The Power of Automatic Savings
Most of us know the importance of saving money yet there are some people who find it hard to jump-start their saving habit. Having an automatic savings program may help you get past that hurdle and start the habit of saving with minimum effort.
The concept of an automatic savings plan is quite simple. It is where you set a fixed amount of funds to be deposited at specified intervals into your account. How often the deposit occurs would depend on your personal preference. For instance, if you are paid on a bi-monthly basis (every 15th and 30th of every month), you could schedule an automatic deposit from your payroll account to your savings account every 20th of the same month and every 5th of the following month so it will give your paycheck enough time to clear.
One of the things I use for automating my savings is BPI Save-up. It is a virtual account with no ATM and can only be accessed online. I put my emergency funds there for me to avoid impulse spending. What I do is I set an amount for transfer and I set schedule of transfer to happen every twice a month (or every after suweldo time).
On the investment side, I use the BDO UITF Easy Investment Plan wherein I set an automatic amount to invest in my UITF (Equity). The auto-transfer is scheduled twice a month as well.
There are a few advantages of automating your savings. First is that it is hassle-free — just set it and forget it. Also, you don’t have excuses for not saving because it is already automated. Another benefit is you can build your emergency fund or save up without feeling the pain of saving up.
Overall, I will recommend this saving style to those people who want to save but having a hard time to start or those who lack time or simply want to work smarter on their finances.
Do you also practice automatic savings or do you know other banks that offer this option? Share it with us in the comment section below.