Commit to Yourself: How Automation Can Help You Save Money

We all have the best intentions when it comes to putting money aside for our various goals. We promise ourselves we’re going to put money aside every week, but then we don’t.

We hesitate because we worry we may need that money immediately. We put it off saving until the next week. Or we just forget to do it. We have so much going on that remembering to add money to our investment accounts becomes an afterthought. We know that $5 or $10 isn’t that much, but when we have to go and physically do it, it becomes, well, manual labor.

Automation is one way to change a nagging chore into a seamless habit.

Recurring Transactions as a Commitment Device

Automatically investing with Recurring Transactions (formerly Auto-Stash) can ease the financial burden of investing tons of money all at once. If you invest small amounts on a regular basis, your wallet won’t feel as much of an impact.

Consider the idea of a “commitment device.” Stephen J. Dubner and Steven Levitt, the economists who authored the bestselling book “Freakonomics,” coined the term as a way to lock yourself into a course of action that you might not necessarily choose, but that produces a desired result.

In short, commitment devices can help you accomplish your goals by helping you stick to your plans. We can use these devices to make it easier to achieve our goals, whether it’s time management, getting in shape, or saving for a trip.

Consider the Recurring Transactions and Auto-Invest as commitment devices. By utilizing these tools to put money away for each of your goals, you’ll be better off than relying on your willpower alone.

Here are three things to keep in mind when automatically saving for your goals:

Tip 1: Start small

Ease the financial burden of investing tons of money all at once. Using Recurring Transactions will help you invest small amounts on a frequent basis, so your wallet won’t feel as much of an impact.

Tip 2: Go at your own pace

It’s not a competition. Everyone’s financial situation is different. Start small and work up from there to find the right amount to fit your budget.

Tip 3: Get comfortable

It’s important to leave room in your budget for expenses and other essentials. You can adjust or pause any of these tools at any time.

Commit to yourself: go automatic!

By automatically saving and investing on a regular basis, you’re reinforcing good money habits.

Consider Recurring Transactions as your commitment device—a commitment to saving for your future goals.

Turn it on, and you can harness the power of automation.