Automated Savings: An Easy Way to Kick-Start Your Savings Fund
Technology is our friend, so have you given automated savings a try yet?
We’re all well-acquainted with technology. Smart phones, the internet, tablets and more, we all make use of it every day! But are you using automated savings to your advantage when it comes to your finances?
In an earlier post, I gave some tips for hashing out a budget for beginners. Part of that strategy is the ability to save, even a bit, every month. For a lot of people, that can be very difficult. Often, it’s very tempting to spend that extra $50 on a night out with friends, or a new piece of clothing. This is where the power of automated savings really come in handy.
It’s like the old saying goes: you can’t miss what you never had…
Now, let me explain what I mean by automated savings. I’m sure most of you are familiar with your bank’s online / mobile banking application (if not, let me know and I maybe I could write more about them). You’re able to set up bill payments, check balances, transfer funds and so forth. When it comes to transferring funds, I just have one thing to say:
Automate those transfers!
Automate all of them. Automated bill payments, automated (savings) transfers, just go ahead and automate all of your recurring / planned transactions. The idea here, is that you never have the choice to ponder between funding your emergency fund or taking the significant other out for dinner. Automated savings will make the choice easy for you. You can’t miss what you never had!
Split Your Pay Cheque
Another trick you might try is for those of us that have direct deposit of our pay cheques from work. Some employers might allow you to split your deposit into multiple accounts. This is ideal for people looking to build up a TFSA (which I highly recommend if you don’t already have one!) or other external savings account. Again, since the money never lands in that chequing account, you’re never tempted to spending it.
Although it might seem a bit harsh at first, deliberately cutting yourself off from “much-needed” money each pay, don’t fret. One thing you notice with automated savings and developing a budget is the amount of money that can be spent mindlessly/wastefully.
Pinching off a meager $50 or $60 bucks each pay likely won’t starve you (although, we all have different situations…this is why developing your own budget is so important!).
My experience using automated savings strategies
In terms of my own automated savings experiences, I’ve used it with great success, and believed it helped to get myself out of debt. I’ve set up my chequing account to automatically withdraw a set dollar amount each payday and deposit it in my TFSA. It’s great too, because it allows you to stay on target to your savings goals, and you can project how much money you’ll have saved at any given time in the future.
If you’ve never tried saving, or are just starting out, the key is to not give up and persevere. I think a lot of people think that they need to put away huge sums of money each time they make a deposit, which really isn’t the case! It will build over time. Patience (and consistency) is key when trying to save money.
Have you tried any automated savings strategies to reach your savings goals faster? Let us know in the comments below!
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