Saving money is an important aspect of financial health. However, it can be challenging to put aside money consistently, especially if you have other financial obligations like rent, bills, and debt payments. One way to make saving easier is to automate the process. Automating savings means that you set up a system to save money automatically so that you don’t have to remember to transfer money to your savings account manually. Here are some tips on how to automate savings from your paycheck to put some money in the bank.

1. Set a savings goal Before you start automating your savings, it’s essential to have a savings goal. Having a goal will help you determine how much you need to save and how often. Your goal could be anything from saving for a down payment on a house to building an emergency fund. Once you have a goal, you can calculate how much you need to save each pay period to achieve it.
2. Choose a savings account The next step is to choose a savings account. Look for an account that offers a high-interest rate and low fees. You can choose from online banks, credit unions, or traditional banks. Make sure to read the terms and conditions carefully, so you know the account’s minimum balance requirements, interest rates, and fees. My family uses Sofi Bank for some of our savings. At the time of this writing, Sofi Bank is paying 1.60% on Check and Savings accounts. Direct deposits receive higher rates on savings.
3. Set up automatic transfers Once you have chosen a savings account, you can set up automatic transfers from your paycheck to your savings account. You can do this through your employer’s payroll system or by setting up automatic transfers through your bank. Choose an amount to transfer each pay period that will help you reach your savings goal. It’s essential to choose an amount that is realistic and won’t cause financial stress. My family started this with each paycheck, saving $20 per check ($80 per month). When we learned we could tolerate this, we increased it to $25 per check. We continue to do this on a regular basis, as our tolerance can handle it.
4. Consider a retirement plan If your employer offers a retirement plan, like a 401(k), consider enrolling. Retirement plans are a great way to save for your future and can be automated so that contributions come out of your paycheck before you even see the money. Some employers even offer matching contributions, which means that they will match your contributions up to a certain percentage.
5. Use an app There are many apps available that can help you automate your savings. These apps can help you set up automatic transfers, track your spending, and monitor your progress towards your savings goal. Some popular savings apps include Digit, Qapital, and Acorns.
6. Create a budget Creating a budget is an essential part of financial health. It can help you identify areas where you can cut back on spending and allocate more money towards savings. Once you have a budget in place, you can set up automatic transfers to your savings account based on the amount of money you have left over after paying your bills and other expenses. Contact me to schedule a 1 on 1 call to help with setting up a budget. This can be really scary to do the first time…especially if you have NEVER set up a budget. I am not a financial planner. I am just a guy offering to help you out with setting up a budget.
7. Review your progress It’s essential to review your progress regularly to make sure you’re on track to reach your savings goal. You can use an app or a spreadsheet to track your progress and make adjustments if necessary. If you find that you’re not saving enough, you can adjust the amount you transfer each pay period or look for ways to cut back on expenses.

In conclusion, automating your savings is an effective way to save money consistently without having to think about it. By setting up automatic transfers, enrolling in a retirement plan, using a savings app, creating a budget, and tracking your progress, you can achieve your savings goals and improve your financial health. Remember, saving money is a habit, and the more you do it, the easier it becomes. Start automating your savings today and watch your savings grow!

Success Story: I won’t get into the specific details, but I re-tooled our family’s savings strategies last year. We have been able to pay for expenses (that have in the past required us to use credit cards) with cash from the different savings buckets that we have started filling from every paycheck. It adds up quickly, but the most important thing you can do is to START!