In his book Atomic Habits, author James Clear discusses the potential that building small habits can have on our lives. He says that change doesn’t occur overnight, but instead happens through the gradual accumulation of small, consistent actions that we do without thinking.
He says that by building habits into your routine you can accomplish more, by focusing on less.
So what could you apply this to? Well, anything that can be seen as a big mountain to climb – for example, learning a new language, getting fit or… saving money.
Saving money is a task that many people find challenging. It’s easy to see why. Life is full of financial demands, and it's easy to forget or procrastinate when it comes to setting money aside for future goals.
However, automating savings can make the process significantly easier and more effective.
In this article, we'll explore why automating your savings is an excellent strategy for achieving your financial objectives and how we can help you make the most of this approach.
One of the most significant advantages of automating your savings is the consistency it brings to your financial life. By setting up automated transfers from your checking account to your savings or investment accounts, you ensure that a portion of your income is saved regularly, without having to remember to do it manually. This consistent approach can help you build your savings steadily over time, regardless of how busy or forgetful you may be.
Procrastination is a common roadblock to saving money. Many people intend to save but often find reasons to delay or avoid the task. Automating your savings eliminates this hurdle. Once you set up automatic transfers, your savings occur automatically, reducing the temptation to spend the money instead. This proactive approach helps you overcome inertia and ensures that your financial goals are prioritised.
Automating your savings can be particularly powerful when it comes to long-term goals, such as retirement or buying a home. By consistently contributing to your investment accounts, you give your money more time to grow through compound interest. This means that not only are you saving regularly, but your savings also have the opportunity to earn returns on their own, leading to accelerated wealth accumulation.
Human emotions can sometimes lead to irrational financial decisions. When you automate your savings, you remove the emotional aspect of the process. You're less likely to be swayed by short-term market fluctuations or impulsive spending desires.
Whether your financial objectives are short-term (like an emergency fund) or long-term (like retirement), automation can be tailored to meet your specific goals. We can help you create a savings plan that aligns with your objectives, and with automation, you'll make steady progress towards achieving them.
Automating your savings doesn't mean you set it and forget it. Regularly reviewing your automated savings plan allows you to track your progress, make adjustments as needed, and stay on course to meet your financial goals.
In today's fast-paced world, automating your savings is a smart and efficient way to ensure your financial success. By embracing this strategy, you can build consistency, overcome procrastination, and work toward your goals with minimal effort - or in James Clear’s words, accomplish more, by focusing on less.
So, take the first step towards financial security and peace of mind by automating your savings today. Your future self will thank you for it.
You can book an online meeting with one of our advisers at your convenience here.
