month, or even two! And then a birthday popped up and you needed $20. So you took it from that savings. And then one week you had $5 in your pocket, but you really wanted a latte. The next thing you know, it’s been 5 more months and you haven’t saved a thing.

I’ve been there. It’s happened to all of us. This is where the magic of automation comes in. You don’t forget to save that $5, because it’s already being done for you. You’re not going to pull that $20 from this savings account, because you’ve already forgotten about it. And by the end of the year, you’ll happily find that your account has money in it.

Convenience and Effectiveness

Automated savings can be very convenient and effective. By using systems like direct deposit and automatic transfers, your savings will be racked up in no time. And good news, pretty much every single bank offers these features, as well as many employers.

How exactly will that money rack up, you ask?

With the following:

1. Consistency: Automate savings by ensuring that your income is set aside without you ever having to do it on your own. This helps build savings efficiently and mindlessly
2. Decreased Temptations: Ever heard the expression out of sight, out of mind? You are less likely to purchase non-essential and frivolous items if you can’t see the money to begin with.
3. Discipline: You are basically forcing yourself into being disciplined with your savings. When money is automatically transferred, it becomes part of your budget routine, similar to other payments you may make like a mortgage or bills.
4. Achieving Financial Goals: You can work your way to your financial goals without lifting a finger. Having your savings auto-transfer at a regular interval can help you build an emergency fund, save for a vacation, or save for that down payment, without any effort on your part.
5. Easy to set up and manage: How hard is it to set up an automated transfer? Well, it took me about 7 seconds last time I did it. Just find the feature in your banking page, pick a date, frequency, amount and account for the money to transfer into and let the savings begin!
6. Less stress: Knowing that your savings are growing in the background can be a huge stress reliever. You can spend the money in your pocket with ease, knowing that your financial goals are being taken care of even while you sleep.

Don’t think you have enough money to save? Think again. Can you do $5 a week. How about $5 a month? No? Let’s look at some other options.

I was recently given a 1% raise at work. 1% may seem tiny, but I decided to put the equivalent amount of that 1% into a savings account every check so that I would never even know I had it. What’s the impact of that? That 1% equated to about $10.38 per week. At the end of the year that little 1% saved me $540, which I used to buy all of my Christmas gifts. Imagine if you did that with a 2% raise, or 1% every year for 5 years. For me, that would mean in year 5 I’m saving $2,700 per year. In case your were wondering what the math was for how much that account would hold if I added 1% of my salary every year, at the end of year 5 I would have $8,100!!

Maybe you don’t feel like you have $5 to spare at the end of the week, or maybe you don’t have a raise to look forward to. Be creative and look at what other ways you can save.

Visualize Your Goals

Did you ever have a piggy bank as a kid? You’d get so excited to put your money in there, from chores or birthdays, or some extra cash from Grandma. And at some point you’d open it up and look at all the money you had!  

Think of your automated savings as a version of that piggy bank. Or maybe you want to keep the money in an actual piggy bank! Either way, visualize that full piggy, stuffed with coins and dollars. How much is in there? What will you use it for?

As a kid, we may want to buy some candy or see a movie with our friends, but as an adult our goals are usually much different. Are you saving for a car, Christmas presents, or just struggle with savings and want some backup cash? Having a goal in mind can help you stick to your path and create some savings!

Ways to help you visualize:

1. Put a picture on the fridge – What’s one thing we do every day? Open the fridge. Or maybe it’s the door you leave the house from, or where you place your keys. Put a picture of your goal there, be it a new house, a family vacation or anything else you’re saving for 
2. Shade in a Fun Fillable – I did this when I was paying off my solar panels. I hand drew a punch of panels and filled one in each time the allotted amount was paid off. You can do this for your savings too, and it makes a fun game. You can even include the kids! Print out a picture of an empty jar or a cool map, create savings intervals, and color in a portion once that amount is saved!
3. Progress charts – similar to above, this chart fills in each time a savings milestone is met!

How to Get Started Saving

I know you want to have some extra money saved up. Don’t pretend you don’t! But maybe you’ve been reading all of this and you’re thinking, ‘yes! I want to automate my savings, but how do I get started?’ 

