In 2016, Australian households spent over $666 billion on general living costs including things like food, cars, beauty, fashion and fun. Per household, this adds up to a whopping $70,000 a year – so it’s no surprise that some of us aren’t getting anywhere with our savings!
For those having a hard time knuckling down a solid savings plan, automation could be the answer. Whether it be putting in place a retirement savings plan via a direct payroll system, or saving for a holiday through a smartphone app – there’s a whole host of ways that automation can help you reach your savings goals.
What is automated saving
Essentially, automated saving is a way to make sure you save. You can set up your bank account, or even your pay at work to automatically move a portion of your earnings into your superannuation account or savings account before you even see it.
Another example of automated saving is a feature that ING bank uses, where they round up your daily purchases to the nearest dollar and put the rest straight to savings!
How does it help? Put simply, it means that you pay yourself first, instead of paying everyone else first. The money you would typically spend on things that you want isn’t dangling in front of your eyes, so your savings are forced to increase.
What are the benefits
Setting up automated saving is both quick and easy to do. It only takes 5-10 minutes to set everything up with the bank, and at work – it should only be a matter of sending an email to payroll.
It’s convenient and takes the hard work out of saving. When your pay is deposited into your account, it’s automatically transferred to your savings, so you don’t have the hassle of transferring money every time you get paid.
Automated saving takes matters out of your hands. If you’re generally tempted to spend your pay, instead of putting it aside for a rainy day, your savings account is never going to grow. But with automated saving, you no longer have to rely on your own financial discipline to ensure that your savings keep growing.
It’s also important that your savings account works hard for you on top of automated saving. It’s great if the same amount of money gets put into the account every week, fortnight or month, but you could be doing so much better! Ensure you have an account that earns interest, preferably interest that increases relative to the amount in your account.
How can it help you – Plan your Life Goals
Anything that helps Aussies engage with their money more productively is a good thing, but in short, it will help you achieve your financial goals. Without even having to lift a finger, you will reach your financial goals before you even know it.
So, give automated saving a go and see whether it works for you. At the end of the day, you can always make changes down the track, or switch it off if it doesn’t work. To find out more about how to make your money work with you, contact the expert team at Rising Tide Financial Services today.