THE BROKEN WALLET

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What does it mean to automate your savings, and how do you automate?

I can’t stress the importance of a regular, consistent savings schedule. A savings account provides greater security by breaking the cycle of living paycheck to paycheck.

Saving early in life can also provide a healthy retirement. And when you pay yourself first, you can build an emergency fund for the unexpected.

But while most people agree that saving should be a priority, there are challenges to saving money.

Some feel they don’t have enough disposable income to save, and others simply forget. However, saving money is an aspect of financial planning that you shouldn’t overlook. 

READ: How to Save Money on a Low Income

What are your options if you can’t get your account off the ground? Here are a few easy, painless ways to automate your savings like a pro.

1. Set up automatic transfers to automate your savings

One of the best and simplest ways to automate your savings is to set up automatic transfers from your checking account to a savings account on a regular schedule. This is perfect when you’re not disciplined enough to transfer funds manually. 

With your savings on autopilot, you choose a day of the month to schedule transfers. Once they’re scheduled, money moves into your savings account without you having to do anything. 

You can set up weekly transfers, biweekly transfers, or monthly transfers. As a tip, set up transfers to coincide with your direct deposit or paycheck.

2. Split your direct deposits

If you receive direct deposits from your employer, ask about splitting your deposits into two separate bank accounts.

First, decide how much to save each pay period. If possible, aim to save at least 5% of your take-home pay.

Direct deposit this percentage into your savings account, and then direct deposit the remainder of your pay into a checking account for everyday expenses.

3. Automate your savings using micro-savings app

Apps can also make it easier to save and invest your money. One of my favorites is Acorns, which I’ve been using for over three years. I stumbled on this app by accident. And admittedly, I was skeptical at first. But I gave it a try, and I’m so glad I did. I’ve been able to automate my savings and save thousands – without even trying. 

This is how it works: Open an Acorns account and then link your debit card or credit card to this account. Whenever you use your linked credit or debit card for purchases, Acorns will round up these purchases to the nearest dollar and invest the difference into a diversified portfolio of ETFs. But this isn’t the only feature.

You can also schedule one-time and regular transfers (as little as $5) into your Acorns account, perhaps on a weekly or bi-weekly basis. 

The app also has a “Found Money” feature. You’ll earn cash back when you shop with retail partners, which Acorns also saves and invests for you. If you’re ready to put your savings and investment strategy on autopilot, click here to sign up.

VIP: Get $10 when you sign up for Acorns

4. Use your bank’s savings tools

Another option for automating your saving is opening an account with a bank that offers a savings program or tools. Some banks have a program where they’ll round up debit card purchases to the nearest dollar and deposit the difference into your savings account. Or for every debit card transaction, the bank transfers $1 from your checking account to your savings account.

Also, consider opening an account with online banks that have high-yield savings accounts or a savings builder program. One example is the Savings Builder account through CIT Bank. This account features a higher interest rate, allowing you to earn more than the national average. Click here to open an account.

You can open a CIT Bank savings account, and then set up automatic transfers into your account each pay period.

Related: CIT Bank Savings Builder Review: Earn More and Grow Your Savings