Here are some great ways to start automating your savings now:

1. Direct Deposit- if your employer allows you to directly deposit your check into multiple bank accounts (and most do), I’d strongly recommend this method. Open a new savings account, and then work with your employer to have a set amount from each paycheck deposited into that account on payday. This is a fantastic method because your savings start growing straight from your paycheck and you never even have to see the money.
2. Automated transfers- if your employer doesn’t allow direct deposit to multiple accounts, or if you just don’t like that method, you can set up automatic transfers from your checking account to another account. I recommend doing this as soon as your paycheck hits so it would be similar to the direct deposit method. This way the money isn’t sitting in your account for long and you won’t have a chance to miss it. Simply set up your savings account and in the transfers section of your banking you can choose to create a recurring transfer. Select the amount and frequency and you’re on your way to automate savings
3. Piggy Banks- okay this one isnt exactly automated. Unless you consider that you’re the automation mechanism. But, this is a great method, especially for those who like to deal with cash. You just need to set up a system that works. Create a frequency and amount and stick to it. Maybe every Friday when you cash your check you drop ten dollars into the piggy, or every time you have a $5 bill it goes in there. If you can get into the habit of doing this consistently, it becomes mindless and automatic

How To Overcome Challenges

Sometimes life just gets in the way. You have an unexpected car repair come up, or the purse you’ve been eyeing up for a year is on a super sale. So how do you stay on track?

My first piece of advice is: if you do not have an emergency fund and a true emergency comes up, use your savings to take care of it. Don’t put it on a credit card and pay ridiculous interest rates or borrow from a loan shark. Use the money you have, take care of the emergency, and then get back on track. 

(Side note: we strongly recommend you have an emergency fund and if you don’t we highly recommend using your automated savings account to build one before you save for anything else.) See our article here on emergency funds

This is only recommended if it is actually an emergency. If you feel a strong desire to spend the money for anything less than an emergency or it’s intended purpose, here are some helpful ways to resist the temptation:

Ways to resist spending your hard earned savings:

1. Visualize your savings – remember the reason you started saving in the first place? Keep that in the front of your mind at all times. Do you want another year to go by without having that savings in your back pocket? No? Then don’t spend the money on something else.
2. Shop with intention – when you shop with intention you don’t overspend, and thus, don’t need to dip into your savings. That item that you want so badly that you’re willing to sacrifice your savings account for will feel less desirable if you shop with intentionality and only buy what you have on your list.
3. Tell others about your goals and have them help remind you – this one is great, especially if you can build up a supportive community and surround yourself with positive encouragement. Sometimes all you need is a family member to say, remember why you’re doing this? Or a friend to say, don’t buy that, it’ll ruin your savings plan. Trust me. Little comments like this go a long way. 
4. Create a fun savings challenge – using a savings tracker to visualize your goal is incredibly helpful at staying on track. I mean, you can’t un-color something you already filled in! Seeing your savings grow consistently is a great way to keep on track and keep yourself motivated.
5. Carry cash – you can’t spend what you don’t have. We tend to overspend when we have credit cards on hand, because we don’t see the money right away. This leads to overspending and makes it more likely for you to dip into your savings. Bring cash and you’ll only ever be able to spend what you have on you, keeping your savings right where they are.
6. Understand your spending triggers and avoid them – what is it that causes you to want to buy and overspend certain things? Most of us have shopping triggers (mine is promo emails with discounts on items I want). Removing these triggers (like unsubscribing from all of those emails) can be incredibly beneficial at keeping your spending down and your savings up! Try to track down your own triggers and remove as many as you can. Maybe you suggest other meeting locations with your friends than the mall, or maybe you change your route to work so you don’t go past a McDonalds every day. Find what works for you and make it happen!
7. Have someone you trust change the password – I would consider this one a bit extreme, but it does work. Create that savings account in a completely separate bank from the rest of your accounts, and then have someone you completely trust change the password. Now, you can’t get in. And if you can’t access the money, then you can’t spend it! 

Money Saving Tips and Tricks

What are some other ways to help you keep your goals in mind and start to automate savings?

1. Celebrate Milestones – giving yourself little treats every time you accomplish a milestone is a great way to stay on track. Maybe you get to treat yourself to an ice cream cone for every $200 saved, or once you save a certain amount for a vacation you can splurge a little and get a nicer place to stay. Looking forward to these little things is a great way to keep your automated savings where it is and not splurge it on unnecessary expenses.
2. Dream of your future – where do you see yourself in 10 years? 20? Will these savings help you get there? Think of early retirement or fulfilling a dream of yours. Your future self will thank you for automating your savings today and making those things happen.
3. Create a Realistic Plan – say you want to save for a new car. How much do you need? $30000? You set your savings up for $5 a week. To reach $30,000 would take 115 years. Be realistic about your goals, your savings, and how much you can afford. When a goal feels hopeless, it becomes much harder to accomplish. If you can’t save the amount you would need now, it’s still better to start with a small amount and just get those savings automated and growing.

Conclusion

Automated savings are absolutely one of the best ways to consistently and regularly save for your financial goals. With the mindlessness of the hands off approach, your money will be growing in no time! I use automated savings for pretty much all of my savings goals. Once my accounts are set up it is completely effortless from that point forward. 

We encourage you to grow your savings through an automated system to help accomplish your goals. So what are you waiting for? Click off this page, create your savings account, and embark on the wonderful and exciting journey that is automate savings.