How to automate your savings: 5 simple tips

Saving money on a regular basis is one of the keys to establishing a solid financial future, but it takes time and practice. However, automating your savings can help you “set it and forget it,” so you can build your savings faster and stick to your goals.  

Why you should you consider automating your savings 

Automating your savings means transferring funds from one account to another automatically, typically on a set schedule. Thanks to technology, there are many different approaches you can use, from depositing a portion of your paycheck into a savings account every week to rounding up “spare change” from every debit purchase into an IRA. The most effective strategies don’t require you to do anything once they’re set up, aside from changing the schedule or amount you want to save.  

Manually adding funds to a savings account takes effort, and it can be hard to resist the temptation to spend your paycheck once it hits your account. However, when you automatically direct a recurring deposit into a savings account, you may be more likely to stick to your savings goal. Then, all you have to do is sit back and watch your nest egg grow.  

5 ways to automate your savings 

If you’re ready to start making saving second-nature, check out these easy ways to watch your dollars add up and transform the way you think about saving money for both short-term and long-term goals. Here are five ways to put your savings on autopilot.  

1. Send a portion of your paycheck to savings 

Taking money from your paycheck before it even hits your account is one of the best ways to automate your savings. If you get paid through direct deposit, meaning your employer transfers your paycheck electronically into your account on payday, you may be able to split up where the money goes.  

Some employers let you add multiple accounts for deposit and designate how much goes into each account. So you could, for example, designate 80% of your paycheck into your regular checking account and 20% into a high-interest savings account.

Even if your employer doesn’t offer this option, most banks let you schedule transfers, so you can set up your own automatic deposit from your checking account to a savings account on payday.  

2. Take advantage of apps 

Many apps allow you to set up automatic savings or investment accounts. For example, you may be able to schedule transfers into interest-earning savings accounts, college savings accounts, retirement accounts, or even stocks, bonds, and bitcoin. Look for apps that offer flexibility, like the ability to transfer small amounts or round up spare change.  

Some apps may charge a nominal fee for this service, but you may be surprised how quickly investing $25 weekly adds up—all without needing to lift a finger. When comparing apps, look for companies that offer extras, like bonus cash when you refer a friend to the app or hit certain milestones. Some apps also allow you to choose the types of companies you want to invest in, so you make investments that align with your financial goals.  

3. Save your spare change 

Although you might not have an actual change jar in your kitchen anymore, you can still find ways to save your “spare change.” Many banks and other financial platforms offer the option to round up debit purchases and put the extra change into a savings account. For example, your bank may round up every debit purchase and put the change into a connected savings account.  

You can also link an account to an app that offers round-up savings. In some cases, you can round up with multiple financial institutions and boost your savings even more. For instance, you may have both your bank and an app rounding up your spare change. So if you make a $1.50 debit purchase, both your bank and the app deposit $0.50 into a savings account, and you end up with $1 saved. 

4. Set up savings goals 

Whether you’re saving for a rainy day or a dream vacation, automating savings into specific accounts or categories within an account can help you meet your goals faster. It can also help ensure the money you save for emergencies doesn’t commingle with the cash you're setting aside for holiday spending. You can use separate accounts to split up your goals. Or look for accounts and apps that let you set up “savings buckets.”  

Depending on the app, you may be able to customize the name of the bucket and set your savings goal, end date, and deposit amount. Some apps even let you schedule how you’d like an automated deposit split among the buckets. For instance, if you transfer $100 into a savings account every month, you can designate 20% to a vacation fund, 30% to a car down payment goal, and the remaining 50% to your emergency fund.    

5. Contribute to employer retirement plans 

Many employers let you automatically contribute to a retirement fund, health savings account, or flexible savings account. In some cases, your employer might even match a percentage of your deposit—which is like getting free money every time you make a deposit. Money may also be taken from your paycheck before taxes, which can help you save even more in the long run by lowering your taxable income.  

Check with your employer to understand your options and get your contributions set up. If you’re already set up for automatic contributions, but haven’t hit the maximum allowable amount, consider adding more.  

The bottom line 

Your financial future is up to you, but having a disciplined mindset for saving is your first step. Automating your savings can help you keep your savings goals on track. Look carefully at your budget to see how much you can put toward your savings goals while still staying on top of your day-to-day expenses and debt obligations.  

Make sure you’re living within your means, and look for any extra expenses you can trim from your budget to put toward savings or paying down debt. If you have a lot of debt, you may be able to pay it down faster by using the debt avalanche or debt snowball method. Or consider rolling high-interest credit card balances into a debt consolidation loan.