Unpopular Opinion: Why Automating Your Savings is Overrated

It’s touted by personal finance experts as the holy grail of money hacking: automation. It sounds so awesome, like a Tim Ferriss-style optimization hack that solves so many of those persistent overspending problems. And I have to say that this must be true for a ton of people, because it’s such a commonplace money practice.

But total automation doesn’t work for me. Let me paint you a not-so-pretty picture:

I, a newly-hired first-year teacher, make my first budget and set up my automated deposits for my savings accounts. I’ve already received paychecks, so I know what my income will be. Everything’s planned for and ready to go. Money: hacked.

Except it didn’t work that way the first month. Or the second. Or, effectively, ever. 

I’m always saying that a budget is a living and breathing thing, and it’s because I learned that lesson the hard way in the beginning of my journey. Unexpected expenses came up during the month, I had to change my budget for irregular expenses before the month began, I would go slightly over budget in a category, or my savings goals would change entirely for one reason or another. Life would happen. This led to me inevitably cancelling one or more automatic deposits each month, only to save a smaller amount, and of course, feeling like a failure.

This is absolutely NUTS, because I was still saving toward my goals (and making good progress, at that). But having to always adjust this thing that was supposed to be “automatic” was not truly optimal in practice. Not at all.

In reality, it added more steps and anxiety, and messed with my momentum. And the kicker is: I’m saving just as effectively without the automation. It was more than unnecessary– it was actually demotivating. 

After months of trying to do things the “right” way, I actually started to do things the best way for me. Now, I still save each month, but the amounts vary depending on what expenses I have that month. For example, while my March budget was typical, my February budget included the unexpected cost of paying for coaching courses. Similarly, my January budget included a line for Amazon Prime, which I pay for yearly. Both of these costs that are important to me resulted in the necessity to change my savings amounts, and that was just fine.

By putting the money away myself (and having it be the first thing I do with my paycheck), I can change the amount month-to-month and still incentivise myself to stay in budget, without punishing myself for having atypical expenses. Plus, manually putting money away in my savings is a habit for me– in that way, it feels almost automatic– I just have more power in making necessary changes. 

I think there is a place for automation. Namely, I’m planning on investing all my raises directly from my paycheck in favor of hiding them from myself as I build my future. This is a “hack” that I think will actually work for me. But for all– or even some of– my savings accounts, automating deposits was a piece of advice I’m happy I left behind. 

If you’re ready to start saving, but aren’t sure how much you can put aside, make sure to grab my budget below. Whether you’re a pen & paper person or a spreadsheet nerd like me, I’ve got you covered. And, of course, it’s free!

See you next week!

Rachel

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