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December 29, 2021
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Easy Ways to Save Money
Humans are funny creatures. Just because a person knows something is good for them, there’s no guarantee they’ll actually do it. That’s why learning how to automate savings can help turn good advice—“Save money”—into good habits.
It seems obvious that putting money away to spend later is a wise tactic. Whether it’s pulling together an emergency fund to cover an unexpected financial need, stowing away cash for a splurge like a vacation, or working toward long-term financial goals, saving is a sound endeavor.
And yet many Americans put very little money away. Though the personal saving rate was up dramatically during the pandemic, for years it hovered around 7%. This means that, on average, Americans have been putting away roughly 7 cents of every dollar of income earned.
When it comes to saving money, lots of things can get in the way: routine bills, an unexpected big night out with friends, a shopping splurge, or simply forgetting to move money into savings.
But by taking some of the human element out of saving money and using an automatic savings app, it may be possible to overcome some of the obstacles that make it hard for people to save.
Setting up automated savings takes the thought out of saving money, so that instead of having to overcome temptation and make the responsible choice again and again, some of the decision-making around doing so is reduced or eliminated.
Automating savings also reduces the amount of time an individual has to spend each month on tasks like paying bills and other aspects of routine financial management. Furthermore, by eliminating barriers to saving and reducing the pain of putting away money routinely, learning how to automate savings may even help some people achieve their financial goals faster than leaving it all to be done manually each month. After all, procrastination and instant gratification can be powerful forces to overcome—and for some people, they can often stand in the way of growing savings.
The Benefits of Automating Your Finances
Automating finances can not only be a smart money move, it could also help alleviate some of the stress surrounding payment deadlines. Some benefits of finance automation include helping avoid late fees and sticking to your monthly budget.
Plus, payment history makes up 35% of your credit score, so automating your finances could be a good way to stay on top of things. Set up SoFi Relay to track your spending, monitor your credit score, get payment reminders, and more.
Deep Dives from SoFi Learn
Easy Ways to Save Money Saving money can bring security, freedom, and fun. Here are easy ways to save money each month. Read more >> How Much of Your Paycheck Should You Save? Not sure how much of your paycheck you should save? We’ll help you figure that out—and give you tips for what to do with it! Read more >> Savings Goals by Age: Smart Financial Targets by Age Group Understanding financial milestones at every age can help you build a financial plan and put you on track to meet your savings goals. Read more >>Financial Planner Tip of the Day
"What’s one easy way to make saving money a regular habit? By paying yourself first. Within a few days of that paycheck hitting an account, a saver could transfer a percentage of that money directly into their savings."
Brian Walsh, CFP® at SoFi