Saving Automatically Is Saving Made Easy

Setting up an automatic savings plan is kind of like that oven, you know set it and forget it. See how simple it is to set up an automatic saving plan .

It can be hard to put aside money for savings, but there is an easy way to save money without ever missing it by making your savings automatic in 2018. Already saving automatically? Find ways to automate other aspects of your financial life this year!

How to Create an Automatic Savings Plan

Redirect Part of Your Paycheck From Checking to Savings, and Then Leave It Alone

Do you have a savings account, yet find it difficult to find money to deposit into it? Do you have the best of intentions every month, but find you don’t have enough left over after you pay your bills to pay yourself in the form of savings?

This isn’t an uncommon problem because I have been there and I know.  Most people do find it hard to save. Generally, when you receive income it is either deposited directly into your checking account, or you make the deposit yourself, either at the bank, through an ATM, or via your phone.Then your money heads straight to your checking account, so it’s available to pay the seemingly endless stream of bills.It’s a vicious cycle, and one that’s hard to break. Fortunately, there is a way to break it: an automatic savings plan.

Why Saving Money Is Hard

You may not realize this (and may not feel that this is the case for you), but most people save money as an afterthought.

When they receive income (whether it’s a paycheck, freelance work, investments or other sources), their money is allocated to bills, groceries, rent or a mortgage. After paying for these expensive items, there may or may not be much left over to use for savings (or for fun). And in this scenario, the only time someone adds money to a savings account is when there’s money left over from paying the bills at the end of the month.

Unfortunately, with this backward thinking, there is almost never any money left over to save.So how do you break out of this pattern?

The Answer: Automatic Savings

When you make deposits into a savings account automatically and regularly, you don’t have to think about it. The money is deposited before you have time to worry about expenses or how much money will be left over. Once you get used to it, you might not even miss the money.

First, you need a savings account. Open one at the bank where you have your checking account if you don’t already have one set up, and make certain your checking and savings accounts are linked.

If you currently have direct deposit through your employer, you will find the easiest (and most effective) way to establish your automatic savings program is to have part of your paycheck directly deposited into your savings account (the rest, as usual, will flow to your checking account to cover your bills). It doesn’t matter if it is $10 or $500 — simply setting this up automatically will ensure you save money every single time you are paid.

If you don’t have direct deposit, there is still an easy option available: set up an automatic transfer from your checking account to your savings account every time you’re paid. For example, if you’re paid every other Friday, you could establish an automatic transfer of a set amount of money from checking to savings to coincide with this deposit. Just make sure you’re aware of when the money will be deducted each month, or you may find yourself overdrawn.

Don’t Touch the Money (Unless You Need It)

This last point could be the hardest: you’ll need to learn to leave your savings in your savings account unless you need it for an unexpected expense. The idea is for you to get used to doing without that cash to cover regular, monthly expenses. If you tap into it every time you run a little short, there won’t be anything left when you really need it. Set up your automatic savings plan and then leave the money alone to grow.

It’s that simple, kind of like that set it and forget it oven. Start you automated savings plan today!

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on Saving Automatically Is Saving Made Easy

  1. Julie
    February 27, 2018 at 11:54 pm (2 months ago)

    Great advice. I like how you explain that the way we normally save money is backwards thinking. I’ve never looked at it like that. I need to work on saving more. I could really benefit by automating it.

    Reply
    • tracie45
      February 28, 2018 at 8:26 pm (2 months ago)

      Yes Julie, automatic saving has saved my financial life. Thank you for reading and commenting.

      Reply
  2. Neely Moldovan
    February 28, 2018 at 9:17 am (2 months ago)

    Yes I tell people all the time to do this. Treat your savings deduction like another bill!

    Reply
    • tracie45
      February 28, 2018 at 8:24 pm (2 months ago)

      This is one of the first things I tell my clients. Make sure you save and if you have a hard time saving, set it up to come out automatically. Thank you for reading and commenting Neely.

      Reply
  3. Taylor Mobley
    February 28, 2018 at 9:46 am (2 months ago)

    Yes! I love this. This is exactly what we do.

    Reply
    • tracie45
      February 28, 2018 at 8:21 pm (2 months ago)

      We do it too Taylor. Thank you for reading and commenting.

      Reply
  4. Peter
    February 28, 2018 at 3:48 pm (2 months ago)

    Saving has always been the bane of my existence. My wife is much better at it than I am

    Reply
    • tracie45
      February 28, 2018 at 8:19 pm (2 months ago)

      I think my husband would say the same thing Peter. I am the better one when it comes to the finances so he has no choice than to save. Thank you for reading and commenting.

      Reply
  5. Scott
    February 28, 2018 at 4:15 pm (2 months ago)

    We’ve always mentioned this trick to those who don’t seem to be able to save on their own. Fortunately we’ve always been very good at saving, living well below our means!

    Reply
    • tracie45
      February 28, 2018 at 8:18 pm (2 months ago)

      It is really a helpful trick Scott, for those that have a hard time saving. Thank you for reading and commenting.

      Reply
  6. Catherine Sargent
    February 28, 2018 at 4:42 pm (2 months ago)

    I am going to start doing this. I always say that I need to start saving more money and I never do.

    Reply
    • tracie45
      February 28, 2018 at 8:08 pm (2 months ago)

      I know exactly where you are coming from Catherine. Saving used to be so hard for me, but when I learned this technique it really began to work out for me. Thank you for reading and commenting.

      Reply
  7. CourtneyLynne
    March 1, 2018 at 7:23 am (2 months ago)

    Oooo some really helpful advice here!!!! It’s so important to save!!! The sooner you start, the better that’s for sure!

    Reply
  8. Mary Jingjing Mortos Lopez
    March 1, 2018 at 7:27 am (2 months ago)

    good pointers! saving is hard especially with all the house responsibilities and the sort. Auto save is one good plan!

    Reply
    • tracie45
      March 1, 2018 at 5:31 pm (2 months ago)

      Saving can be extremely hard Mary. Having an automated saving system really helped me and my husband a ton. Thank you for reading and commenting!

      Reply

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