Setting up an automatic savings plan is a simple one-time step that will change your saving habits forever.
Do you have the goal of saving every week or month? Does the end of the month come around with a lot of bills and not enough to save? Setting up an automatic savings plan places your future self first – not last. Always pay yourself first. By paying your bills before yourself you are putting your current spending before your future self and sabotaging your saving goals.
Start paying yourself first by doing these three things:
- Open a separate savings account (there are free options with all the major banks)
- Calculate how much you can and should save
- Set up an automatic withdrawal for the day after you get paid for the amount calculated in step 2
- Bonus step – don’t even think about taking money out of that savings account
Now sit back and watch your savings grow every pay cheque.
Not convinced changing the order of operations will make a difference?
Humans are hugely susceptible to inertia. If you aren’t saving it takes a lot of energy to start. However, use that to your advantage. Once you set up an automatic savings plan that same inertia will keep you savings. This is the laziest way to get your money to grow – by doing nothing you are saving!!
“Nothing happens until something moves.” – Albert Einstein