Ways To Automate Your Savings

ways to automate your savings

While budgeting, planning, and paying attention to your finances go a long way towards helping folks achieve the kind of financial freedom we all deserve, the truth of the matter is that going through the motions and handling the heavy lifting of managing our finances is where most of us drop the ball.

Thankfully though, with the power of modern tools and technology (and a banking and financial system that has fully embraced the internet and mobile applications), it’s now possible to automate your savings and your finances in a way that just wasn’t ever possible before.

Automating your money eliminates a lot of stress, a lot of headache, and a lot of hassle while at the same time practically guarantees that your money will be well taken care of – as long as you strategically set up the automation system to begin with.

Here are some tips to help you hit the ground running.

Save for Emergencies FIRST

According to financial experts, the overwhelming majority of average Americans have absolutely no way whatsoever to cover a $500 emergency should one pop up.

That’s not great news.

With the help of automation, however, you can dedicate a portion of every paycheck (say 10% to 20%) that gets redirected from your traditional savings account or checking account directly into an emergency fund that you never look at and never touch until it hits three month’s worth of expenses.

Funnel Cash to Investments


Another smart move to improve the effectiveness of deciding to automate your savings is to funnel cash specifically into investments at every opportunity, too.

It’s not a bad idea to match the same amount of money you’re sending off to an emergency fund with automated investments (between 10% and 20% of your take-home pay) – but you can also get away with saving 10% to 20% towards an emergency fund until you hit three months of expenses and then diverting that cash into an investment fund once you have your bases covered.

Leverage Direct Deposit

Sure, the overwhelming majority of people getting paid by their employer are taking advantage of direct deposit already but there are still a lot of folks out there dealing with paper checks in the process of going down to the local branch of their bank and depositing those checks in person.

Direct deposit isn’t just faster and more consistent (guaranteeing that you get paid without having to worry about any potential hiccups that can occur with paper checks and brick and mortar banks), but it also allows you to streamline the automation process even more so.

With direct deposit your funds will not only hit your savings or checking account instantly at the same time each and every week, but this will also instantly trigger the rules you set up to automate your savings as well.

You won’t have to worry about moving any money around, you won’t have to worry about making sure all of your different savings and investment accounts are funded, and you don’t have to spend even a little bit of time wondering about whether or not all of your bases are covered.

Automation handles all of that heavy lifting for you!