One of the best (and easiest) ways to save money is by making it happen automatically. Remove the human from the process, and things happen a lot more smoothly.
When I first started automating our savings, I didn’t trust it – I was convinced I’d “forget” and overspend without noticing.
Six months later, I barely thought about it, and the balance had grown more than any amount of willpower ever managed on its own.
If you’ve ever struggled with saving money, these tips for automating your savings should help.
1. Set rules for different income streams
Setting rules for where each income stream flows can be helpful when you’ve got more than one savings goal.
For example, overtime or bonuses go towards retirement savings while side hustles or paid survey income goes towards a holiday savings fund.
A vacation fund could be fully financed by selling unused items in your home, especially if you do your vacation on a budget.
I find this technique helpful, especially when I’m doing lots of extra jobs and side hustles to bring in income – it stops “bonus money” from just quietly disappearing into everyday spending.
2. Set an automated bank transfer to align with your pay cycle
Talk to your bank about setting up an automatic transfer to a savings account as soon as your pay hits the account. This technique is one of our top frugal living tips.
Do this for long enough, and you won’t even notice it gone – but you sure will appreciate the growing savings balance.
Ours is set for the morning after payday, so it’s the first thing that happens before I’ve had a chance to “just quickly” order something online.
3. Increase your retirement contributions automatically
Most retirement savings schemes — whether that’s an employer pension, a 401(k), superannuation, Kiwisaver or similar — let you set an automatic annual increase to your contribution rate, often by just 1% a year.
It’s an easy way to grow your retirement savings without ever feeling a pinch in your day-to-day budget, since the increase usually lines up with a pay rise.
Worth checking whether your provider offers this option; it took me two minutes to set up and I haven’t thought about it since.
4. Use a cashback credit card (carefully)
Cashback credit cards are a great tool if you are disciplined with credit. Most banks will automatically deposit the cash back onto your card each month, so you get an extra deposit.
I often stack my savings, using cashback sites to get double the cash back.
5. Set your bills to be paid automatically
I like to use a credit card to automate my bill payments, but you can also organise recurring transfers from your bank account.
Either way, automating bill payments will help you save, as you won’t be hit with late-payment penalties.
Putting savings on autopilot is often the first step we make towards better managing our finances. It helps to build discipline around money and is super handy when it comes time to invest in the stock market or real estate, where you need to invest and wait.
More than that, though, it takes saving off your mental to-do list. There’s a real kind of peace in knowing the money’s already moving in the right direction before you’ve even thought about it.
