How to automate your savings
South Africans have a bad savings reputation and you can avoid contributing to our bad reputation by automating your savings.
Automating your savings can ensure that you do not forget to save or stretch your income so far that there is nothing left to save.
“When finances are tight and consumers are stretching their salaries to make ends meet, achieving monthly savings goals can seem unfeasible. However, if the past few years have taught us anything, it was the importance of having funds tucked away for those metaphorical rainy days,” Thopi Mhloli, solution owner for savings and investments at Standard Bank Group, says.
Mhloli says that with the advent of technology, there are now numerous ways to automate your savings, which makes it easier and more convenient to build a savings pot for financial emergencies and secure a stable income during retirement.
“It is important to remember that small amounts of money, saved consistently over time, will build up over time. And one of the best ways of ensuring consistent savings success is by using automation techniques,” Mhloli says.
In times of economic uncertainty, every cent counts and rather than aiming to save a lump sum by this time next year, you can make life easier by breaking down your financial goals into manageable amounts.
Saving small amounts helps
“While R20 000 in savings is daunting, R300 a week might just be doable. Over time, weekly savings funds could add up to something significant. And once you have a goal in mind, make smart choices about how to save and invest those funds to ensure you do not feel like you are skimping. It starts with easy automation tools that take the stress out of saving.”
Automated transfers from your checking account to your savings account can make the process of saving effortless. By setting up transfers on payday, you can ensure you save a portion of your income before you have a chance to spend it. Just make sure those debit orders can go off without a glitch, Mhloli says.
“Depending on your financial goals, you can schedule automated transfers weekly, bi-weekly, or monthly. It’s a straightforward way to save money regularly and prioritise savings in your financial plan.”
It is also important to remember the power of saving small amounts randomly, as a micro-savings approach can help you accumulate funds without even noticing.
“Mobile savings apps have revolutionised the way people save money. These apps often come with various features designed to make saving more accessible and user-friendly. They provide functionalities like goal setting, automatic transfers and even investment opportunities.
“They are designed to automate savings by analysing your spending habits and transferring money to your savings account accordingly. It is like having a financial assistant in your pocket. Apps like Liberty Stash offer unique approaches to saving, catering for different preferences and goals.”
Apps to automate your savings
Some apps even use algorithms to analyse your spending habits and determine how much you can afford to save without affecting your day-to-day expenses.
Investing apps with automated features can also help, Mhloli says. “For those looking to grow their wealth over time, investing apps with automated features can be a game-changer. The Standard Bank Mobile App, for example, helps you to identify appropriate investment vehicles for your risk tolerance and goals. Users can then set up automated transfers to their investment vehicles of choice.”
Standard Bank’s PureSave savings account, an entry level savings account that pays competitive rates, is an ideal vehicle to start your savings journey. With the ability to set up automatic transfers on a weekly or monthly basis to this account, you can ensure consistent savings, Mhloli says.
“This year’s World Savings Day served as an excellent reminder to kickstart a journey towards financial stability, especially in the face of rising interest rates and an increasing cost of living. As the economic environment remains uncertain, more South Africans are trying to put money away to secure their future and create a financial buffer.”
By embracing technology and these automation strategies, you can secure your individual legacy, provide for loved ones and even contribute towards a better savings rate for the country. Improved financial habits for one could lead to better economic stability for all, Mhloli says.