We know we need to save but a lot of us are not good at saving. Or we have good intentions to save but then turn right back around and dip into our savings account because we have an emergency – like a fashion emergency! I mean, when a dress or a pair of shoes goes on sale, we NEED to buy them. This was the vicious cycle that kept depleting my savings account and never gave me the security I needed to be able to pay for things in cash.
The truth is that it often feels like saving money can be tough. We are just trying to pay our bills and get a handle on our debt, let alone have anything left over for savings. It’s also not as fun to save as it is to use the money for entertainment and trips. But it’s also not fun to have life happen, like a job loss or an extended illness or a major car repair, without having a safety net to fall back on.
One of the biggest mistakes people make when creating their savings account is trying to determine where to keep their money. I hear people stating that they don’t want to leave it in a regular savings account or a money market account because it won’t make much interest. I have news for you: it’s not supposed to making money. Those funds need to be sitting in an account that is as safe and boring as can be and that you can access easily. Think of your savings account as insurance for short-term, day-to-day life hiccups.
Start small with your savings goal. Think of a purchase that you would like to work towards. Even saving an extra $20 or $50 a month is a great way to begin building your savings account. When you start with a small savings goal, you will be able to reach the finish line quickly. This will build your motivation to continue saving and to set another savings goal. Soon you will be looking for ways to cut spending out of your budget or pick up a side hustle to add to your savings account.
The way to make your savings automated is to save conscientiously. This means you need to be intentional and purposeful about setting money aside. Put savings as a line item in your budget like you would food, rent, or utilities. You deserve to pay yourself first! Making your savings part of your budget mean you are making savings a priority. Put your budgeted savings amount on auto-transfer to your savings account. If you work for a company, check with your HR department to see if you can set up your budgeted savings amount can be directly deposited into your savings account when you get paid.
Another great way of automating your savings is to save your loose change. Every time you get change back from using cash, put the loose change in a designated spot – a bucket, a jar, or some other container. When the container is full, take the loose to your bank or a Coin Star location and cash in your savings. You can use those savings for a planned purchase or to go directly to your savings account. It’s amazing how the savings can add up!
Beginning and automating your savings is the gateway to managing your money more effectively and have it become a habit, a way of life. Once you have your savings on auto-pilot, it will become part of your day-to-day money life and you will reap the benefits of having extra security in the bank.
What are some ways you automate your savings?