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Automate Your Savings and Secure Your Financial Future

Automate Your Savings and Secure Your Financial Future

Jenius Bank Team12/11/2023 • Updated 4/4/2024
Woman setting up automatic savings transfers on her phone.

Automating your savings may help you achieve your goals faster.

Setting money aside and building your savings is a simple practice that may help you achieve long-term financial wellness. While you may set money aside whenever you remember to, there’s an easier way that may lead to greater returns. You could automate your savings and let your balance grow steadily month-over-month.

Interested in automating your savings? It’s easier than you think.

Key Takeaways

  • Automated savings may help you reach your savings goals without having to remember to manually transfer money between accounts.

  • You’re usually able to automate contributions to each savings account you have, even if the accounts are at different banks.

  • You determine the best savings schedule for your needs, budget, and goals.

What is Automated Savings?

Automated savings is a bit like having a financial fairy godparent. You set up transfers once and boom – your money stashes itself away, making your future self do a happy dance. It’s the ultimate “set it and forget it” for building your own little treasure chest without having to remember to make manual transfers to your savings account.

How to Set up Automated Savings

To automate your savings, decide how much money you want to transfer to a dedicated savings account and how often. Once you determine your contribution schedule, set up recurring transfers to your savings account. Your bank takes care of these transfers on your behalf, so you don’t have to worry about remembering to set money aside.¹

You may choose to automate your savings for a short time to help you save for a specific goal, such as building a wedding fund or saving for a down payment on a house. Or you may use this strategy for long-term goals, such as saving for retirement.

Benefits of Automated Savings

Keeping track of your savings takes a lot of time and energy that you could spend pursuing other interests. But there are more benefits to setting up automated savings than just freeing up your time.

  • More Convenient: Automated savings grow whether you’re thinking about it or not. There’s no need to set reminders or keep track of the contributions you’ve made. Think of it as a contract with your future self – an agreement to regularly put your earnings into a savings sanctuary. If you want to break this contract, you have to intentionally stop the transfers.

  • Contribute to Multiple Savings Goals: Setting up several savings accounts may help you keep your rainy day savings separate from your emergency fund or vacation fund. Automating the contributions to each savings category may make meeting your savings goals easier.

  • Lowers Risk of Impulse Spending: Stashing some of your earnings in a dedicated account is like placing it with a financial guardian, shielding it from impulse spending (unless you’re putting it in your splurge fund of course).

  • Grows Your Wealth: You may use automated savings as long as you like. Bonus - the longer you contribute to your savings, the more your wealth may grow.

Tips to Automate and Grow Your Savings

This set-it-and-forget-it method may take the stress out of building your savings. Here are a few tips to help you make this saving strategy a success.²

Make Saving a Priority

Building any type of savings requires getting into the right mindset and taking steps to make saving a priority in your daily life.

When you create your monthly budget, include it as a necessity rather than an optional expense.

As you build your savings, try to avoid dipping into them unless you’re using the money for its dedicated purpose. Leaving funds in your account allows it to accrue more interest and may help you reach your goal faster. Be sure to monitor your progress as you go to help you stay motivated and make any necessary adjustments.

Choose the Right Savings Account

Automated savings may help grow your wealth without having to think about it. But it’s important to do your research and set yourself up for the best growth possible. Before you set up your first deposit, make sure you have the right savings account in place.

Look for an account that earns a competitive rate, as this may help your wealth grow faster than with your contributions alone. As you search for an account, be mindful of any fees, minimum balance requirements, or other restrictions that could reduce your savings over time.

Set up Automatic Transfers

Automatic transfers are the heart of this savings method. There are two primary ways to go about this, including:

  • Transfers Between Checking and Savings. Start by linking your savings and checking accounts, then set up recurring transfers between the two. You should be able to do this through your bank’s online banking system.

  • Splitting Your Paycheck. If you receive your paycheck through direct deposit, you may be able to modify how your funds are deposited. Talk to your company’s payroll specialist and let them know you’d like to have a certain amount of your paycheck sent to your savings account. They should be able to help you set everything up.³

Adjust Your Savings Plan as Needed

Though automated deposits let you set and forget your savings, that doesn’t mean you shouldn’t revisit your savings plan over time. Remember, your financial situation is dynamic and changes regularly. There may be times when you need to reduce what you’re contributing each month to free up money to cover your expenses, but there may also be times when you could up your saving game.

Get in the habit of monitoring your savings progress each month and reviewing your savings plan at least once every six months or every time you receive a raise at work.

Final Thoughts

Building a savings fund, whether you’re saving for a short-term goal like a vacation, establishing an emergency fund, or saving for retirement, is always a good idea. Automating your savings may take some of the stress out of the process.

In addition to recurring transfers, one of the best ways to maximize your savings is to choose the right savings account for your goals. Learn how to choose a savings account that fits your needs and may help you grow your wealth more quickly.

Saving & CheckingMoney Management