Automatic savings is a method of saving money where a predetermined amount of money is automatically transferred from an individual’s checking account to a savings account or investment account on a regular basis, such as monthly or weekly. This can be set up through a bank or financial institution’s online banking system or mobile app.
Automatic savings helps to make saving a consistent and effortless habit, as the individual does not have to remember to manually transfer money into their savings account each time. By setting up automatic savings, the individual can gradually accumulate savings over time, which can be used towards financial goals such as an emergency fund, a down payment on a house, or retirement savings.
There are several advantages to automatic savings. First, it helps to make saving a priority by treating it as a fixed expense, similar to rent or a car payment. Second, it can help to remove the temptation to spend money that might otherwise have been used for savings. Third, automatic savings can help individuals to build their savings without having to think about it, which can make it easier to achieve their financial goals.
Overall, automatic savings is a simple and effective way for individuals to save money consistently over time, which can help to achieve financial security and reach their long-term financial goals.« Back to Glossary Index