If you start saving 2 percent of your income but your situation changes, have you increased your savings rate? Can you get to 10 percent two years after starting your system? If you have been saving 10 percent and don’t feel any stress, is it safe to move to a 20 percent rate of savings? Once your system is a natural piece of your process, so much so that it is invisible to you, you could be giving up some control or awareness of your financial situation.
Personal finance is about making conscious choices with your money. That includes not using money without considering the circumstances. The present scenario changes over time, and a system does not relieve you of the need to see every pay check as a money-saving opportunity.
Automatic saving leads to success. A study from 2009 (Gordon, Romich, & Waithaka) determined that customers who created systems in the form of automatic savings transfers had more success accumulating savings. The accumulation savings is an intermediate goal, meaning it’s part of a path towards something else. With more savings, you can avoid expensive debt, and you can reach financial independence sooner. This gives you the ability to have more control over your life, to spend your time doing what makes you happy without having to be concerned about negative financial consequences for every decision you make.
Systems like automatic savings will help get you there.
How do you automate your savings?
Luke Landes, also known as Flexo, is the founder of Consumerism Commentary. He has been blogging and writing for the internet since 1995 and has been building online communities since 1991.
- 15 jobs that are safe from the robot takeover
- Down payment for love: How to think about the...
- 'Deseret News National Edition': Common Core,...
- 10 celebrity couples who have made marriage work
- Freelancers and millennials help usher in the...
- 10 jobs you can get right now
- 3 ways insurers can still avoid covering the...
- 6 financial moves to prevent sleepless nights
- 10 things to know about corporate... 32
- 3 ways insurers can still avoid... 13
- It's about time the government... 12
- Freelancers and millennials help usher... 10
- Cantwell targets small business loan... 4
- Applications for US unemployment aid... 4
- 'Deseret News National Edition': Common... 3
- Down payment for love: How to think... 2