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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 11/27/2024
Woman setting up automatic savings transfers on her phone.
Automating your savings may help you achieve your goals faster.Routine saving is a simple practice that could help you achieve financial wellness. You should pat yourself on the back any time you can contribute to savings. But if you’re able to save consistently, it may help you achieve your goals faster and feel more secure about your future. Automating your savings is a way to get on a savings routine.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 Saving?

Automated savings, sometimes called automatic savings, is simply the act of setting up automated transfers to a savings account in defined amounts and time periods. If the automated transfers are left untouched, for each designated time period, money “magically” moves into your savings account .

Should You Automate Your Savings?

If you’re interested in growing your savings in a convenient way, automating savings may be the way to go. When saving is automatic, it becomes a routine and that may help you reach your financial goals faster. You’re in charge of how much is transferred. This means you could create an automatic savings plan that works with your budget and adjust it as needed.1Automated savings also reduces the mental load of saving—no need to remember to make transfers. And it’s less work for you… for a year’s worth of savings, you set up one automated transfer instead of 12 manual ones.And if you’re feeling really smart, you could set up transfers to multiple savings accounts. Say you’re trying to save for a vacation but also want to build an emergency fund. If you have separate savings accounts for each purpose, you could set up transfers to each account. Talk about efficiency!

How to Set up an Automatic Savings Plan

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 remember.2You 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. You may also use this strategy for long-term goals, like saving for a down payment or even to supplement your 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: As we mentioned, automated savings happen whether you’re thinking about it or not. There’s no need to set reminders or keep track of the contributions you’ve made. Consider it as a contract with your future self – an agreement to regularly pay yourself. If you want to break this contract, you must intentionally stop the transfers.
  • Contribute to multiple savings goals: It’s so good, we want to say it again. 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 your hard-earned money with a financial guardian, shielding it from impulse spending (unless you’re putting it in your splurge fund of course).
  • Grows your wealth: You’re free to use your automatic savings plan for as long as you’d like. Bonus - the longer you contribute to your savings, the more your wealth may grow.

Tips to Automate and Grow Your Savings

Here are a few tips to help you make this saving strategy a success.

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 them 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 you grow your wealth without having to think about it. But it’s important to do your research and make sure you have the right savings account in place.Look for high-yield savings account (HYSA) because these accounts tend to earn the most competitive Annual Percentage Yields (APYs) or rates. With a higher rate, your wealth could grow even faster. 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 and then set up recurring transfers. Since the goal is saving, then you’ll want to set up the transfers from checking to savings. Most banks will allow you to send funds to a savings account at another bank too.
  • Splitting your paycheck. If you receive your paycheck through direct deposit, you may be able to send some funds directly to savings. Talk to your company’s payroll specialist. They may be able to help you set it up.3

Adjust Your Automatic 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. There may be times when you need to reduce what you’re contributing, but there may also be times when you could up your saving game.Monitor your savings progress each month and review your savings plan at least once every six months or every time your financial situation changes.

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.
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