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Grow Your Money

How to automate saving

I know what you’re thinking, and no, it’s not a robot who swipes a $20 out of your wallet every two weeks and moves it to a piggy bank. Well, it is, kind of. The robot is actually invisible, lives in your bank account and does, in fact, swipe money to store it somewhere else.

Automating saving money is as simple as setting up recurring transfers from your chequing account to savings or, better yet, investment account.  Rather than the money sitting in your everyday account, tangled in your daily spending, your money gets tucked away with a purpose—automatically.

Just like taxes and other deductions, you’ll hardly miss it when it’s gone.

Benefits of automated saving

Save time

It saves you the hassle having to transfer money every single payday. When you automate the saving process, you won’t need to remember when, where, and how much.

Save more

If you’re on a set schedule to save regularly, rather than every so often, you’re more likely to keep saving money. It’s also easier to increase the transfer by an extra $10 here and there.

Stick to the plan

It’s easy to look at your paycheque and decide to keep an extra $50 in your spending account for a friend’s birthday party. Having a recurring and automated sum transferred out makes it easier to stay on track. You’re less likely to overspend before disbursing the funds.

The best approach to automate saving

Step 1: Update your budget

A budget gives a clear picture of where exactly your money is going. When I meet with a member for the first time we take an “inventory” of all their expenses. They’re always surprised at discrepancies between what they think they are spending versus what they’re actually spending. And you will be too.

Step 2: Find the wiggle room

After evaluating your budget, you can determine how much of that surplus to set aside and save for your future goals. You can start small. Be realistic.

Once you’ve taken into account all your expenses, see if there is anything that you can cut back on. Can you live with that fancy morning coffee from your favourite coffee shop only twice a week rather than every day?

Step 3: Create SMART financial goals

Financial goals will be different for everyone depending on your circumstances but saving or investing with a goal in mind will help you achieve financial success. The best way to set financial goals is to be S.M.A.R.T about it.

S – Set specific goals. Know what the money is for.

M – Make them measurable. Money is pretty measurable, so you’re in luck there.

A – Make them achievable. Your budget can help you with this one.

R – Your goal should be relevant to you.

T – You should have an understanding of the time in which you’d like to reach your goal.

Step 4: Direct deposit your Payroll

Direct deposit is the golden rule of automated saving. If your paycheque regularly deposits into your bank account, it’s easier to create recurring scheduled transfers.

Setting up direct deposit is as simple as handing your workplace a void cheque or a pre-authorized payment form.

Step 5: Create an automatic transfer

The easiest part, funny enough, is setting up the scheduled transfer or transfers. You can open a savings account for each goal and customize the name.

Just log in to online banking and open a savings account. You can create a recurring transfer from your chequing to your new savings account.

We’ll help set you up for success

Need help with a step or all the steps? Let’s chat. We’ll help you set up a realistic budget, S.M.A.R.T goals and recurring transfers to savings accounts.

Ruby Ubhi

Ruby Ubhi

Certified Financial Planner, Coast Capital Wealth Management

Ruby has over 13 years of experience in the financial services industry, focusing on financial planning and advice. She holds her CFP® (Certified Financial Planner) Designation. When she’s not working, you’ll find her on her yoga mat or planning her next travel adventure. Follow Ruby on LinkedIn.

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