Some of the most popular resolutions include getting in shape, eating better, getting 8 hours of sleep a night and spending more time with loved ones. But there’s another one that I think is critical and has very good potential to stick: making automatic saving a regular habit.
Here are 4 good reasons why:
1. You don’t have to think about it
Saving is easiest when it’s automatic. It’s one less thing to worry about, and you don’t even have to lift a finger. Regardless of the amount you want to save, it’s always easier when the money is taken directly out of your personal chequing account and, even better, on payday. That’s what they mean when they say to pay yourself first!
By automatically transferring money to a savings account, you’re “protecting” it and you’re also protecting yourself from the temptation of small purchases, which can add up over time and impair your ability to save.
2. You get in the habit
Together, routine and the snowball effect have a powerful impact, turning a resolution into a natural instinct. We all know that the big challenges with any resolution are consistency and persistence!
Many people hate routine. But when it comes to your finances, routine is your best friend. Consistency is what will help your savings habit stick. It’s the consistency of saving that, transfer after transfer, will get you closer to your goal. And as soon as you’ve met your initial goal, there’s only one thing you’ll want to do: start again with a new goal - This link will open in a new window..
3. You get further faster by increasing how much you transfer
As with any resolution, once the habit’s been established, why not challenge yourself and aim a bit higher? By increasing the transfer amount a little, you’ll reach your goal faster.
If you reach your target amount faster than expected, you might achieve your goal more quickly or you might have the chance to expand the scope or add to the list. To get an idea of what the savings you put aside will be worth, use the calculator - This link will open in a new window..
4. You achieve your goals
The icing on the cake! You’ve seen your savings gradually grow, thanks to your regular transfers. This first test was successful: you reached the finish line, and your goal became a reality. Now you can enjoy the tangible results of what your resolution to save gave you.
This resolution will probably be easier to keep than many others, and maybe it will also inspire you to make new financial resolutions.
* Financial Planner and Mutual Funds Representative for Desjardins Financial Services Firm Inc.